Branch Office Registration
of a Foreign Company in India

A Branch Office is a place of business set up in India by a foreign company under Regulation 4 of FEMA 22(R)/2016. It is not a separate Indian company; it is an extension of the foreign parent company, which can earn revenue, sign contracts, and remit profits to the home country after prior approval from the Reserve Bank of India via an AD Category-I bank.

A Branch Office can carry on commercial activity and earn revenue. A Liaison Office can only represent the parent and gather market information (no revenue). A Project Office is set up for a specific contract in India and exists only for the duration of that project. All three are governed by FEMA 22(R)/2016, but eligibility, scope, and validity differ.

Three regulators are involved: the Reserve Bank of India (via the AD Category-I bank under FEMA 22(R)/2016) for approval and UIN, the Ministry of Corporate Affairs / Registrar of Companies for Form FC-1 registration under Section 380 of the Companies Act, 2013, and the Income Tax Department for PAN, TAN, and ITR-6 filings.

No. A subsidiary is a separately incorporated Indian company under the Companies Act, 2013. A Branch Office has no separate legal personality; its liabilities and obligations are those of the foreign parent. A subsidiary pays Indian corporate tax at standard rates; a Branch is taxed as a foreign company on its India-source income.

Yes — that’s the defining feature. A Branch Office can carry on the 8 permitted activities under Annex 1 to FEMA 22(R)/2016 and earn revenue from each. After paying Indian taxes, the Branch can remit net profits to the parent abroad through the AD bank with the certifications prescribed under Regulation 4(i).

Any foreign company that meets two thresholds: a profit-making track record in the immediately preceding 5 financial years in its home country, and a net worth of not less than USD 100,000 certified by a Certified Public Accountant. The proposed activity must fall within Annex 1 to FEMA 22(R)/2016.

Regulation 4 of FEMA 22(R)/2016 requires the foreign parent to have a net worth of ≥ USD 100,000 (or equivalent) supported by a CPA-certified net worth statement, and a profit-making record across the preceding 5 financial years in the home country.

Yes, but the application goes via the Government route under Regulation 5(b) of FEMA 22(R)/2016 — prior approval of the RBI in consultation with the Government of India. The March 2026 amendment to Press Note 3 eased 10% non-controlling FDI but did not change the Branch Office approval regime. Plan for 4–6 months from Form FNC filing.

Yes – and with relaxed conditions. Under Regulation 4(c) of FEMA 22(R)/2016, a foreign company can establish a Branch Office in an SEZ without RBI approval, for manufacturing or service activities, provided it is in a sector where 100% FDI is permitted, complies with Chapter XXII of the Companies Act, 2013, and functions on a stand-alone basis.

Annex 1 to FEMA 22(R)/2016 permits 8 activities: export/import of goods; professional or consultancy services; R&D work; promoting technical/financial collaborations; representing the parent and acting as buying/selling agent; IT and software services; technical support for parent products; and foreign airline/shipping company representation.

No. Retail trading of any kind is expressly prohibited for a Branch Office, and manufacturing/processing is permitted only when set up in a Special Economic Zone (SEZ). For mainstream retail or manufacturing in India, a foreign company should incorporate an Indian subsidiary instead.

No. Directors of the foreign parent do not need an Indian DIN unless they are also being appointed as directors of an Indian company. The Authorised Representative of the Branch needs a Class 3 DSC under the IT Act, 2000 for ROC e-filings, but not a DIN.

Form FNC is the prescribed application form (Annex C to the RBI Master Direction) for establishing a Branch, Liaison, or Project Office in India. It is filed by the foreign parent through an Authorised Dealer Category-I bank in India. For automatic-route cases, the AD bank decides; for Government-route cases, it is forwarded to the RBI Central Office Cell, New Delhi.

For applicants under the automatic route (sectors with 100% FDI, non-LBC jurisdictions), 6–8 weeks from Form FNC filing is typical. For Government-route cases — sensitive sectors or applicants from China, Hong Kong, Macau, Pakistan, and other land-border countries — 4–6 months is realistic.

Yes. Within 30 days of establishing the Branch Office in India, the foreign company must file Form FC-1 with the Registrar of Companies under Section 380 of the Companies Act, 2013 and Rule 3 of the Companies (Registration of Foreign Companies) Rules, 2014, along with the charter documents and Branch particulars.

Yes. The Branch Office must obtain a PAN from the Income Tax Department to file ITR-6 and a TAN for deducting TDS on payments. Both are applied for after the RBI approval and Form FC-1 filing. PAN is mandatory for opening a bank account in India.

Yes. Applicants from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, Macau, or Pakistan must register with the State Police authorities of the State where the Branch Office is located. A copy of the AD bank’s approval letter is also marked to the Ministry of Home Affairs, Internal Security Division-I.

Up to 4 Branch Offices can be opened on the strength of a single approval — one each in the East, West, North, and South zones. Additional offices beyond 4 require prior RBI approval through the AD bank, with justification for the need.

The RBI does not levy an explicit application fee for Form FNC. The ROC Form FC-1 filing fee under the Companies (Registration Offices and Fees) Rules, 2014, depends on the foreign company’s authorised capital — typically ₹6,000 plus stamp duty as per the State where the Branch is located. AD bank processing charges vary across banks.

Setindiabiz offers a Branch Office setup as a custom-quoted service because the scope varies by jurisdiction, sector, and AD bank choice. After a free 15-minute consultation, you receive a fixed-fee proposal covering FNC drafting, AD bank coordination, FC-1 filing, PAN/TAN, and the first year’s compliance retainer.

Stamp duty applies to the Power of Attorney to the Authorised Representative and to the Form FC-1 filing with the ROC. Rates vary by State under the respective State stamp Acts — typically ₹500–₹5,000 for the PoA. The MOA/AOA of the foreign parent do not attract Indian stamp duty.

Recurring costs include annual ROC filings (FC-3, FC-4), the Annual Activity Certificate by a Chartered Accountant, the ITR-6 filing, statutory audit, GST compliance if applicable, and the Setindiabiz annual retainer. Total annual professional cost typically runs ₹75,000 to ₹2,50,000, depending on transaction volume.

The AAC is a certificate by a Chartered Accountant confirming that the Branch Office has conducted only the activities approved by the RBI and within the scope of Annex 1 to FEMA 22(R)/2016. It is submitted by 30 September each year to the AD Category-I bank and the RBI Central Office Cell, New Delhi.

Branch Office income is taxed as a foreign company at 35% base rate plus surcharge (NIL/2%/5% by income band) plus 4% Health and Education Cess, following the reduction in the Finance (No. 2) Act, 2024 effective AY 2025-26. See the Income Tax Rate section above for the full rate matrix. DTAA benefits under Section 90 or Section 90A of the Income-tax Act, 19,61 may apply where India has a tax treaty with the parent’s home country.

Yes. Under Regulation 4(i) of FEMA 22(R)/2016, a Branch Office can remit profits net of applicable Indian taxes to the parent, subject to AD bank certification on (a) the manner of arriving at the remittable profit, (b) tax compliance, and (c) absence of revaluation gains. The remittance follows the procedure for outward remittances under FEMA.

Non-filing of the AAC is treated as a contravention of FEMA 22(R)/2016 and can lead to compounding under Section 13 of FEMA, 1999. Non-filing of Form FC-3 attracts penalties under Section 392 of the Companies Act, 2013 — a fine of ₹1 lakh and continuing default of ₹500/day, on the company and on every officer in default.

Yes. The Branch is closed by intimation through the AD Category-I bank to the RBI, with a closure application supported by an auditor’s certificate, a tax clearance, no-objection from creditors, and the closure of bank accounts. The ROC is intimated through Form FC-2. Total closure typically takes 60–120 days from initiation.