Your parent company is global, your Indian market opportunity is now, and your legal structure needs to match that ambition. A Branch Office under FEMA allows a foreign company to carry out permitted commercial activities in India while maintaining full operational control. Without it, you cannot invoice Indian clients, hold inventory, or sign local contracts in your own name. The Reserve Bank of India regulates every such entity under FEMA 22(R) and the Consolidated FEMA Directions on Establishment of Branch/ Liaison/Project Offices by Foreign Companies. KAMRIT acts as your FEMA filing partner from the initial RBI eligibility check through final intimation to the Registrar of Companies under Companies Act 2013. We prepare the entire AD Category-I bank submission, handle RBI correspondence, and deliver you a functional Branch Office certificate so your Indian operations start compliant and on schedule.
What is Branch Office Setup in India 2026?
A Branch Office of a Foreign Company is a place of business established in India by a foreign entity, treated as a separate place of business under the Companies Act 2013 and regulated by FEMA 22(R). Unlike a Liaison Office which can only conduct liaison and representation, a Branch Office may carry out actual commercial operations including import, export, and service activities that are expressly permitted under the Foreign Exchange Management (Establishment in India of Branch, Office or Other Place of Business) Rules, 2000. The RBI acts as the primary regulator, with AD Category-I banks serving as the processing interface. A Branch Office must maintain its accounts, file annual returns with the RBI, and comply with Indian tax law including Income Tax Act 1961 provisions on transfer pricing under sections 92 to 92F. It is not a separate legal entity from the parent, which means the foreign parent has unlimited liability for Branch Office obligations.
Who needs this
Not every foreign company qualifies for a Branch Office in India. RBI sets net worth, activity, and sector-specific gates that your company must clear before the filing is even lodged.
- Net worth criterion: The foreign company's latest audited balance sheet must show net worth of USD 100,000 or more in the home country currency equivalent
- Activity sector gate: The proposed Indian Branch Office activities must fall within FEMA-permitted categories, typically trading, manufacturing, or service activities already undertaken by the parent
- No sector prohibition: RBI has prohibited Branch Office status for entities in defence, telecom, and agricultural sectors under FEMA 22(R) Schedule I unless separate government approval is obtained
- Two-year track record: The parent foreign company must have been in operation for at least two years in its country of incorporation
- Profitable last-year requirement: The latest audited financial statement must show profitability in at least one of the two preceding financial years
- RBI approval for restricted sectors: Entities in information technology, banking services, or financial services may require additional sectoral regulator clearance before RBI will consider the Branch Office application
- AD-I bank nomination: You must nominate an AD Category-I bank in India as the sponsor bank before filing, as RBI processes all applications through this channel
- Indian employee threshold: No specific RBI mandate exists, but compliance with the Shops and Establishments Act of the relevant state applies from day one of operations
Documents required
RBI evaluates your Branch Office application entirely on paper before the AD-I bank recommendation is submitted. Missing documents or outdated certifications delay the process by 4 to 8 weeks.
- Certificate of Incorporation: Attested by the Indian Embassy or Apostille under Hague Convention if the home country is a signatory, with certified Hindi or English translation
- Latest Audited Financial Statements: Both parent company balance sheet and profit-and-loss account for the most recent two financial years, stamped and certified by a chartered accountant in the home country
- Board Resolution: Duly notarised resolution authorising the establishment of the Branch Office in India, naming the authorised Indian representative and their powers
- Power of Attorney in favour of Indian Representative: Apostille-notarised POA granted to a person resident in India to act on behalf of the Branch Office for RBI and MCA filings
- Bank Letter of Comfort: A letter from the AD Category-I bank confirming the foreign company's banking relationship and intent to sponsor the RBI application
- FEMA Application Form (FCN-RBI): Form FC-RBI along with the specific Branch Office intimation format prescribed under FEMA 22(R)
- KYC of the Parent Entity: Proof of identity and address of directors, certified by Indian Embassy, including DIN or equivalent foreign director identification
- Proof of Indian Premises: Registered lease agreement or ownership proof of the proposed Branch Office premises, with NOC from landlord if leased
- Proposed Activity Description: A detailed note on the activities to be carried out by the Branch Office in India, cross-referenced to FEMA-permitted categories
- Compliance Undertaking: An undertaking from the Branch Office that it will not engage in retail trading or other prohibited activities under FEMA 22(R)
How KAMRIT runs it, step by step
KAMRIT manages the RBI Branch Office filing as a single integrated workflow from your first document upload through the final ROC intimation filing under Companies Act 2013.
- Eligibility Pre-Check and Engagement Letter. KAMRIT reviews your parent company financials, proposed Indian activities, and sector classification against FEMA 22(R) Schedule I and II restrictions. This 3-day pre-check confirms whether RBI approval is required or whether the activity qualifies for automatic approval. We issue an engagement letter confirming scope, government fee estimates, and our delivery guarantee.
- Document Collection and Legal Attestation. We raise a document checklist specific to your home country jurisdiction. All foreign-origin documents require either Indian Embassy attestation or Apostille certification. KAMRIT coordinates translation through empanelled translators. This stage runs 10 to 15 working days depending on your parent jurisdiction.
- AD Category-I Bank Nomination and Application Drafting. We assist in nominating and opening an AD Category-I bank account, which becomes the RBI filing channel. KAMRIT drafts the complete FEMA application including Form FC-RBI, the activity description, and the compliance undertaking. The draft is shared with you for a two-day review and sign-off.
- AD-I Bank Submission and RBI Processing. The completed application is submitted to the AD Category-I bank for their endorsement and forwarding to the RBI. RBI processing for Branch Office approvals under FEMA 22(R) runs 4 to 6 weeks from the date the AD-I bank forwards the file to RBI, Mumbai.
- RBI Approval Intimation and PAN/TAN Application. Once RBI approves the application, an approval intimation letter is issued specifying permitted activities and reporting obligations. Simultaneously, KAMRIT applies for a Permanent Account Number (PAN) for the Branch Office under the Income Tax Act 1961 and a Tax Deduction Account Number (TAN) under section 203A of the IT Act.
- Companies Act 2013 ROC Intimation. Within 30 days of opening the Branch Office in India, you must file Form FC-3 with the Registrar of Companies under the Companies (Registration of Foreign Companies) Rules, 2014. KAMRIT prepares and files this along with the certified translation of the charter documents.
- GST Registration and State Compliance. If the Branch Office turnover is expected to exceed the GST threshold of Rs 20 lakh (Rs 10 lakh for special category states) under Section 22 of the CGST Act, 2017, KAMRIT files the GST registration application on the GST portal. We also register under the relevant state Shops and Establishments Act.
Timeline
The full RBI Branch Office approval cycle runs 6 to 10 weeks from AD-I bank submission, assuming all documents are clean and no RBI query arises. KAMRIT controls document preparation timelines of 10 to 20 working days on our end, which means end-to-end from your engagement letter to a functional Branch Office with PAN, TAN, and GST registration in hand typically spans 10 to 14 weeks. RBI queries, if raised, typically add 3 to 4 weeks to the RBI processing window. Government holidays in India, the parent country, and RBI Mumbai working-day calendars all affect the final delivery date. KAMRIT provides a Gantt-style tracker with milestone dates updated daily so you can plan your Indian payroll and lease commencement with confidence.
How our pricing compares
KAMRIT's Branch Office Setup service starts at Rs 74,899 as an all-inclusive engagement fee covering document review, AD-I bank coordination, RBI application drafting, and ROC intimation filing. IndiaFilings prices similar FEMA Branch Office services at Rs 85,000 to Rs 1,25,000 depending on urgency. Vakilsearch quotes Rs 79,999 for the base service plus Rs 15,000 to Rs 25,000 per government fee disbursement. ClearTax charges Rs 65,000 to Rs 95,000 for Branch Office filings but bundles the RBI and GST work into separate product lines, meaning your total cost could reach Rs 1,40,000 if you need both services from the same vendor. LegalRaasta offers Branch Office preparation starting at Rs 49,999 but limits the scope to application drafting only, excluding AD-I bank liaison and ROC filings. Our Rs 74,899 fee includes the PAN and TAN application which others treat as add-ons, and our dedicated FEMA specialist manages the entire engagement. Government fees including RBI processing charges (approximately Rs 6,500), MCA filing fees, and stamp duty are billed separately at actuals.
Common mistakes KAMRIT avoids
First-time applicants for Branch Office approvals routinely encounter RBI rejections due to document errors that are entirely preventable with professional preparation.
- Filing with unaudited financials: RBI requires audited financials for both the preceding two years. Management accounts or provisional figures are rejected outright
- Wrong activity description: Stating that the Branch Office will engage in 'retail trading' triggers an automatic RBI rejection as this is prohibited under FEMA 22(R)
- Lease agreement without landlord PAN: The RBI expects a valid lease with the landlord's PAN details and a clear NOC for the specific duration of the Branch Office
- Power of Attorney without apostille: A POA executed in the UK, USA, or Germany without Apostille certification is not accepted by Indian regulators
- Missing FEMA annual return filing: Post-approval, RBI requires an annual FC-GPR filing every April. Failure to file results in compounding fees of Rs 2 lakh or more
- Assuming automatic approval for IT sector: Information technology companies often assume their activity is automatically permitted, but IT hardware trading or software services with revenue recognition require separate sectoral clarity
- Not registering under Companies Act 2013 timely: The 30-day ROC filing window for Form FC-3 starts from the date of opening the Branch Office, not the RBI approval date. Missing this window attracts late filing penalties under section 450 of the Companies Act 2013
- Neglecting Indian GST for services rendered: If the Branch Office invoices Indian clients for services, GST applies even on the first rupee of revenue if the activity qualifies as an inter-state supply under section 7 of the IGST Act, 2017