India Entry — Branch & Liaison Office Setup

Foreign companies that do not want an Indian subsidiary can operate through an office of the foreign company itself. A liaison office may only act as a communication channel: promoting the parent's products, coordinating, and gathering market information. It cannot earn income in India. A branch office can carry on specified activities such as export and import, professional or consultancy services, research and technical support, but not manufacturing in its own right. A project office is set up to execute a specific contract in India.

None of these is a separate legal entity: the foreign company is directly liable, and a branch is taxed in India on its Indian profits at the rate applicable to foreign companies.

• Eligibility: the parent must meet the profit-track-record and net-worth tests set by the RBI, which differ for branch and liaison offices.
• Application through an AD Category-I bank, which forwards it to the RBI where required (for example in sensitive sectors or for certain countries).
• On approval, registration with the Registrar of Companies in Form FC-1 within 30 days of establishing a place of business.
• PAN, TAN, GST where applicable, and a bank account limited to permitted credits and debits.

Figures and timelines above reflect our understanding at the time of writing; confirm against the latest Act, Rules and notifications before relying on them.

Branch and liaison offices file an Annual Activity Certificate from a Chartered Accountant with the AD bank and the income tax department, audited accounts with the ROC, and income tax returns. Liaison office approvals are granted for a limited period and must be renewed or the office converted or closed. Closure requires its own approvals and a no-dues position.

If you expect to earn revenue in India on a lasting basis, a wholly owned subsidiary is usually simpler. Our sister site explains India entry structures in more depth.