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Business » Doing Business » Opening Branch in India
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Opening Branch in India |
Permission to set up a branch office in India is granted by the Reserve Bank of India. A Branch office of a foreign company upon approval from the RBI should be effectively registered under the (Indian) Companies Act, 1956. Under the Company Act, 1956 the branch office can carry on its business activities in the same way as a domestic company. Unlike a liaison office a branch office can generate revenue from the sales in the local market and send back the profits to the foreign parent company.
A branch office so approved and registered can carry on the following activities:
- Export/Import of goods.
- Consultancy services.
- Carrying out research work, in which the parent company is occupied.
- Promoting financial collaborations between Indian companies and parent Group Company.
- Rendering services in development of software and Information Technology in India.
- Rendering technical support to the products supplied by the group companies.
- Shipping Company/ Foreign airline.
Opening a Branch Office in India
A company expands its business by opening up its branch offices in different parts of the domestic country as well as in other countries.
A branch office refers to an establishment which carries on significantly the same business and activity as is carried out by its Head Office.
Such offices help the company in
- Spreading its business to diverse locations and thus increasing the customer base
- Bringing its product closer to the customers by increasing their accessibility to it
- Bringing its product closer to the customers by increasing their accessibility to it
- Making the distribution and marketing of its services and goods easier and more effective.
Foreign companies engaged in trading and manufacturing activities abroad are allowed to set up Branch Offices in India for the following purposes:
- Export/Import of goods
- Rendering professional or consultancy services
- Carrying out research work, in which the parent company is engaged.
- Financial technical or promoting collaborations between Indian companies and parent or overseas group company.
- Representing the parent company in India and acting as selling/ buying agents in India.
- Rendering technical support to the products supplied by the parent/ group companies.
- Foreign airline/shipping company.
- Foreign Banks.
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