India has become one of the world’s most attractive business destinations, offering a vast market, skilled workforce, and expanding investment opportunities. Many global companies choose to enter India through a Branch Office, as it allows them to undertake commercial activities while maintaining full foreign ownership.
This guide explains the complete process for setting up a branch office in India, along with documentation, eligibility, legal requirements, and timelines.

What Is a Branch Office in India?

A Branch Office is a foreign company’s extension in India that carries out the same business activities as its parent company. It is not a separate legal entity but operates under the approval of the Reserve Bank of India (RBI) and must be registered with the Registrar of Companies (ROC).

A Branch Office is ideal for:

Companies wanting to expand operations in India
Firms looking to represent their products and services
Businesses that need to execute contracts, provide technical support, or promote parent company activities

Why Foreign Companies Choose a Branch Office in India

100% foreign ownership permitted
Ability to perform profit-generating activities (unlike Liaison Office)
Freedom to invoice Indian customers directly
Low setup time and clear regulatory structure
Strong base to explore the Indian market before establishing a subsidiary

Who Can Set Up a Branch Office in India?

A foreign company interested in starting a company in India as a foreigner through a Branch Office must meet the following conditions:

The parent company must have a profit-making track record of at least 5 years.
It must have a net worth of USD 100,000 or more (or equivalent).
The proposed activities must fall within RBI-permitted categories.

Companies from FATF non-compliant countries or restricted sectors require additional scrutiny.

Activities Permitted for a Branch Office in India

Branch Offices can carry out:

Import/export of goods
Professional consultancy services
Research activities in the parent company’s domain
Providing technical support or services
Representing parent company in India
Acting as an authorized buying/selling agent
IT and software-related services
Execution of projects or contracts

Activities such as retail trading, manufacturing, and agriculture are not allowed.

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Step-by-Step Procedure for Registration of a Foreign Company in India (Branch Office)

Below is the complete procedure for registration of a foreign company in India through a Branch Office.

1. RBI Approval

Foreign companies must apply to the Reserve Bank of India (RBI) through the AD Category-I bank. The application includes the company profile, financial statements, and details of proposed activities.

2. Documentation and Verification

Documents required include:

Certificate of Incorporation
Memorandum & Articles of Association
Board Resolution for branch setup
Audited financial statements of the last 5 years
KYC of authorized representatives
Details of parent company’s business operations

All documents must be notarized and apostilled/consularized.

3. Registration with the ROC

After RBI approval, the Branch Office must be registered with the Registrar of Companies under the Companies Act, 2013.
This step creates its legal presence in India for compliance and taxation.

4. PAN, TAN, and Bank Account

The Branch Office must obtain:

PAN (Permanent Account Number)
TAN (TDS Account Number)
Bank account under the BO name

5. GST Registration (If Applicable)

If the Branch Office will supply goods or services, GST registration becomes mandatory.

6. Operational Setup

After compliance, the office can begin invoicing, hiring employees, entering contracts, and carrying out approved business operations.

Timeline and Cost for Branch Office Registration in India

RBI Approval: 3–4 weeks
ROC Registration: 1–2 weeks
Overall Setup Time: Approximately 30–45 days

Costs may vary depending on documentation, attestation, professional fees, and government charges.

Compliance Requirements After Setting Up a Branch Office

A Branch Office must follow these ongoing compliances:

Annual filing with ROC
Filing of income tax return
Statutory audit of accounts
Filing of Activity Certificates with the RBI
GST returns (if registered)
TDS compliances
FEMA regulations for foreign remittances

Branch Office vs Subsidiary Company: Which Is Better?

Criteria	Branch Office	Subsidiary Company
Ownership	100% foreign ownership allowed	100% foreign ownership allowed
Legal Status	Direct control by the parent	Separate legal entity
Taxation	Higher tax rate	Standard corporate tax
Control	Contract execution, technical support, and trading	Independent management possible
Best For	Contract execution, technical support, trading	Long-term investment, operations, scaling

A Branch Office is ideal for companies needing a quick entry into India without forming a separate company.

Why Choose Groomtax for Branch Office Registration in India?

Groomtax specializes in foreign company registration in India, offering complete assistance from documentation to compliance. Our experts handle:

RBI approval
ROC registration
Documentation & attestation
PAN/TAN/GST
Legal compliance and advisory
Full setup support
Financial and tax planning

With strong experience in regulatory processes, we provide a smooth, end-to-end solution for global companies entering India.

Conclusion

Setting up a Branch Office in India is one of the most efficient ways for foreign companies to enter the Indian market. Understanding the legal requirements, documents, and compliance is essential to avoid delays and ensure smooth operations.
With expert guidance, the entire process can be completed within a few weeks, enabling you to unlock India’s vast business potential.

Expanding a business into a new country is a big step. For foreign companies planning to enter India, there are several options to set up a presence: Branch Office, Liaison Office, or Foreign Subsidiary. Each structure has its own purpose, benefits, and limitations. Choosing the right one depends on your long-term business goals, compliance needs, and investment plans.

In this blog, we will explain these three options in simple words so you can decide which one is best for your company.

1. What is a Branch Office?

A Branch Office is an extension of a foreign company in India. It is not a separate legal entity, which means it works as part of the parent company. The branch office can earn income, undertake commercial activities, and sign contracts in India, but it must follow the guidelines set by the Reserve Bank of India (RBI).

Key Features of a Branch Office:

Can conduct trading, consulting, research, and professional services.
Can invoice clients and generate revenue in India.
Cannot engage in retail trading or manufacturing directly.
Must obtain approval from RBI and register with the Ministry of Corporate Affairs (MCA).
Liabilities are linked to the parent company.

When to Choose a Branch Office:

A Branch Office is suitable for companies that want to:

Expand operations in India without creating a separate legal entity.
Explore the Indian market by providing services and generating income.
Maintain control directly under the parent company.

2. What is a Liaison Office?

A Liaison Office is a representative office of a foreign company. Unlike a branch office, it cannot carry out commercial activities. Its main role is to act as a communication channel between the parent company abroad and stakeholders in India.

Key Features of a Liaison Office:

Cannot generate income or carry out business operations.
Can only promote the parent company’s products, conduct market research, and build networks.
Expenses must be funded entirely by the parent company.
Requires RBI approval for setup.
Functions as a cost center, not a profit center.

3. When to Choose a Liaison Office:

A Liaison Office is suitable for companies that want to:

Test the Indian market before making bigger investments.
Build relationships with potential clients, partners, or government authorities.
Gather market intelligence and promote the parent company’s products or services.

What is a Foreign Subsidiary?

A Foreign Subsidiary is a company incorporated in India but owned fully or partly by a foreign company. It is a separate legal entity governed under the Companies Act, 2013.

Key Features:

Can carry out all legal business activities as per Indian law.
Can be 100% owned by a foreign company (except in restricted sectors).
Liabilities are limited to the subsidiary itself, not the parent company.
Taxed as an Indian company.

Pros of a Foreign Subsidiary:

A wide range of business activities is allowed.
Strong credibility with Indian clients and government authorities.
Liability protection for the parent company.
Easier to raise capital locally.

Cons of a Foreign Subsidiary:

Higher cost and time needed for incorporation.
Requires strict compliance with Indian corporate laws.

4. Key Differences Between Branch Office, Liaison Office, and Foreign Subsidiary.

Factor	Branch Office	Liaison Office	Foreign Subsidiary
Legal Status	Companies testing the market or building networks	Representative office	Separate legal entity
Commercial Activities	Allowed (limited scope)	Not allowed	Fully allowed
Income Generation	Yes	No	Yes
Liability	Parent company holds liability	Parent company holds liability	Liability limited to shares
Approval Needed	RBI + MCA	RBI	MCA (Companies Act)
Best For	Companies wanting to provide services in India	Companies testing market or building networks	Companies planning long-term business in India

5. Choosing the Right Structure for Your Business Goals

Now that you know the basics, let’s match these options with common business goals:

If you want to test the market first, → Choose a Liaison Office.
If you want to provide services and earn revenue without creating a new company, → Choose a Branch Office.
If you want long-term growth and independence in India, → Choose a Foreign Subsidiary.

6. Compliance Considerations

No matter which option you choose, compliance is very important in India. Here are a few points to remember:

Branch Office & Liaison Office → Both require RBI approval before starting operations.
Foreign Subsidiary → Needs to be registered under the Companies Act and follow all corporate compliances.
Taxation → Subsidiaries are taxed as Indian companies, while Branch Offices are taxed as foreign companies (higher tax rate). Liaison Offices do not pay income tax as they cannot earn income.
Annual Filings → All three entities must file annual reports with RBI/MCA as per requirements.

Which Structure Should You Choose?

Choosing between a Branch Office, Liaison Office, or Foreign Subsidiary depends on your company’s strategy. If your goal is only to explore and research, a Liaison Office is enough. If you want to provide services and earn revenue but still remain linked directly to the parent company, a Branch Office works best. However, if your company wants to establish a strong and independent base in India, then a Subsidiary is the right choice.

Careful planning and professional guidance are important, as each structure involves regulatory approvals and compliance obligations.

Expanding into a new market is a big decision, and the right business structure will make your journey smooth. With the right support, you can match your business goals with the right setup.

For expert guidance on company formation and compliance in India, many businesses consult reliable professionals. One trusted name in this space is Groom Tax, known for helping companies choose the right path for expansion.

How Does Branch Office Registration Help Foreign Businesses Operate Legally in India?