Branch Office Registration
Of Foreign Company in India
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A foreign company’s branch office can start full-fledged operations in India after obtaining permission from the RBI and registration with the ROC. zeroBrokagetax offers expertise in establishing a Branch Office, Tax Filings, and payroll.
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Important Disclaimer
We help you incorporate Companies in India at a reasonable fee and with complete transparency regarding the overall cost. Talk to our advisors to obtain an all-inclusive fee.
We are a professional consulting firm specialising in company registration, taxation, accounting, payroll, compliance, and intellectual property rights (IPR) services to assist new and existing businesses in India. We provide our professional services at a reasonable fee, explaining the eligibility, process, and documents required for setting up and maintaining a business. We also prepare and file necessary applications with relevant government agencies such as the Registrar of Companies (ROC) and the Income Tax Department. We do not directly provide government documents or represent ourselves as a government agency.
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Overview of the Company Registration Process in India
| Eligibility | The Companies Act 2013 and the Rules |
|---|---|
| Timeline | ₹ 3499/- (Best Fee Guaranteed by zeroBrokagetax) |
| Indian Representative | Varies from state to state and on the proposed capital |
| ROC Fee | Varies from state to state and on the proposed capitalm, accusamus! Eius? |
| ROC Fee | Varies from state to state and on the proposed capital |
| Prof Fee | ₹ 3499/- (Best Fee Guaranteed by zeroBrokagetax) |
| Prof Fee | ₹ 3499/- (Best Fee Guaranteed by zeroBrokagetax) |
How to establish a Branch Office in India?
A branch office is a great way for a foreign company to expand its operations in India. By setting up the branch office in India, the foreign company does not create a new legal entity but obtains permission to operate as a foreign-incorporated legal entity in India. The Branch office carries exactly the same name and identity in India; however, it can undertake only a few permitted activities that are allowed for a Branch Office in India. For instance, it cannot engage in manufacturing, processing, and retail trading activities. To establish a Branch Office in India, prior permission from the RBI is required; we help foreign companies receive the approval to establish a Branch Office in India.
Important Points
- Startups Seeking Investors
- With Multiple Co-Founders
- Lowest Tax Rates
- Ability to offer ESOP
- IRS Tax Problems
- IRS Tax Problems
Eligibility Criteria for Branch Office Registration of Foreign Company
To register a branch office in India, the foreign company must ensure that it meets the minimum criteria prescribed under 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 (Notification No. FEMA 22(R)/ 2016-RB). The criteria for setting up the branch office of a foreign company is concerned with the minimum net worth, profitability track record and the proposed business activities in India. The table below provides detailed information.
2 to 200 Shareholders
The shareholders may be individuals capable of entering into a contract or legal entities.
2 to 15 Directors
Directors are tasked with overseeing operations and ensuring compliance..
One Resident Director
One director must be a resident of India and stay there for at least 120 days
Unique Name of Company
The company name must be unique and distinct from others, whether a company or LLP.
Pre-Defined Capital
No minimum capital level is prescribed. However, the incorporation fee is based on capital.
Legal Object/Activity
The company's object should be legal and well-defined in the company's MOA.
The Branch Office can carry out only permitted activities.
Unlike a wholly owned subsidiary, which can do any business activity as a separate legal entity in India, the Branch Office of a foreign company can undertake only a limited set of activities. You are advised to read our analysis on the permitted list of activities for a Branch Office at https://www.zeroBrokagetax.com/permitted-activities-of-branch-office-india. Following is the list of permitted activities in India
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List of Documents For Company Registration
As experienced consultants for company registration, we at zeroBrokagetax understand the importance of documentation in ensuring a smooth and successful registration process for a Private Limited Company. To make it easier for our clients, we have compiled a table below listing all the necessary documents required for the incorporation process. The list of documents below is for the Company Incorporation by all Resident Indians. In case any of the shareholders or directors is a foreign national or NRI/PIO, please refer to the Incorporation of Company With FDI.
Directors/Shareholder Documents
- PAN Card
- Aadhar Card
- Colour Photo
- Proof of Registered Office
- NOC from the Owner of the Registered Office
- Identity Proof
- Address Proof
Incorporation on Communication Address:
In India, entrepreneurs starting a new business can begin their company registration process with a “communication address” even before securing a permanent office. This temporary address helps you start the formalities while searching for the ideal premises. It’s essential to remember that within 30 days of incorporation, you need to establish a physical “registered office” in the same state and file Form INC-22 with the Registrar of Companies (ROC) to report the official address change.
Process of Pvt Ltd Company Registration
For Pvt Company registration in India, get a Digital Signature Certificate (DSC) and Director Identification Number (DIN). Choose a unique name, draft the MoA and AoA, and submit the incorporation application through the SPICe+ form with the necessary documents and fees. We offer end-to-end Company Registration Services.
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Obtaining the Digital Signature of all Promoters
Making a digital signature (DSC) for directors/shareholders is the first step in Pvt Limited Company Registration. We are the Registration Authority (RA) of Certifying Authorities such as Emudhra, SignX, and others appointed by the Controller of Certifying Authorities of the Government of India. We help DSC applicants collect documents and submit DSC applications to obtain DSC.
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Obtaining the Digital Signature of all Promoters
Making a digital signature (DSC) for directors/shareholders is the first step in Pvt Limited Company Registration. We are the Registration Authority (RA) of Certifying Authorities such as Emudhra, SignX, and others appointed by the Controller of Certifying Authorities of the Government of India. We help DSC applicants collect documents and submit DSC applications to obtain DSC.
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Obtaining the Digital Signature of all Promoters
Making a digital signature (DSC) for directors/shareholders is the first step in Pvt Limited Company Registration. We are the Registration Authority (RA) of Certifying Authorities such as Emudhra, SignX, and others appointed by the Controller of Certifying Authorities of the Government of India. We help DSC applicants collect documents and submit DSC applications to obtain DSC.
The Branch Office is taxed as a Foreign Entity
The branch office of foreign corporations is subject to a higher rate of base income tax of 40% in comparison to domestic companies or the subsidiary of foreign companies, which is subject to tax at 15-22% plus an applicable surcharge. The Branch office is taxed for the Income Received or accrued in India in the capacity of the foreign company’s Permanent Establishment (PE). The following shall be the net Tax rate after considering the surcharge and cess.
| S.No. | Effective Tax rate | Effective Tax rate |
|---|---|---|
| 1 | ₹ 3499/- (Best Fee Guaranteed by zeroBrokagetax) | ₹ 3499/- (Best Fee Guaranteed by zeroBrokagetax) |
| 2 | Varies from state to state and on the proposed capital | ₹ 3499/- (Best Fee Guaranteed by zeroBrokagetax) |
| 3 | Varies from state to state and on the proposed capitalm, accusamus! Eius? | ₹ 3499/- (Best Fee Guaranteed by zeroBrokagetax) |
| 4 | Varies from state to state and on the proposed capital | ₹ 3499/- (Best Fee Guaranteed by zeroBrokagetax) |
| 5 | ₹ 3499/- (Best Fee Guaranteed by zeroBrokagetax) | ₹ 3499/- (Best Fee Guaranteed by zeroBrokagetax) |
Incorporate an Indian Subsidiary for greater flexibility and lower tax rates.
The branch office has a limited scope of operation in terms of permitted activities and is subject to a very high Income Tax rate. On the other hand, Incorporating a wholly-owned subsidiary makes greater sense in view of its ability to undertake all kinds of business activities at par with any other domestic company. The Income tax for a subsidiary of a foreign company shall be 15% in the case of manufacturing activities and 22% in the case of other activities.
Annual Returns for the Branch Office
The foreign company’s branch office must adhere to the relevant provisions of the Companies Act, FEMA, and Income Tax Act, among others. These laws mandate that annual returns be submitted to regulatory bodies such as RBI, the Income Tax Department, and the Registrar of Companies. The table below attempts to provide the most common annual filings along with their due dates and the relevant regulatory body.
| Name of Return | Last Date | RBI | ROC | Income Tax |
|---|---|---|---|---|
| Form FC 4 | ₹ 3499/- | |||
| Statutory Audit | Varies frl | |||
| Annual Activity Certificate (AAC) | Varies Eius? | ₹ 3499/- | ₹ 3499/- | |
| Income Tax Return (ITR) | Varies frl | ₹ 3499/- | ₹ 3499/- | ₹ 3499/- |
| Income Tax Return | ₹ 3499/- | ₹ 3499/- | ₹ 3499/- | ₹ 3499/- |
Annual ROC Returns by the Branch Office
The foreign company’s branch office must adhere to the relevant provisions of the Companies Act, FEMA, and Income Tax Act, among others. These laws mandate that annual returns be submitted to regulatory bodies such as RBI, the Income Tax Department.
- Statutory Audit: The foreign company's branch office is considered a Permanent Establishment (PE) and thus comes within the scope of the Statutory Audit under section 139 of the Companies Act. The FEMA Regulations also require the filing of the Annual Activity Certificate from a CA with the audited financial statement; therefore, the Audit is applicable to the Branch Office. The audit should be completed well before the due dates of filing the AAC and ROC Return in form FC-3, for which the due date is 30th September.
- Statutory Audit: The foreign company's branch office is considered a Permanent Establishment (PE) and thus comes within the scope of the Statutory Audit under section 139 of the Companies Act. The FEMA Regulations also require the filing of the Annual Activity Certificate from a CA with the audited financial statement; therefore, the Audit is applicable to the Branch Office. The audit should be completed well before the due dates of filing the AAC and ROC Return in form FC-3, for which the due date is 30th September.
Annual Filing To RBI & Income Tax Department
The foreign company’s branch office must adhere to the relevant provisions of the Companies Act, FEMA, and Income Tax Act, among others. These laws mandate that annual returns be submitted to regulatory bodies such as RBI, the Income Tax Department.
- Annual Activity Certificate: The foreign company's branch office is considered a Permanent Establishment (PE) and thus comes within the scope of the Statutory Audit under section 139 of the Companies Act. The FEMA Regulations also require the filing of the Annual Activity Certificate from a CA with the audited financial statement; therefore, the Audit is applicable to the Branch Office. The audit should be completed well before the due dates of filing the AAC and ROC Return in form FC-3, for which the due date is 30th September.
- Tax Audit: The foreign company's branch office is considered a Permanent Establishment (PE) and thus comes within the scope of the Statutory Audit under section 139 of the Companies Act. The FEMA Regulations also require the filing of the Annual Activity Certificate from a CA with the audited financial statement; therefore, the Audit is applicable to the Branch Office. The audit should be completed well before the due dates of filing the AAC and ROC Return in form FC-3, for which the due date is 30th September.
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