Branch Office And Liaison Office


Price : 50,000.00

Establish a Branch of Foreign Company in India


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Branch office, Liaison office and Project office in India are governed under FEMA Regulations. No person resident outside India shall without prior approval of the Reserve Bank open in India a branch office or a liaison office or a project office or any other place of business by whatever name called except as laid down in FEMA Regulations.

 

Branch Office - in relation to a company, means any establishment described as such by the company.


Liaison Office - means a place of business to act as a channel of communication between the principal place of business or Head Office or by whatever name called and entities in India but which does not undertake any commercial /trading/ industrial activity, directly or indirectly, and maintains itself out of inward remittances received from abroad through normal banking channel.


Project Office - means a place of business in India to represent the interests of the foreign company executing a project in India but excludes a Liaison Office.

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Eligibility for Opening a Branch Office

A person resident outside India can establish a branch office or a liaison office in India provided it meets the following criterion:

  • For Branch Office — a profit making track record during the immediately preceding five financial years in the home country and net worth of not less than USD 100,000 or its equivalent.
  • For Liaison Office — a profit making track record during the immediately preceding three financial years in the home country and net worth of not less than USD 50,000 or its equivalent.


Provided that a person resident outside India that is not financially sound and are subsidiaries of other companies may submit a Letter of Comfort from their parent company subject to the condition that the parent company satisfies the prescribed criterion for net worth and profit.

Compliance Under Companies Act, 2013

Any foreign entity establishing its place of business in India by way of Branch office, liaison office or any other place of business shall be treated as foreign company as defined under section 2(42) of the Companies Act, 2013 which says:

A foreign company is a company or body corporate incorporated outside India having a place of business in India whether by itself or through an agent, physically or through electronic mode and conducts any business activity in India in any other manner.

Such foreign companies shall be governed by the provisions of:

(i) Chapter XXII of the Companies Act, 2013

(ii) Companies (Registration of Foreign Companies) Rules, 2014

Rule 3(3) of the Companies (Registration of Foreign Companies) Rules, 2014 requires every foreign to file eForm FC-1 to the Ministry of Corporate Affairs within 30 days of the establishment of its place of business in India.

And Rule 3(4) provides that in case of any alteration in the aforesaid documents the Foreign Company is require to submit a return in eForm FC-2 containing the particulars of alteration as per the prescribed format with the Registrar of Companies, within 30 days of any such alteration.

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