Top Business Setup place | Entity Formation

Setup Business in India

Branch Office Formation

Branch Office allows foreign company to conduct business on full-fledged basis, only upon obtaining prior approval of Reserve Bank of India. However, the BO is not considered as the separate legal entity and would be registered in the name of the foreign entity only by complying with the applicable foreign exchange laws and such other laws for the time being in force. It must be noted that no direct manufacturing activity can be conducted, but may be sub-contracted to Indian manufacturer.

For setting up a BO, the applicant foreign company should be engaged in manufacturing or trading activities with profit in the immediate preceding five financial years and should have a net worth of not less than USD 100,000 in its home country.

Timeline

We at CorpAcumen Global ensure to undertake your comprehensive filing requirements and obtain necessary approvals from the Reserve Bank of India and Registrar of Companies. We aim to complete the process within 45-60 working days post obtaining necessary details from our clients.

Features

Permissible Activities

Export/import of goods
Rendering professional or consultancy services
Carrying out research work in which the parent company is engaged
Promoting technical or financial collaborations between Indian companies and parent or overseas group company
Representing the parent company in India and acting as buying/ selling agent in India
Rendering services in Information Technology and development of software in India
Rendering technical support to the products supplied by parent/group companies
Representing a foreign airline/shipping company

Registration Requirements

Necessary filings are to be made to the Reserve Bank of India in Form FNC*
After obtaining approval from Reserve Bank of India, necessary documentations are to be filed with the Registrar of Companies in relevant form.

Time Limit for opening BO

BO shall be opened within 6 months from the date receiving the approval of Reserve Bank of India
Further extension of 6 months may be granted by AD Category-I bank for reasons beyond the control of the PROI.

Fund Facilities

Authorised Dealer Category-I bank may extend fund and/or non-fund based facilities to BO based on the guidelines issued by the Reserve Bank.

Annual Compliances

Filing of Annual Activity Certificate in Form FNC
AAC is to be obtained from chartered accountant, depicting the status of the Project and certifying that the accounts of LO has been audited and the activities are in conformity with those allowed by the Reserve Bank of India
Filing of annual accounts with the Registrar of Companies within 6 months of the end of financial year

Documentation Required

Copy of the Certificate of Incorporation / Registration and charter documents of the foreign company
Audited Balance sheet of the applicant company for the last five years (If the applicants’ home country laws/regulations do not insist on auditing of accounts, an Account Statement certified by a Certified Public Accountant (CPA) or any Registered Accounts Practitioner by any name, clearly showing the net worth may be submitted)
Bankers’ Report from the applicant’s banker in the host country/ country of registration showing the number of years the applicant has had banking relations with that bank
Power of Attorney in favor of signatory of Form FNC in case the Head of the overseas entity is not signing the Form FNC.

To be noted:

All the documents to be filed along with FNC form shall be legalised either through Indian Embassy or to be apostiled as per Hague convention.
If the originals are in a language other than in English, the same may be translated into English and notarized as above and cross verified/attested by the Indian Embassy/ Consulate in the home country.

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