Posts tagged ‘branch office’


1. Can foreign companies set up liaison office, branch office or project office in India?
A. Yes
2. Where is the application for the setting up of a liaison or branch office to be submitted?
A.Applications need to be submitted to Foreign Investment Division, Foreign Exchange Department,

Reserve Bank of India, Central Office, Mumbai through an Authorized Dealer bank

3. Which are the two routes under which application for liaison offices and branch offices considered

by the Reserve Bank?
A.Reserve Bank route where FDI is permitted under the automatic route and Government route

where FDI is not permitted under the automatic route.

4. What is profit making track record required for a branch office and liaison office to set up office in

A. 5 years for a branch office and 3 years for a liaison office.

5. What is the net worth expected for a foreign company to set up branch office and liaison office in

A. Not less than USD 100,000 for a branch office and not less than USD 50,000 for a liaison office.

6. What is the initial period of operation permitted for a branch office or a liaison office?
A. Initially three years. The same can be renewed later.

7. Is it mandatory for branch office and liaison office to obtain a PAN number?
A. Yes.

8. What are the activities a liaison office can undertake in India?
a.Representing the parent company in India.
b.Promoting export or import from or to India.
c.Promoting technical and financial collaborations
d.It cannot undertake any business activities and cannot earn income in India.

9. What are the activities a branch office can undertake in India?
a. Export or import of goods
b. Rendering professional or consultancy services.
c. Carrying out research work, in areas in which the parent company is engaged.
d. Promoting technical or financial collaborations between Indian companies and parent or overseas

group company.
e. Representing the parent company in India and acting as buying or selling agent in India.
f. Rendering services in information technology and development of software in India.
g. Rendering technical support to the products supplied by parent/group companies.
h. Airline / shipping company.
i. Retail and manufacturing activities are not permitted for branch offices.

10. Whether branch offices can remit profit outside India?
A. Yes, subject to applicable taxes in India.

11. When can a foreign company set up a Project office in India?
A. Foreign Companies who have secured a contract from an Indian company to execute a project in

India can set up a project office in India.

12. Are foreign partnership or proprietorship concerns permitted to set up branch/liaison office/

project office in India?
A. No.

13. Can entities from Nepal establish branch offices and project offices in India?
A. No.

14. Can foreign liaison offices, project offices and branch offices acquire immovable property in

A. Only branch office and project office, not liaison office (exception being companies from Pakistan,

Bangladesh, Sri Lanka, Afghanistan, Iran, Bhutan or China).


1. What are the legal forms in which a foreign company or a foreigner can conduct business in India?

a. By incorporating a company under the Companies Act 1956, which may be a joint venture or a wholly owned subsidiary.
b. By opening an office of a foreign entity which may be a liasoning office, representative office, a project office or a branch office.

2. What are the two routes through which foreign investment is permitted in India?
a. Automatic route
b. Government route.

3. What is automatic route of Foreign Investment?
Under this up to 100% of investment is permitted in most of the activities and sectors. There is no requirement of any prior government approval for the investments in this route. The investor shall notify the Reserve Bank of India within 30 days of the receipt of the inward remittance and file the required documents with RBI within 30 days of issue of shares to the non resident investors.

4. Explain Government route of Foreign Investment?
These are sectors or activities where foreign investment requires prior government permission from Foreign Investment Promotion Board (FIPB). These include:
a. Sectors mentioned in Press Note I(2005 series) issued by the Government of India
b. Areas reserved for Small Scale sector.

5. Which are the areas where Foreign Direct Investment is not permitted in India?
A.   a. Retail Trading
b. Atomic Energy
c. Lottery business
d. Gambling and betting
e. Chit fund
f. Nidhi company
g. Agricultural or plantation activities
h. Housing and real estate business.
i. Transferable Developmental Rights.

6.  Can a foreigner repatriate the profits made in India?

7. Can a foreigner do partnership or proprietorship concern business in India?
No. However NRIs and PIOs are permitted for the same. But the profits are not repatriable.