Contact No
+91-9465331815
+91-9465331815
Contact Email
cayogeshmehra@gmail.com
cayogeshmehra@gmail.com
It becomes feasible for a foreign company to run their business in India; all they have to do is register a branch. The approval for the branch office registration is given by Reserve Bank of India through AD category 1 Banker and additional registration of the foreign company with the ROC. A branch office of a foreign company is considered as a foreign entity.
With the opening of a branch office foreign company enjoys the liberty of operating full-fledged business in India. BO is authorized to carry the similar trading activities as conducted by the Head Company or group companies. Though, when it comes to manufacturing activities BO is restricted. A branch office directly cannot conduct manufacturing activities though it has the authority to sub-contract these activities to an Indian manufacturer.
The name of the Branch Office must be similar to that of the parent company. Below is the list of other crucial facts that one should keep in mind before applying for branch office registration:
It is necessary for a foreign parent company to have a beneficial track record of the past five working years in a row with the net worth of more than $ 1, 00,000 aptly mentioned in the financial statement.
The amount of profit earned by the branch office can be remitted from India to the parent company once the payment of all taxes is cleared and audit of all books of accounts is done.
It is necessary for a branch office to share the same name as of a parent company.
The income tax applicable on the profits of the branch office of the foreign parent company in India is 40%, surcharges are also applicable. GST is imposed on the supply of goods and services.
Exact and accurate documentation plays a crucial role in the process of Branch Office registration. Documents have to be latest and eligible.
It is the responsibility of Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016 to finalize the establishment place for a foreign company’s business in India.
On receiving the complete set of authentic documents the next step is to draft following documents for signature purpose by the applicant company and the authorised signatory
In the digital world, digital holds equal importance as that of a paper signature. They are considered no different from a physical or paper signature. New process of application filing to the registrar of companies is done in digital format. To authenticate the process of application filling digital signature is required of the proposed shareholders and directors.
Branch office application for a foreign company is filed in FNC. The application is filed to the Reserve Bank of India via AD Bank (Authorised Dealer). The AD bank has an important role since all the communication to the RBI is dispelled through them.
A request pertaining to the scrutiny of documents is sent to the foreign company’s banker. This process of sending request for the purpose of verification is also called swift based verification. Once the documents are confirmed from the foreign banker the application is preceded for the approval purpose. The RBI/AD can also ask for the additional documents as the case may be.
A specific policy is followed for approving the branch office in India by the AD Banker itself. Priority is given to the cases where automatic route is not available.
Once the approval is received from RBI for the establishment of Branch Office in India, an application is filed in form FC-1 for branch office registration of the foreign company within 30 days of such approval. DIN is required in case of any Indian director and the digital signature is needed of the authorised signatory for the purpose of e-filing statutory forms with the ROC.
Income Tax department of India issues a unique 10 digit number, known as PAN number. Once the PAN number is obtained, the branch office is eligible to open its bank account. And it is necessary for every taxpayer to obtain Tax Deduction Account Number to obey all the TDS norms.
On obtaining Bank Account and cheque book the need arises for a copy of the check for making application for GST registration and Import Export Code.
