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Branch Office of Foreign Company in India
Planning to Start a business in India:
Sterling Tax Partners is having team of expert professional C.A., C.P.A, Cost Accountant, C.S. Lawyer that will ensure all legal formalities has been taken care with complete due diligence for starting a business in India.
Our expert team would help to make the decision for structure (Subsidiary company in India, branch office in India or liaison office in India or join venture in India) that a foreign Company need to choose while starting up the business in India. We are here to make your process smooth and ease your business. Now, shift all your tension to us.
Introduction: Branch office of foreign Company in India
Setting up the branch office of foreign Company in India is a preferred choice when foreign Company intend to extend their existing business in India or when they seek to establish a temporary presence in India.
Benefit of opening Branch office in India
- The branch office offers a greater level of control to the parent company. A branch office is known as a dependent type of company, which means that its activities are entirely managed by the parent company in terms of the decision-making process.
- The branch office in India maintains the brand value of the parent company as it shall use the same name as that of the Parent company.
Requirements for Company registration of Foreign Subsidiary in India
- Foreign Company should have profitable track record during immediately preceeding five financial years in their home country.
- The net worth of Parent Company should be $ 1,00,000 or more
- Application for opening of branch office should be submitted through designated AD Category-1 bank to Reserve Bank of India as per FEMA,1999.
Documents required for opening the branch office of foreign Company in India
- Certificate of incorporation of foreign Company
- Memorandum of Association
- Article of Association
- RBI Permission letter
- Official approval by Foreign's Company board for establishing the branch office in India.
- Information about the Company's history, nature of business and key stakeholders
- DSC of authorised signatory
- DIN of Directors
Process for incorporation of branch office of foreign Subsidiary in India
1
Apply for Digital Signature of Authorised signatory:
Our expert team at sterling tax partner will help to apply and get the DSC within 1-2 working after completion of all documentation.
2
Obtaining RBI Approval:
As a first step, our expert at Sterling Tax Partners would help to obtain the approval from Foreign Exchange Department of Reserve Bank of India.
3
Appointing an Authorized Dealer (AD) Bank:
Once the Company receive the approval from RBI, our expert at Sterling help to appoint the Authorised Dealer Bank. Application for branch office registration would be submitted to RBI through AD Bank. These bank facilitate the foreign transaction in India.
4
Registering a Branch Office with the Registrar of Companies (ROC):
Once the RBI has approved the establishment of Branch office, the next step is to register with Registrar of the Companies in the specific state where the office is located. Our team would help to prepare the documents and required form to be filed with ROC and also help to resolve the query received post filing of application.
5
PAN, TAN and Opening of Bank Account:
Once the application with ROC is approved, our team would help to apply for PAN, TAN and opening of Bank Account in India.
Frequently Asked Questions
A branch office in India operates as an extension of a Parent Company which is based outside India not as separate legal entities. Its name will be similar as of Parent Company name only.
A Branch office of a foreign parent company is not treated as a separate and distinct entity in India and for tax purposes, the Indian government taxes such entities with tax rates applicable to a foreign company, viz. 35%. exclusive of surcharges and education cess or secondary and higher education cess, on income generated by conducting activities which constitute a “business connection” with the parent company.
Yes, but a prior approval of the RBI will be required.
The Branch office of a foreign company can be opened if the applicant foreign corporation has a track record of profit generation for the past 5 years and it is financially sound.
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