Set up a branch or liason office

Foreign companies looking to establish a presence in India may consider setting up a branch office or liaison office, depending on their business objectives and permitted activities. The two structures serve different purposes and are subject to specific regulatory and compliance requirements.

A branch office can generally undertake activities permitted under the applicable approval and regulatory framework, while a liaison office is primarily intended to facilitate communication, market understanding and coordination between the foreign company and parties in India. The appropriate structure depends on the nature of the proposed activities, the foreign company's background and the applicable regulations.

My Startup Solution provides professional assistance for the documentation, application and registration-related requirements involved in setting up a branch or liaison office in India.

What Is a Branch Office in India?

A branch office allows an eligible foreign company to establish a business presence in India for activities permitted under the applicable regulatory framework. Unlike a liaison office, a branch office may undertake certain commercial activities in India, subject to the permissions and conditions applicable to it.

The proposed activities should be evaluated carefully before applying because the permitted scope of operations can depend on the sector, foreign company's business and applicable foreign exchange regulations.

Professional assistance can help businesses understand the documentation and regulatory requirements before proceeding with the application.

What Is a Liaison Office in India?

A liaison office, also known as a representative office, is generally established by a foreign company to act as a communication channel between its overseas headquarters and Indian customers, suppliers, business partners or other stakeholders.

A liaison office is not intended to operate as an independent profit-generating business in India. Its permitted activities are therefore different from those of a branch office.

Choosing the correct structure at the beginning is important because operating activities should remain within the scope permitted for the selected office.

Who Can Set Up a Branch or Liaison Office?

Foreign companies that want to establish an Indian business presence may explore branch or liaison office registration, subject to eligibility and regulatory requirements.

The suitability of the structure can depend on factors such as:

• Nature and purpose of the proposed Indian operations
• Activities to be carried out in India
• Foreign company's financial and business track record
• Applicable sectoral regulations
• Foreign exchange requirements
• Required approvals and supporting documents
• Proposed office address and authorised representatives

Eligibility and approval requirements should be checked according to the current rules applicable to the particular foreign entity and proposed activities.

Branch Office vs Liaison Office

Understanding the difference between the two structures can help a foreign company choose the appropriate option.

Branch Office

A branch office is generally suitable when a foreign company needs to undertake permitted business activities in India. Depending on the applicable permissions, it can perform specified activities connected with the foreign company's business.

Liaison Office

A liaison office is generally suitable where the foreign company wants to establish a communication and representative presence without carrying out commercial activities that generate income in India.

The choice should be based on the actual purpose of establishing the office rather than simply selecting the structure that appears easier to register.

Documents Required for Branch or Liaison Office Setup

The exact document requirements can vary according to the applicant and regulatory route. Common documentation may include:

• Certificate of incorporation or registration of the foreign company
• Constitutional documents of the foreign entity
• Details of directors or authorised representatives
• Audited financial statements or other financial documents
• Board resolution or authorisation for establishing the Indian office
• Details of the proposed office in India
• Identification and address documents of authorised persons
• Documents required for regulatory and statutory filings

Foreign-language documents may require appropriate certification or translation before submission.

Regulatory and MCA Compliance

Setting up a branch or liaison office in India involves more than obtaining permission to operate. A foreign company establishing a place of business in India may also have registration and filing requirements under the Companies Act, 2013.

For example, the Ministry of Corporate Affairs states that a foreign company is required to file the prescribed particulars with the Registrar within 30 days of establishing its place of business in India, subject to the applicable provisions and requirements.

Depending on the structure and activities, foreign exchange regulations, banking requirements, tax registrations and other statutory compliances may also apply.

Our Branch and Liaison Office Setup Support

At My Startup Solution, the service can cover assistance with the major steps involved in establishing the proposed office in India.

Initial Requirement Assessment

The proposed business activities, foreign entity details and purpose of establishing the Indian office are reviewed to understand whether a branch office or liaison office is more appropriate.

Documentation Support

The required corporate, financial and identification documents are identified and organised according to the applicable filing requirements.

Application and Filing Assistance

The application and related documentation can be prepared and supported for submission through the applicable regulatory and statutory channels. RBI's framework has historically provided for applications for branch and liaison offices through an Authorised Dealer Category-I bank, with the applicable route depending on the circumstances.

Post-Setup Compliance Guidance

Once the office is established, applicable MCA, tax, banking, foreign exchange, and other reporting requirements should be monitored. The exact compliance obligations depend on the nature and activities of the office.

Why Professional Assistance Is Useful

Branch and liaison office setup involves multiple documents, regulatory considerations, and statutory filings. Errors in documentation or selecting an unsuitable structure can create avoidable compliance issues.

Professional assistance can help with:

• Understanding the applicable setup structure
• Preparing and organising documents
• Identifying filing requirements
• Coordinating registration-related formalities
• Understanding post-registration compliance
• Keeping the process aligned with the applicable regulations

The objective is to make the setup process more organised while ensuring that the proposed office operates within the permissions and conditions applicable to it.

Get Assistance to Set Up a Branch or Liaison Office

If your foreign company is planning to establish a presence in India, it is important to evaluate the proposed activities and regulatory requirements before starting the setup process. My Startup Solution can assist with the documentation and registration-related requirements for setting up a branch or liaison office in India.

The appropriate structure, approval route, documentation, and ongoing compliance can vary according to the company's circumstances. A proper assessment before filing can help identify the requirements applicable to your proposed Indian operations.