Complete Guide to Branch Office Registration In India 

India’s booming economy continues to draw the attention of global enterprises. For foreign companies seeking a physical presence without the complexities of forming a separate legal subsidiary, establishing a Branch Office is often the most strategic entry point. However, understanding the regulatory maze governed by the Reserve Bank of India (RBI) and the Companies Act is crucial for a smooth setup.

This guide breaks down the entire journey of Branch Office Registration In India, detailing who is eligible, what activities are permitted, and how to maintain compliance after incorporation.

What is a Branch Office in India?

A Branch Office in India acts as an extension of its foreign parent company rather than a standalone entity. It enables the overseas entity to execute specific business operations, issue invoices, and generate revenue locally while functioning under the parent company’s global brand identity .

Unlike a Liaison Office, which is restricted to facilitative roles, a Branch Office is authorized to earn income. However, because it lacks separate legal identity, the parent corporation retains full liability for all debts, legal matters, and obligations incurred by the Indian branch .

Eligibility Criteria for Branch Office Registration In India

To qualify for Branch Office Registration In India, the foreign parent company must satisfy specific financial criteria established by the RBI. These benchmarks ensure that only financially robust organizations establish a footprint in the Indian market.

Financial Thresholds

According to the RBI’s Master Directions, an applicant must demonstrate:

1. Profitability: A consistent record of profitability for at least the five financial years immediately preceding the application .
2. Net Worth: A minimum net worth of USD 100,000 (or its equivalent). This is calculated as total paid-up capital plus free reserves, subtracting intangible assets, based on the latest audited financial statements .

Special Exceptions

If an applicant does not meet the above profitability or net worth criteria, they may still apply by providing a Letter of Comfort from their parent company, provided the parent entity fulfills the eligibility requirements .

Country-Specific Restrictions

Entities originating from countries that share a land border with India (including China, Pakistan, Bangladesh, and Nepal) face enhanced scrutiny. In such cases, applicants must secure prior clearance from the Ministry of Home Affairs alongside the standard RBI approval process .

What’s New? Proposed Regulatory Reforms

In a bid to improve the ease of doing business, the RBI released draft regulations in October 2025 proposing to remove the strict five-year profitability and net worth prerequisites. If enacted, these changes would significantly widen the door for foreign entities looking to enter India .

Permitted vs. Prohibited Activities

A Branch Office is restricted from engaging in manufacturing or direct retail trading. Its scope of work must align closely with the activities of its parent organization.

What Can a Branch Office Do?

The RBI allows Branch Offices to carry out the following functions :

1. Export and Import of goods.
2. Professional or Consultancy Services: Offering such services within India.
3. Research: Conducting research activities related to the parent company’s field.
4. Collaboration: Facilitating technical or financial partnerships between Indian firms and the overseas parent.
5. Representation: Serving as a buying or selling agent in India for the parent company.
6. IT Services: Delivering services in information technology and software development.
7. Technical Support: Offering after-sales or technical support for products supplied by the parent or group companies.
8. Airline/Shipping: Acting as a representative for foreign airlines or shipping companies.

What is Prohibited?

Branch Offices are explicitly barred from :

1. Undertaking retail trading activities of any kind.
2. Engaging in manufacturing or processing activities (except when located in a Special Economic Zone (SEZ) with 100% FDI in that sector).

Step-by-Step Process for Branch Office Registration In India

The registration process unfolds in two key phases: securing RBI authorization and subsequently registering with the Registrar of Companies (ROC). The entire timeline generally spans 4 to 6 weeks .

Step 1: Application to RBI via Form FNC

The procedure begins with the submission of Form FNC (Application for Establishment of Branch/Liaison Office in India). This form is not filed directly with the RBI but is routed through a designated Authorized Dealer (AD) Category-I bank in India .

The AD bank reviews the application before forwarding it to the RBI. Upon approval, the RBI issues a Unique Identification Number (UIN) for the Branch Office .

Step 2: Filing with the Registrar of Companies (ROC)

After obtaining the RBI’s green light, the foreign enterprise is required to register its Indian place of business with the ROC under the Companies Act, 2013. This step must be completed within 30 days of receiving RBI approval

The applicant must submit Form FC-1 to the Ministry of Corporate Affairs (MCA). Once the MCA verifies the details, the ROC issues a Certificate of Establishment of a Place of Business in India , formally recognizing the branch’s existence.

Step 3: Obtain Tax Registrations

With the Certificate of Establishment secured, the Branch Office must promptly register with the Income Tax Department to obtain :

1. Permanent Account Number (PAN): Essential for filing annual income tax returns.
2. Tax Deduction Account Number (TAN): Necessary for deducting tax at source on employee salaries and payments to contractors.

Step 4: Open a Bank Account

Following tax registrations, the Branch Office is eligible to open a non-interest-bearing current account with an Indian bank to manage its daily financial transactions and operational expenses .

Step 5: Other Registrations

Depending on the specific activities of the branch, additional registrations may be required :

1. Goods and Services Tax (GST): Compulsory if the branch provides services or sells goods.
2. Import Export Code (IEC): Required for businesses involved in cross-border trade.
3. Shops and Establishment Act Registration: Mandated by the local state municipality where the office is situated.

Documents Required for Registration

To facilitate a seamless application experience, the following documentation must be compiled. Please note that foreign-issued documents generally require apostillation (or notarization by the Indian Embassy) along with certified English translations .

1. Certificate of Incorporation of the overseas parent entity.
2. Memorandum and Articles of Association (or the company’s equivalent charter documents).
3. Audited Financial Statements (Balance Sheets) for the preceding five years.
4. Board Resolution formally approving the establishment of the Indian Branch Office and designating an authorized representative.
5. Power of Attorney granted to the local representative in India.
6. Banker’s Report issued by the applicant’s financial institution in their home country.
7. KYC Documents (such as Passport copies) of all directors and the appointed local representative.
8. Proof of Registered Address in India (e.g., a rental agreement or property deed).

Post-Registration Compliance for Branch Offices

Obtaining registration is only the first milestone. Sustaining a Branch Office in India demands rigorous adherence to annual statutory obligations to avoid financial penalties or regulatory action.

Annual Activity Certificate (AAC)

Among the most vital compliance tasks is the submission of the Annual Activity Certificate. This document, certified by a practicing Chartered Accountant, must be filed by April 30th each year with both the AD Bank and the Director General of Income Tax (International Taxation), New Delhi . It serves as a declaration that the Branch Office has operated strictly within its permitted scope.

Other Annual Filings

1. ROC Filings: The Branch Office is obligated to submit its annual financial statements (via Form FC-3) and annual return (via Form FC-4) to the ROC .
2. Income Tax Return: An annual income tax return must be filed, as all profits generated in India are subject to local taxation.
3. GST Returns: If registered under GST, the branch must file monthly, quarterly, and annual returns as applicable .

Branch Office vs. Other Forms of Presence

Choosing the right entry strategy is vital. Here is how a Branch Office compares to other options :

1. Liaison Office (LO): Restricted to representative functions only. It cannot generate revenue in India. Eligibility requires a 3-year profitability record and a net worth of USD 50,000.
2. Project Office (PO): Established to execute specific time-bound projects in India. Automatic approval is granted if the project is funded by multilateral agencies or specific financial institutions.
3. Wholly Owned Subsidiary (WOS): A distinct Indian legal entity (typically a Private Limited Company) offering limited liability protection. It can engage in any activity (including manufacturing) but is subject to full-scale corporate compliance.

Conclusion

Opting for Branch Office Registration In India provides foreign companies with a powerful platform to gauge the market, build brand visibility, and generate income without the intricacies of creating a fully independent subsidiary. While the process demands careful attention to RBI and ROC regulations, it offers a direct pathway to one of the world’s most dynamic consumer economies.

Given the constantly evolving regulatory landscape and the recent draft reforms aimed at simplification, partnering with experienced legal and financial advisors in India is highly advisable to navigate the procedures efficiently and ensure sustained operational success.