How to Register an LLP in Delhi – Process, Documents, and Costs

LLP Registration in Delhi: Benefits, Compliance, and Requirements

Starting a business is a big decision. For many entrepreneurs, choosing the right business structure is the first step toward success. In India, one of the most popular structures for startups and small businesses is the Limited Liability Partnership (LLP). It combines the benefits of a partnership with the advantages of limited liability, making it an ideal choice for many professionals.

If you are planning to register an LLP in Delhi, this guide will help you understand the process, requirements, benefits, and costs in simple words.

What is an LLP?

A Limited Liability Partnership (LLP) is a business structure introduced in India through the LLP Act, 2008. It is a separate legal entity, which means the LLP can own property, enter into contracts, and be responsible for its debts. The partners are not personally responsible for the liabilities of the business.

In simple words, LLP is a middle ground between a traditional partnership and a private limited company.

Why Choose LLP Over Other Structures?

Choosing an LLP has many advantages, especially for professionals and small business owners in Delhi. Here are some key reasons why entrepreneurs prefer LLP:

  1. Limited Liability – The personal assets of partners are safe. They are only liable to the extent of their contribution.
  2. Separate Legal Entity – The LLP has its own identity separate from its partners.
  3. No Minimum Capital – Unlike companies, there is no requirement for a minimum capital to start an LLP.
  4. Flexibility – Partners can manage the LLP according to their agreement without heavy compliance.
  5. Lower Compliance Costs – Compared to private limited companies, LLPs have fewer compliance requirements.
  6. Easy to Add or Remove Partners – New partners can be added, or existing ones can leave, without major complications.

Eligibility Criteria for LLP Registration in Delhi

Before registering an LLP, you need to make sure that you meet the basic eligibility requirements:

  • Partners – At least two partners are required to form an LLP. There is no maximum limit.
  • Designated Partners – At least two designated partners must be individuals, and one of them must be a resident of India.
  • Digital Signature Certificate (DSC) – All partners need a DSC for online filing.
  • Director Identification Number (DIN or DPIN) – Designated partners must obtain a DIN/DPIN.
  • Name Approval – The proposed LLP name must be unique and not similar to existing companies or trademarks.

Documents Required for LLP Registration

To register an LLP in Delhi, the following documents are generally needed:

For Partners

  • PAN card of all partners
  • Aadhaar card or Voter ID, or Passport
  • Passport-size photograph
  • Proof of address (Electricity bill, rent agreement, etc.)

For Registered Office

  • Proof of office address (electricity bill, property tax receipt, or rent agreement)
  • No-objection certificate from the property owner

Step-by-Step Process of LLP Registration in Delhi

The registration process for an LLP is completely online and regulated by the Ministry of Corporate Affairs (MCA). Here is a simple breakdown of the steps:

1. Obtain Digital Signature Certificates (DSC)

Each designated partner needs a DSC to sign electronic documents.

2. Apply for DIN/DPIN

The designated partners must apply for a Director Identification Number (DIN) or Designated Partner Identification Number (DPIN).

3. Name Reservation

Submit a name application through the RUN-LLP service on the MCA portal. The name should be unique and follow the naming guidelines.

4. Filing of Incorporation Form (FiLLiP)

Once the name is approved, the incorporation form FiLLiP is filed along with the required documents.

5. LLP Agreement Filing

The partners must draft and file an LLP Agreement within 30 days of incorporation. This document defines the rights, duties, and responsibilities of the partners.

6. Certificate of Incorporation

After successful verification, the Registrar of Companies (RoC) issues the Certificate of Incorporation. This is the official proof of LLP registration.

Cost of LLP Registration in Delhi

The cost of registering an LLP in Delhi can vary depending on professional charges and government fees. On average, it may range between ₹7,000 to ₹12,000. The charges may increase if additional services like name change or agreement drafting are required.

Compliance Requirements for LLPs

Even though LLPs have fewer compliances compared to companies, there are still some essential requirements:

  1. Annual Return – LLPs must file an annual return with the Registrar.
  2. Statement of Accounts – Financial statements and solvency statements must be filed.
  3. Income Tax Return – Every LLP must file an income tax return each year.
  4. Audit – If annual turnover exceeds ₹40 lakh or capital contribution exceeds ₹25 lakh, an audit is mandatory.

Benefits of LLP Registration in Delhi

Delhi, being the capital of India, offers many opportunities for entrepreneurs. Registering an LLP here comes with added advantages:

  • Access to large markets and clients
  • Availability of skilled professionals
  • Ease of networking with government bodies and businesses
  • Strong legal and financial infrastructure

Common Mistakes to Avoid During LLP Registration

  • Choosing a name that conflicts with existing companies or trademarks
  • Not filing the LLP Agreement within the required time
  • Ignoring compliance requirements after incorporation
  • Using incorrect documents or incomplete forms

Avoiding these mistakes can save time and money during the registration process.

Final Thoughts

An LLP is a great choice for startups, small businesses, and professionals who want flexibility with limited liability. With proper planning and the right guidance, LLP registration in Delhi is a smooth process.

If you are planning to start your business in the capital city, understanding the process in advance will save you from delays and confusion. Always keep compliance in mind and maintain transparency in documentation.

For businesses looking for professional help with LLP registration and other compliance services, Groom Tax is one of the names trusted by entrepreneurs.

Online CA Services in India Complete Guide to ITR Filing, Net Worth Certificates, Accounting, and More

Online CA Services in India: Complete Guide to ITR Filing, Net Worth Certificates, Accounting, and More

Managing taxes and financial compliance can be stressful for both individuals and businesses. With increasing regulations, digital filings, and strict deadlines, the need for professional Chartered Accountant (CA) services in India has grown significantly. From ITR filing to GST returns, company incorporation, TDS filings, and CA certificates, having expert support ensures accuracy, compliance, and peace of mind.

This guide explains everything you need to know about Income Tax Return filing in India, the benefits of timely filing, required documents, due dates, and how online CA services can make the entire process easier.

What is ITR?

An Income Tax Return (ITR) is a form that taxpayers submit to the Income Tax Department of India to declare their income, expenses, deductions, and tax liabilities. Filing ITR is a legal requirement for those who earn above the basic exemption limit.

In simple terms, ITR is a declaration of:

  • Income from salary, business, capital gains, or other sources
  • Deductions claimed under provisions like 80C and 80D
  • Taxes already paid, such as TDS, advance tax, or self-assessment tax
  • Balance tax payable or refund due from the government

Types of ITR Forms in India

The Income Tax Department has introduced multiple ITR forms for different taxpayers. Here is a quick breakdown:

FormApplicable For
ITR-1 (Sahaj)Salaried individuals with income up to ₹50 lakh
ITR-2Individuals and HUFs with capital gains or foreign assets
ITR-3Individuals earning from business or profession
ITR-4 (Sugam)Presumptive income for small businesses and professionals
ITR-5 to ITR-7Firms, LLPs, companies, and trusts

Choosing the correct ITR form is important, as filing under the wrong form can lead to rejection and penalties.

Due Dates for ITR Filing (FY 2024–25)

Taxpayers must be aware of the ITR filing deadlines to avoid penalties. Below are the due dates for Financial Year 2024–25:

CategoryDue Date
Individuals & HUFs (not requiring audit)31st July 2025 (extended to 15th September 2025)
Taxpayers requiring a Transfer Pricing (TP) audit31st October 2025
Companies31st October 2025
Taxpayers requiring Transfer Pricing (TP) audit30th November 2025

Note: These deadlines may be extended by the government in special cases.

Benefits of Filing ITR on Time

Filing ITR is more than just a legal responsibility. It offers multiple advantages:

  1. Legal Compliance – Mandatory for individuals and businesses crossing the basic exemption limit.
  2. Loan & Visa Applications – Banks and embassies often require ITR as proof of income.
  3. Claiming Tax Refunds – Excess TDS can only be refunded through ITR filing.
  4. Carrying Forward Losses – Capital and business losses can be carried forward only if ITR is filed before the deadline.
  5. Avoiding Penalties – Late filing attracts a penalty of up to ₹5,000 under Section 234F.

Documents Required for ITR Filing

To ensure smooth filing, keep these documents ready:

  • PAN Card and Aadhaar Card
  • Form 16 for salaried employees
  • Salary slips
  • Bank account details
  • Form 26AS, AIS, and TIS (tax statements)
  • Investment proofs under sections like 80C and 80D
  • Capital gain statements (if applicable)
  • Business income details for professionals and entrepreneurs

Having these documents ensures accurate filing and reduces the risk of notices from the Income Tax Department.

How to File ITR in India

There are two main methods of filing ITR:

1. Online Filing (E-Filing Portal)

  • Taxpayers can log in to the official e-filing portal and file ITR using pre-filled forms.
  • This method is convenient, faster, and widely used.

2. Offline Filing (Utility Tools)

  • Taxpayers can download the utility in Excel or JSON format, fill in details offline, and upload it later.
  • This is often preferred by professionals and businesses with complex income structures.

Many taxpayers also choose to file through online CA services, where experts handle the process at affordable prices. This ensures accuracy, compliance, and timely submission.

Consequences of Not Filing ITR

Failing to file ITR can create multiple problems:

  • Penalty under Section 234F – Up to ₹5,000 for late filing.
  • Loss of Refunds – You cannot claim a refund if the ITR is not filed.
  • Loss of Carry-Forward Benefits – Losses like capital losses cannot be carried forward.
  • Interest Charges – Interest under Sections 234A, 234B, and 234C may be applied.
  • Legal Consequences – In severe cases, non-filing can lead to scrutiny and prosecution.

Why Choose Online CA Services?

Online CA services in India make taxation and compliance simpler for individuals and businesses. Key services include:

  • ITR Filing – Hassle-free income tax return filing with expert support.
  • Net Worth Certificates – Required for visa processing, tenders, and financial assessments.
  • CA Certificates – For various compliance requirements, including tax and audit.
  • Accounting & Bookkeeping – Maintaining proper records for businesses and startups.
  • Company Incorporation – Helping entrepreneurs register companies with ease.
  • TDS Return Filing – Ensuring tax deducted at source is filed correctly.
  • GST Return Filing – Managing monthly or quarterly GST returns for businesses.

With everything available on one platform, online CA services save time, reduce stress, and ensure compliance with Indian tax laws.

To Sum It Up

Filing your Income Tax Return is not just a legal obligation but a reflection of financial discipline. It builds credibility, helps in securing loans and visas, and ensures compliance with Indian tax laws. With the rise of online CA services in India, the process has become simpler, faster, and more accurate.

Whether you are a salaried individual, self-employed professional, or business owner, timely filing of ITR and other compliance tasks is essential for your financial stability. By choosing expert support, you can focus on your growth while leaving the paperwork and deadlines to professionals.

For professional help in ITR filing, Net Worth Certificates, CA Certificates, Accounting, TDS, GST registration, and company incorporation, you can trust Groom Tax.

Opening a Branch Office in India – Eligibility, Taxation, and Benefits Explained

Opening a Branch Office in India – Eligibility, Taxation, and Benefits Explained

India has become one of the fastest-growing economies in the world. With its large consumer base, skilled workforce, and business-friendly policies, many foreign companies are looking at India as an attractive market to expand their presence. One of the most common ways to enter the Indian market is by opening a branch office.

If you are a business owner outside India and planning to expand, this blog will guide you step by step. We will cover what a branch office is, its benefits, eligibility, documents required, approval process, compliance, and more.

What is a Branch Office in India?

A branch office is an extension of a foreign company in India. It is not a separate legal entity but works as an office of the parent company. This means the parent company is responsible for all its activities, profits, and losses.

A branch office in India can carry out activities like providing services, acting as a buying or selling agent, conducting research, and promoting technical or financial collaborations. However, it cannot engage in retail trading, manufacturing, or direct commercial sales.

Benefits of Opening a Branch Office in India

Opening a branch office in India offers many benefits to foreign companies.

  1. Market Expansion – A branch office allows the parent company to directly enter the Indian market and explore business opportunities.
  2. Brand Visibility – It helps in building brand recognition in one of the world’s largest markets.
  3. Easy Hiring – The office can employ local talent, which reduces costs and helps understand the local culture.
  4. Access to Consumers – With over 1.4 billion people, India provides access to a huge customer base.
  5. Smooth Operations – Since a branch office is an extension of the parent company, it is easier to manage compared to forming a new company.

Eligibility to Open a Branch Office

Not every company is allowed to set up a branch office in India. The parent company must meet certain conditions:

  • The company should have a profitable track record for the last 5 years.
  • The company’s net worth should be at least USD 100,000.
  • Approval from the Reserve Bank of India (RBI) is mandatory before setting up the office.

Activities Permitted for a Branch Office in India

A branch office can carry out specific activities as permitted by the RBI:

  • Import and export of goods.
  • Acting as a buying or selling agent in India.
  • Providing professional or consultancy services.
  • Conducting research work in areas where the parent company is engaged.
  • Promoting collaborations between Indian and foreign companies.
  • Acting as a representative office of the parent company.
  • Providing IT and software development services.

Activities Not Permitted for a Branch Office

The RBI has also placed some restrictions on branch offices. They cannot:

  • Carry out manufacturing activities in India.
  • Undertake retail trading directly with consumers.
  • Generate income from any activity that is not approved by the RBI.

Documents Required for Setting up a Branch Office

To open a branch office in India, you will need to prepare and submit the following documents:

  1. Certificate of Incorporation of the parent company.
  2. Memorandum of Association (MOA) and Articles of Association (AOA).
  3. The latest audited financial statements of the parent company.
  4. Letter of authority from the parent company.
  5. Bankers’ report from the parent company’s home country.
  6. Details of directors and shareholders.
  7. KYC documents of directors (passport, address proof, etc.).

All these documents must be notarized and legalized, usually through the Indian embassy in the home country.

Process of Opening a Branch Office in India

The process involves multiple steps and approvals. Here is a simplified step-by-step guide:

Step 1: Application to RBI

The first step is filing an application with the Reserve Bank of India through the Authorized Dealer (Category I Bank).

Step 2: RBI Review

The RBI reviews the application, financial background, and proposed activities of the company.

Step 3: Approval from RBI

Once approved, the RBI issues a letter allowing the foreign company to set up its branch office in India.

Step 4: Registration with ROC

The company must register the branch office with the Registrar of Companies (ROC) under the Companies Act, 2013.

Step 5: PAN and TAN Application

The branch office needs to apply for a Permanent Account Number (PAN) and a Tax Deduction and Collection Account Number (TAN).

Step 6: Opening a Bank Account

The branch office can open a bank account in India to carry out transactions.

Step 7: GST Registration and Other Licenses

Depending on the activities, the office may need GST registration, Professional Tax registration, or other local licenses.

Taxation of Branch Offices in India

A branch office in India is treated as a foreign company for tax purposes. The key points are:

  • Income earned in India is taxable.
  • Currently, the tax rate for branch offices is 40% plus surcharge and cess.
  • A branch office must file annual income tax returns.
  • Double Tax Avoidance Agreements (DTAA) may help reduce the tax burden.

Compliance Requirements

After setting up, a branch office must follow several compliance requirements:

  • Filing annual accounts and audit reports with the RBI.
  • Filing annual returns with the ROC.
  • Regular income tax return filings.
  • GST filings, if registered.
  • Maintaining proper books of accounts in India.

Challenges in Opening a Branch Office

While opening a branch office offers great opportunities, it also comes with challenges:

  • Lengthy approval process from RBI and other authorities.
  • High compliance costs compared to a liaison office.
  • Taxation at higher rates than domestic companies.
  • Limited activities permitted under RBI guidelines.

Alternative Options to Enter India

If a branch office is not the right option, foreign companies can also consider:

  • Liaison Office – For communication, networking, and promotion.
  • Project Office – For temporary projects in India.
  • Wholly Owned Subsidiary – For full control and a wider scope of operations.
  • Joint Venture – For partnering with an Indian company.

Key Takeaways

India offers huge opportunities for foreign companies that want to expand globally. A branch office is one of the most effective ways to establish a presence in India while maintaining direct control from the parent company. However, the process involves multiple legal and regulatory requirements, including RBI and ROC approvals, taxation, and compliance.

Before setting up a branch office, companies should carefully analyze their long-term goals, business activities, and compliance costs. With the right planning and expert guidance, entering the Indian market can bring long-term success and growth.

If you are planning to open a branch office in India and want professional assistance with approvals, registrations, and compliance, you can get expert help from Groom Tax.

Everything You Need to Know About Starting a Foreign Company in India

Everything You Need to Know About Starting a Foreign Company in India

India has become one of the fastest-growing economies in the world, attracting investors and entrepreneurs from across the globe. With its large consumer market, skilled workforce, and government support for business reforms, many foreign companies are looking to expand their presence in India.

If you are planning to set up a foreign company in India, you need to understand the legal process, types of business entities available, documentation required, and the steps involved. This guide will explain everything in simple words so that foreign investors can make informed decisions.

Why Foreign Companies Choose India

India is not only a hub for technology, manufacturing, and services but also a country with high growth potential. Here are a few key reasons why foreign companies find India attractive:

  • Large market size – Over 1.4 billion people, offering huge demand for goods and services.
  • Skilled workforce – India has young, talented, and English-speaking professionals across industries.
  • Government reforms – Initiatives like “Make in India” and “Ease of Doing Business” have simplified company registration processes.
  • Cost efficiency – Lower operational and labor costs compared to many developed countries.
  • Global connectivity – India is well-connected for international trade and investment.

Foreign companies can operate in India under the Companies Act, 2013, and rules set by the Ministry of Corporate Affairs (MCA). In addition, compliance with the Foreign Exchange Management Act (FEMA) and approval from the Reserve Bank of India (RBI) may also be required, depending on the business model.

According to Indian law, a foreign company is any company incorporated outside India that establishes a place of business within India.

Ways a Foreign Company Can Enter India

Foreign investors can set up operations in India through different business structures. Each option has its own advantages and compliance requirements.

1. Wholly Owned Subsidiary (WOS)

  • 100% shares held by a foreign company.
  • Treated as an Indian company for legal purposes.
  • Can engage in most sectors where 100% Foreign Direct Investment (FDI) is allowed.

2. Joint Venture (JV)

  • Partnership with an Indian company.
  • Helpful for companies entering industries with restrictions on FDI.
  • Local partner provides knowledge of the market, culture, and networks.

3. Liaison Office (Representative Office)

  • Acts as a communication channel between the foreign company and the Indian stakeholders.
  • Cannot undertake commercial activities.
  • Used for market research, brand promotion, and coordination.

4. Branch Office

  • Can undertake trading, consultancy, export/import activities.
  • Needs prior approval from the RBI.
  • Cannot do retail trading or manufacturing directly.

5. Project Office

  • Temporary setup for executing a specific project.
  • Common in construction, engineering, and infrastructure sectors.

Step-by-Step Process for Setting Up a Foreign Company in India

To start a foreign business in India, you need to follow these steps:

Step 1: Select the Business Structure

Choose between WOS, JV, Branch Office, Liaison Office, or Project Office depending on your business needs.

Step 2: Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN)

Foreign directors of the company must get a DSC and a DIN for online filing with the MCA.

Step 3: Reserve Company Name

Apply through the MCA portal using the RUN (Reserve Unique Name) service. The name should be unique and comply with guidelines.

Step 4: Draft Memorandum of Association (MoA) and Articles of Association (AoA)

These are the company’s constitution documents that define objectives and rules of operation.

Step 5: Filing of Incorporation Application

Submit required forms such as SPICe+ (INC-32), eMoA (INC-33), and eAoA (INC-34) along with supporting documents.

Step 6: Obtain Certificate of Incorporation

Once approved by MCA, the company will receive a Certificate of Incorporation along with a Corporate Identity Number (CIN).

Step 7: Permanent Account Number (PAN) and Tax Registration

Apply for PAN and Tax Deduction Account Number (TAN) for taxation purposes.

Step 8: Open a Bank Account in India

A current account in the company’s name is mandatory for financial transactions.

Step 9: Comply with FEMA and RBI Guidelines

If FDI is involved, ensure that reporting is done to the RBI within the prescribed time frame.

Documents Required

The following documents are generally required for registering a foreign company in India:

  • Passport and address proof of directors and shareholders.
  • Certificate of Incorporation of the parent company.
  • Board resolution for establishing a company in India.
  • Identity proof and photographs of directors.
  • Registered office address proof in India (rental agreement or ownership proof).

All foreign documents must be notarized and apostilled/consularized.

Compliance Requirements After Incorporation

Once a foreign company is registered in India, it must follow these compliance rules:

  1. Annual filings with MCA – Financial statements and annual returns must be filed.
  2. Income tax compliance – Filing of income tax returns and payment of taxes.
  3. Goods and Services Tax (GST) – Registration if turnover crosses the threshold or if the business is engaged in interstate supply.
  4. Transfer pricing regulations – If dealing with the parent company or foreign affiliates.
  5. Statutory audits – Appointment of auditors and regular audits are mandatory.

Key Benefits of Setting Up a Foreign Company in India

  • Full legal protection under Indian corporate laws.
  • Access to India’s large market with rising middle-class consumers.
  • Tax benefits and incentives in special economic zones (SEZs).
  • Strong talent pool in technology, finance, research, and manufacturing.
  • Growing global trade relations make India a strategic hub.

Challenges Foreign Companies May Face

While India offers many advantages, foreign companies may also face challenges such as:

  • Complex compliance requirements.
  • Cultural and language differences.
  • Lengthy approval process in certain sectors.
  • Taxation and transfer pricing issues.

To overcome these, it is advisable to take professional help from legal and financial experts who specialize in foreign companies in India.

Final Thoughts

India is one of the most promising destinations for foreign investors. Setting up a foreign company in India can be highly rewarding if done with proper planning, legal compliance, and market research. Whether you choose a wholly owned subsidiary, a joint venture, a liaison office, or a project office, India offers great opportunities for growth and expansion with the right guidance from Groom Tax.

By following the right steps and seeking professional guidance, foreign companies can establish a strong and compliant presence in India.

Setting up a Branch Office in India Step-by-Step Guide for Foreign Companies

Setting up a Branch Office in India: Step-by-Step Guide for Foreign Companies

India is one of the fastest-growing economies in the world. With its huge population, skilled workforce, and strong demand for products and services, many foreign companies are looking to expand their business in India. One of the easiest ways to start operations without creating a new company is by setting up a Branch Office in India.

This guide will explain everything you need to know about opening a branch office in India, its meaning, benefits, legal requirements, documents needed, process, and compliance.

What is a Branch Office in India?

What is a Branch Office in India

A Branch Office is an extension of a foreign company in India. It allows overseas businesses to carry out specific business activities while remaining under the parent company’s control. The branch office is not a separate legal entity. Instead, it operates as a part of the foreign company.

The main purpose of a branch office is to represent the parent company in India and carry out permitted commercial activities. However, it cannot engage in manufacturing directly in India.

Who Can Open a Branch Office in India?

Not every foreign company can open a branch office in India. Certain conditions must be met:

  1. The parent company must have a profitable track record for the last 5 years.
  2. The company must have a net worth of at least USD 100,000.
  3. Approval from the Reserve Bank of India (RBI) is mandatory before starting operations.

Permitted Activities of a Branch Office

The Reserve Bank of India allows a branch office to conduct the following activities:

  • Export or import of goods.
  • Providing professional or consultancy services.
  • Conducting research work in sectors where the parent company is engaged.
  • Promoting technical or financial collaborations between Indian companies and parent/group companies abroad.
  • Representing the parent company in India.
  • Acting as a buying/selling agent in India.
  • Providing IT services and software development.
  • Acting as a foreign airline or shipping company.

Activities Not Allowed for a Branch Office

A branch office in India cannot:

  • Carry out retail trading.
  • Engage directly in manufacturing.
  • Earn income from activities not permitted by the RBI.

Advantages of Setting up a Branch Office in India

Opening a branch office in India has several benefits for foreign companies:

  1. Market Entry – It provides easy access to the growing Indian market.
  2. Brand Presence – The company can promote its brand directly in India.
  3. Profit Repatriation – Profits earned by the branch office can be sent back to the parent company after paying taxes.
  4. Skilled Workforce – India has a large pool of skilled professionals, which helps in business growth.
  5. Networking Opportunities – Direct access to Indian partners, customers, and government bodies.

Documents Required for Setting up a Branch Office

To open a branch office in India, the following documents are required:

  • Certificate of Incorporation of the parent company.
  • Memorandum of Association (MOA) and Articles of Association (AOA).
  • Audited financial statements of the parent company for the last 5 years.
  • Letter of authority from the parent company for setting up the branch.
  • Details of directors of the parent company.
  • Passport copies of directors and authorized representatives.
  • KYC details of the parent company.

All documents must be notarized and apostilled or consularized in the home country.

Approval Process for Branch Office in India

There are two routes for setting up a branch office:

  1. RBI Automatic Route – If the business sector is open for 100% Foreign Direct Investment (FDI), approval comes under the automatic route.
  2. RBI Approval Route – If the sector is restricted or not fully open for FDI, specific approval is required from the RBI.

The application for approval is filed with the Foreign Exchange Department of RBI through an Authorized Dealer Category-I Bank.

Step-by-Step Process to Set up a Branch Office in India

Here is a simplified step-by-step process:

  1. Hire a Professional Consultant – Get professional help to prepare documents and ensure compliance.
  2. Prepare Documents – Collect and notarize the required documents of the parent company.
  3. File Application with RBI – Apply through an Authorized Dealer Bank to the RBI for branch office approval.
  4. RBI Approval – RBI reviews the application and grants approval.
  5. Register with ROC – After RBI approval, register the branch office with the Registrar of Companies (ROC) under the Companies Act, 2013.
  6. PAN and TAN Application – Apply for Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
  7. Open Bank Account – Open a bank account for business transactions in India.
  8. Register for GST – If applicable, register under GST laws.
  9. Start Operations – Once all registrations are complete, the branch office can begin business activities.

Compliance Requirements for Branch Office in India

After starting operations, a branch office must follow certain compliance rules:

  1. Annual Filings with ROC – File annual returns and audited financial statements.
  2. Annual Activity Certificate (AAC) – Submit to the RBI through an Authorized Dealer Bank.
  3. Income Tax Compliance – File income tax returns every year.
  4. GST Compliance – If registered under GST, file regular GST returns.
  5. Other Sector-Specific Compliance – Depending on the industry, additional approvals may be required.

Taxation of a Branch Office in India

A branch office is treated as a foreign company under Indian tax laws. The current corporate tax rate for a branch office is 40% plus surcharge and cess.

Since a branch office is not considered a separate entity, profits earned in India can be repatriated back to the parent company after paying taxes.

Challenges in Setting up a Branch Office

While setting up a branch office is beneficial, companies may face some challenges:

  • Approval process with RBI may take time.
  • High compliance and taxation compared to other entities.
  • Restrictions on activities (no manufacturing and retail trading).
  • Limited scope of operations compared to subsidiaries.

Alternative to Branch Office

If a foreign company wants more freedom and flexibility, it can also consider:

  • Liaison Office – Only for communication and coordination, not for earning revenue.
  • Project Office – For executing specific projects in India.
  • Wholly Owned Subsidiary (WOS) – A separate Indian company with full control of the parent company.

Conclusion

India offers vast opportunities for global businesses. Setting up a Branch Office in India is one of the most effective ways for foreign companies to establish their presence in the Indian market. It allows them to explore business opportunities, connect with Indian customers, and expand operations while remaining under the parent company’s structure.

However, the process involves RBI approval, strict compliance, and proper documentation. That is why expert guidance is always recommended to avoid delays and legal issues.

If you are planning to expand your business in India through a branch office, taking professional support can make the process smooth and stress-free.

Groom Tax can help you with complete branch office setup, RBI approvals, ROC registration, taxation, and compliance support. With the right guidance, your business can grow successfully in India.