![]() PROCEDURES FOR SETTING UP A BRANCH OFFICE IN INDIA BY A FOREIGN COMPANY: Proprietary concerns set up abroad are not allowed to establish Branch Offices in India.Net Worth of not less than USD 100,000 or its equivalent as per the latest Audited Balance Sheet or Account Statement certified by a Certified Public Accountant or any Registered Accounts Practitioner by whatever name.Profit making track record during the immediately preceding five financial yearsin the home country.The following additional criteria are also considered by the Reserve Bank while sanctioning Branch Offices of foreign entities Pre-requisites for a foreign company to have branch office in India – Spreading its business to diverse locations and thus increasing the customerbase.All the expenses of the BRANCH office are met by the head office, if it does not have the revenue from Indian operations.It is SUITABLE FOR FOREIGN COMPANIES looking to setup a temporary office in India and not interested or not planning to have long term plans for the Indian operations.The GOVERNING BODY for the BRANCH office License is RESERVE BANK OF INDIA.The NAME of Indian BRANCH office shall be same as parent company.That the profit does not include any profit on revaluation of the assets of the branch. That the entire remittable profit has been earned by undertaking the permitted activities The manner of arriving at the remittable profit A Chartered Accountant’s certificate certifying – A Certified copy of the audited Balance Sheet and Profit and Loss account for the Relevant year ī. Procedure by which Branch Offices are permitted to remit profit outside India :īranch Offices are permitted to remit outside India profit of the branch net ofapplicable Indian taxes, on production of the following documents to the satisfaction of the Authorized Dealer through whom the remittance is affected:Ī. Profits earned by the Branch Offices are freely remittable from India, subject topayment of applicable taxes.A Branch Office is not allowed to carry out manufacturing or processing activities in India, directly or indirectly.Retail trading activities of any nature is not allowed for a Branch Office in India. ![]() Rendering technical support to the products supplied by parent/group companies.Ĭompanies incorporated outside India prohibited doing following activities through branch office in India.Rendering services in Information Technology and development of software in India.Representing the parent company in India and acting as buying/selling agent in India. ![]() Promoting technical or financial collaborations between Indian companies and parent or overseas group company.Carrying out research work, in which the parent company is engaged.Rendering professional or consultancy services.♦ PERMITTED ACTIVITY OF BRANCH OFFICE IN INDIA:Ĭompanies incorporated outside India and engaged in manufacturing or trading activitiesare allowed to set up Branch Offices in India and undertake the following activities in India This article gives you an overview of setting up a branch office in India. Only upon getting the branch license from RBI, the foreign company is allowed to commence the operations.īRANCH office is suitable for a foreign company to test and understand the Indian market with a very strict control by the Reserve Bank of India, as it does allow the companies to do business but just to do the activity which are mentioned in the application of Branch office, Any additional activity to be carried by the Branch office shall be illegal.īranch office can carry additional business activities only with the prior approval from the Reserve Bank of India(Procedure given below). But unlike the case of setting up a company, a branch office requires an approval from the Reserve Bank of India (RBI). ![]() The foreign company can have any revenue from the Indian Branch office only from the activity allowed by the Reserve Bank of India It has to meet all its expenses of Indian office through remittances from the Head office or through the revenue generated from the Indian operation permitted by the Reserve Bank of India.įoreign companies are allowed to set up a branch office in India. We have to follow provisions of two Act:īRANCH office is setup by a foreign company in India to carry out the BRANCH activity for its business. > Corporate Entity which could be wholly or partly owned by the foreign company (FIPB route).įor Establishment of Branch office of foreign Company in India. Legal forms in which a foreign company can set up its establishment in India are ![]()
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