Branch Office registration in India

Branch Office Registration
in India

Direct Operating Presence Without a Separate Indian Entity

Trade, Services, Consulting and Technical Support — Under the Parent\'s Name

A Branch Office is an extension of a foreign parent operating in India under the parent\'s legal personality. Unlike a Liaison Office, it can earn revenue and undertake a specific list of commercial activities permitted by RBI. Unlike a Wholly Owned Subsidiary, it is not a separate Indian legal entity — the parent is directly liable for its operations and is taxed in India at the foreign-company rate of 40 percent on Indian-source profits. Branch Offices are most common for export-import operations, technical and professional services, software services to non-Indian customers, and as the India arm of a foreign airline or shipping company.

If you have already decided on a Branch Office, this page lays out the eligibility, the RBI approval route, permitted activities, taxation, and ongoing compliance. If you are still comparing it with a Wholly Owned Subsidiary, read our pillar guide on Foreign Company Registration in India first — the structuring decision usually has a 3-5 year tax and flexibility impact that should be made deliberately.

Permitted Activities
  • Export and import of goods.
  • Rendering professional or consultancy services.
  • Carrying out research in areas the parent is engaged in.
  • Promoting technical or financial collaborations between Indian companies and the parent.
  • Representing the parent in India as a buying or selling agent.
  • Rendering IT services and software development.
  • Technical support for products supplied by the parent.
  • Acting as a foreign airline or shipping company.
Prohibited Activities
  • Retail trading activities of any nature.
  • Manufacturing or processing activities (these require a WOS or specific SEZ approval).
  • Real estate business (other than developing townships, construction, infra projects under separate FDI policy).
  • Receiving or making payments in cash beyond limits prescribed by tax law.
Eligibility — Who Can Open a Branch Office
  • Profit-making track record for the immediately preceding five financial years in the home country (compare: Liaison Office requires only three).
  • Net worth of not less than USD 100,000 (Liaison Office is USD 50,000), certified by the parent\'s statutory auditor.
  • Foreign parent that does not meet the criteria can apply with a Letter of Comfort from a qualifying group entity.
  • Activity must be on the permitted list. Restricted sectors (defence, telecom, private security, broadcasting) and applications from entities of certain neighbouring countries need prior RBI approval after Government consultation.
Taxation of a Branch Office
Income Tax
  • 40% base rate + surcharge + 4% Health & Education Cess on profits attributable to India operations.
  • Effective tax rate works out to approximately 42.43% (10% surcharge bracket) or 43.68% (where applicable).
  • Tax audit under Section 44AB applies above the prescribed turnover threshold.
  • Branch profits assessed by the Director General of Income Tax (International Taxation).
GST & Indirect Tax
  • GST registration mandatory if turnover crosses the threshold or if any inter-state supply is made.
  • Branch-to-parent service supplies attract GST (treated as a deemed supply between distinct persons under Schedule I).
  • Export of services qualifies for zero-rated treatment with refund of input GST.
Approval and Setup Process
  1. Structuring decision: we confirm Branch is the right vehicle vs WOS, given activity scope, expected revenue and tax position over five years.
  2. Form FNC submission to the AD Category-I Bank with parent eligibility documents.
  3. RBI processing — 4–8 weeks under general permission route; longer for prior-approval cases.
  4. Unique Identification Number (UIN) issued by RBI with approval letter.
  5. ROC registration under Section 380 of the Companies Act 2013 within 30 days of establishment in India.
  6. PAN, TAN, GST, IEC as applicable, opening of AD bank account.
Annual Compliance for a Branch Office
  • Annual Activity Certificate (AAC) audited by a chartered accountant, submitted to AD Bank and DGIT(IT) by 30 September.
  • Audited financial statements in the format prescribed under the Companies Act, filed with ROC (Form FC-3) within six months of close of financial year of the parent.
  • Income tax return with tax audit (Form 3CD); transfer pricing audit (Form 3CEB) if any transaction with parent or associated enterprise.
  • GST monthly / quarterly returns and annual GSTR-9 / 9C.
  • FLA Annual Return to RBI by 15 July (applicable to Branch Offices receiving inward remittance / having foreign liability).
Branch Office vs Wholly Owned Subsidiary — Quick Comparison
Branch Office
  • Not a separate legal entity.
  • Taxed at ~42% effective rate.
  • Limited to permitted activities list.
  • Parent directly liable for India operations.
  • Cannot raise local debt easily.
  • RBI approval required for setup.
Wholly Owned Subsidiary
  • Separate Indian legal entity.
  • Taxed at 22% (or 15% for new manufacturing).
  • Can do any FDI-permitted activity.
  • Liability limited to share capital.
  • Can raise local debt, hire freely, list eventually.
  • Automatic-route incorporation for most sectors.

Read more on Wholly Owned Subsidiary Registration, or talk to us for a structuring review before you commit.