A Foreign Company/ Corporation can establish a branch office in India by satisfying the eligibility criteria and obtaining prior approval of the Reserve Bank of India (RBI) and subsequently registering it with the Registrar of Companies.
Project Branch Office
There are various methods by way of which a foreign company can enter Indian economy, and the decision of a particular format depends on the business objective and the purpose for which the foreign company or corporation is coming into India. If the purpose is to study Indian Market, potential, or to spread awareness of the product or services, then the best choice would be to form a liaison or representative office of the foreign company. However in case, the objective is to book orders, but the delivery of goods or services shall be the responsibility of the head office, a branch office of the foreign company is a good choice. A branch office or a liaison office is a foreign company for tax laws and Indian government taxes the profits of such entities at higher rates as compared to Indian entities.
Limitation of this kind of business is that personal assets of owner/ proprietor of business is exposed to losses and liabilities of the business.
Further, Transparency in case of proprietorship concern is very less, hence big corporate houses do not prefer to do business with proprietorship businesses.
Expert Advisorz can help you start your proprietorship business in a hassle free manner. We at Expert Advisorz provide following services to our Proprietorship client
The Branch office is not allowed to carry manufacturing activities directly but can subcontract it to Indian manufacturers. It can carry out some specific type of activities as prescribed by RBI.
The application for Branch office approval is considered by RBI under two routes:
- Automatic Route
- Government Route
Secretarial team of Expert Advisorz help you form your Branch Office in hassle free manner. We at Expert Advisorz provide following services to Branch Office:-
- Attestation or Legalisation of Documents:- All requisite documents to be submitted with RBI are required to be notarised through Indian Embassy and apostille, in case the country of origin falls under Hague convention or consolarize, in case the country of origin falls neither under Hague Convention nor under Commonwealth Country.
- Digital Signature of Authorised representative:- As the application for Branch Office Registration is filed online with Digital Signatures of the authorised representative of the foreign Company, hence it is mandatory to obtain the digital signature of such authorised representative. We at Expert Advisorz have a separate compliance department which looks after issuance of DSC.
- Application to RBI through AD Category-I Bank:- The application for registration of a branch office of a foreign company is filed with Reserve Bank of India through AD Category-I Bank (Authorised Dealer) with the same name as of the foreign company. The AD Category-I Bank plays a crucial role as all the communication to the RBI has to be routed through them. We have excellent relationship with many banks in India, which certainly help in applying to the RBI for opening of Branch Office.
- Verification of KYC from AD Category-I Bank:- After the application is filed with the AD Category-I Bank, a request for verification of documents is sent to the banker of the foreign company. This process is also known as swift based verification. After receipt of confirmation of the documents from the foreign banker, the application is submitted to the RBI for their approval by AD Category-I Bank. The RBI may seek clarification or any additional document which need to be submitted.
- Approval of RBI for Branch Office Registration:- If the business activity to be undertaken qualifies for 100% FDI then RBI is the approving authority, and in all other cases, RBI decides with consultation with the relevant ministry of the central government. The decision of RBI is on the case to case basis, and there is no standard rule which applies in all cases. After approval RBI allots a unique number to the branch office known as UIN. After receiving UIN from RBI, the AD Category-I Bank shall issue the approval letter to the non-resident entity. We help our clients to get the approval from the RBI.
- Registration of Branch office with ROC:- On approval from RBI for the establishment of the branch office in India, an application for registration of branch office of the foreign company is submitted to Registrar of Companies within 30 days of such approval. We at Expert Advisorz help in applying for the registration of branch office with ROC.
- Applying for PAN:- Permanent Account Number (PAN) is must for starting a business in India. It’s a unique 10-digit alpha-numeric no. allotted by Income Tax Department. We at Expert Advisorz help you in applying and getting PAN.
- Shops & Establishment Registration:- Every shop or commercial establishment is required to get itself registered with the labour department of the state government. The application for registration must be filed within 30 days of starting a business in India. We at Expert Advisorz help your business get this registration.
- Open a bank Account:- To transact the business, the Branch Office must open a current account in the name of the Company. However due to complex regulatory requirement it often become a tedious task to open a bank account. We at Expert Advisorz assist our clients in opening their bank account.
- Professional Tax Registration:- Professional Tax is a tax which is levied by some state on the income earned by professionals and salaried employees. Expert Advisorz help you obtain professional tax registration.
- GST Registration:- GST is a tax on goods and services, every person who supplies any goods or service has to get registered under GST. We at Expert Advisors help you obtain GST Registration.
- Trademark Registration:- In today’s competitive and dynamic business environment every business spends millions of rupees and number of years in creating a brand. Still, some of them fails to get it registered with IPR authority and thus loses the brand. We at Expert Advisorz help our client right from applying trademark registration to final approval of the same.
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