What is Foreign Branch Office India

A Foreign Branch Office is really a full functional branch of the parent company within India. It can commence any specific business actions in India, apart from output of products, as may be allowed by Reserve Bank of India (RBI).It may generate income from India and is responsible to give Tax in India.

Activities Permitted

1. Export / Transfer of goods
2. Rendering specialist or consultancy expertise
3. Implementing searching, where the parent organization is engaged.
4. Advertising and marketing specialised or even economic partnerships between Indian companies along with parent or international group company.
5. Addressing the parent company within India and serving as buying/selling brokers in India.
6. Manifesting expert services in Information Technology and development of software within India.
7. Rendering technical support to the products supplied by the parent/ group companies.
8. Foreign airline/shipping company.

A branch office is just not permitted to perform manufacturing activities on its own however is allowed to subcontract these to an Indian producer. Branch Offices founded with the acceptance of RBI, might remit outside India profit of the branch, net of relevant Indian taxes and subject to RBI rules Authorization for establishing branch offices is granted by the Reserve Bank of India (RBI).

Some other Situations

• The branch office can't extend its activities or attempt any fresh buying and selling, professional or industrial activity apart from those which usually are specifically licensed by the RBI
• The whole expense of the branch office in India will likely be fulfilled either from the resources obtained by it from out of the country through ordinary banking programmes or via earnings generated by it in India
• The branch office cannot accept any deposits in India
• The commission received through the branch office via parties abroad for just about any agency business is going to be repatriated to India via normal banking channels.

Method with regard to Establishing Branch Office in India

For setting up Foreign Branch Office in India and application is required to be produced to the RBI in Form FNC-1. The application must have the following particulars :-

1. Operating background of the organization around the world
2. Planned interests and business activities in India
3. Reasons for attempting to open a branch office and
4. Any foreign exchange significance pertaining to this kind of matters.

Branch Office on ?Stand Alone Basis?

Such Branch Offices can be isolated and limited to the Special Economic zone (SEZ) on it's own with no business activity / exchange will be permitted away from SEZs in India, which include branches/subsidiaries of its parent office in India.

No consent shall be essential from RBI for any company to ascertain a branch/unit in SEZs to attempt producing and service activities subject to specific situations.