Branch Office Registration

Register A Branch Office in Delhi India

One tool available to foreign enterprises looking to get into the Indian market is the Branch Office (BO), which allows them to spread their operations into different places and grow their customer base. Under very rigorous guidelines, international corporations are permitted by the Reserve Bank of India (RBI) to test and conduct business in India, subject to specific restrictions. The Reserve Bank of India must be consulted by foreign businesses intending to open branches in India before establishing branch offices. The Authorized Dealer (AD) Bank must submit an application in Form FNC to RBI on behalf of the Foreign Company. 

Section 6(6) of the Foreign Exchange Management Act, 1999 ("FEMA"), as well as Notification No. FEMA 22/2000-RB, dated May 3, 2000, as amended from time to time, governs the formation of a foreign entity's Branch Office in India. Following RBI permission, a foreign company's branch office is required by law to register under the 2013 Companies Act in India. After being registered under the 2013 Companies Act, the Branch Office is able to operate similarly to a standard Domestic Company.

In India, the Branch Office is allowed to carry out the following tasks:

• Export and import of products.
• Delivering expert or consulting services.
• To serve as an agent for purchases and sales in India on behalf of the parent firm.
• Doing research in fields of interest to the parent business.
• Encouraging parent/group corporations and Indian enterprises to collaborate financially and technically.
• Serve as a conduit for information between the parent firm and the Indian businesses.
• To provide technical support for the goods that the parent or group companies supply.

The Branch Office, which is present in India, is approved to participate in the activities conducted only by the parent company. They are not, however, permitted to engage in any direct or indirect manufacturing, processing, or retail trading activity in India.

The Advantages of Opening a Branch Office Are as Follows

Extending operations into a new market:

• Minimizing the price rate for startup companies.
• Improved approach to the administration of the business.
• Consumer access after closure.
• Optimization of various resources.

Fewer legal compliances than when a new firm is registered.

Duration of the Procedure / Enrollment Procedure

The process of registering a branch office typically takes 45 to 50 working days; however, the exact amount of time depends on how long the Reserve Bank of India and the Authorized Dealer (AD) Bank take to process the registration.

1 – DOCUMENTATION:

The Indian Embassy or Notary Public in the nation of registration shall attest any documents necessary for opening a branch office.

2 – APPLICATION TO AD BANK:

It is necessary to submit the application to AD Bank in order to create a Branch Office in India.

3 – UIN:

Once the application is verified by the RBI, the Branch Office is assigned a Unique Identification Number (UIN). 

4 – FILING WITH MCA:

Foreign enterprises must register the appropriate e-form with the Ministry of Corporate Affairs (MCA) within 30 days after the creation of a Branch Office in India.

5 – CREATING AN ACCOUNT IN THE BANK:

Any AD Category-I Bank in India may be approached by a Branch Office to open an account in India for the purpose of establishing the Branch Office.

6 - REGISTRATION POST INCORPORATION :

In accordance with the Shops and Establishment Act, the Goods and Services Tax (GST), the Professional Tax Act, and other laws, the Branch Office must register.

Procedure Registration of Branch Office in Delhi India

The RBI is in charge of overseeing and regulating Branch Office registration and oversight in India. In India, there are primarily two paths for opening branch offices.

• The RBI Route (automatic route) and
• Central Government Route (Approval Route)

Approval is not required from the government or other authorities to establish a branch office under an automatic route.

Reserve Bank Route - In cases where the foreign entity's primary line of business is inside an industry, that allows 100% Foreign Direct Investment (FDI) under the automatic route.

Government Route - If the foreign entity's primary line of business is located in an industry where 100% FDI is prohibited under the automatic route. Applications from organizations that fulfil this description, as well as those from departments, government bodies, non-profit organizations (which The Reserve Bank evaluates), and non-government organizations in consultation with the Ministry of Finance, Government of India.

There are some of the additional points described below by the Reserve Bank while sanctioning Liaison/Branch Offices of foreign entities:

Track Record:

For Branch Office - A history of profits earned in the nation of origin during the five financial years prior.

• According to the most recent audited balance sheet or account statement certified by a certified public accountant or any other registered accounts practitioner, net worth is defined as the total of paid-up capital and free reserves, less intangible assets.
• Not less than USD 100,000 or its equivalent is required for the Branch Office.

The foreign entity must submit the application for setting up a BO or LO in India through an AD Category I bank to the General Manager of the Foreign Exchange Department, Central Office Cell, Reserve Bank of India, New Delhi Regional Office, 6, Parliament Street, New Delhi-110 001, India. The application must be sent with the required paperwork, such as:

• Certificate of Incorporation in English Version/ Registration or Memorandum and Association Articles attested by Indian Embassy or Notary Public in the Country of Registration.
• Latest Audited Balance Sheet of the applicant entity.

Document Needed to Register a Branch Office in India

• Copies of Form FNC.
• A letter to RBI from the Parent Company's chief officer.
• A parent company letter of authority supporting the local representative.
• Resolution or letter of approval from the parent firm authorizing the establishment of a liaison office in India.
• Correspondence from the parent firm expressing its intention to assist with the operations in India.
• Two authenticated English copies of the parent company's MOA, AOA (Charter Document), and Certificate of Incorporation duly certified by the Indian embassy or notary public in the nation of registration.
• The Indian Consulate has duly notarized, translated, and certified the Certificate of Incorporation.
• The parent company's most recent audited balance sheet and yearly accounts, properly translated and notarized for the previous three years. & Approved by Directors & Indian Consulate.
• Name, address, phone number, and email address of the authorized representative in their home nation.
• Information about the Organization's Bankers, including their nationality and bank account number.
• A pledge from the organization to cooperate with requests for information or opinions from its banker made by the Reserve Bank of India and the Government of India.
• The anticipated level of finance for operations in India.
• Information Concerning the planned local office's address, the anticipated number of employees, the proportion of foreign workers, and, should it be chosen, the head of the local office's address.
• Briefly describe the company's products and services and the activities that the applicant organisation has undertaken in their home country.
• Certificate of Bankers.
• Current Identification Documentation for Every Director, Verified by the Consulate and Bank in the Home Country.
• Most recent proof of address for each director, verified by the home country's banker and consulate.
• Information about the People or Business Owning More Than 10% of the Equity.
• Organizational Structure in Relation to Shareholding Pattern.
• Full KYC verification for shareholders with more than 10% equity in the applying company.
• Form for Opening a Bank Account for Indian Bank, properly signed.