Branch Office

A branch office may be considered by a foreign company that wants a direct presence in India while continuing to operate as an extension of the foreign parent. Unlike a subsidiary, a branch office is not a separate Indian company owned by the foreign parent. It is connected to the foreign entity and is generally permitted to undertake only specified activities under the applicable framework.

This structure may be relevant where the foreign company wants to conduct permitted business activities in India without creating a full subsidiary. However, the branch office route requires careful review because the scope of activity, tax treatment, reporting expectations, and connection with the foreign parent are materially different from those of a subsidiary.

Who is this for?

• Foreign companies wanting a direct, parent-linked India presence
• Businesses with defined, permitted activities rather than broad operations
• Groups comparing branch, subsidiary, liaison, and project routes

What it involves

A branch office may be appropriate for certain commercial purposes, but it is not a universal entry solution. The foreign company must examine whether its intended India activity is permitted through a branch office, whether it requires local operational flexibility, whether it plans to hire employees, whether it will enter Indian contracts, and whether a subsidiary may provide a better long-term platform.

Eraqus Advisors helps foreign companies assess the suitability of a branch office in relation to their business model, the regulatory route, documentation expectations, parent company requirements, authorised representative details, financial background, tax considerations, ongoing reporting, and eventual closure or restructuring possibilities.

Key considerations

• Whether your intended activity is permitted through a branch office
• Different tax treatment and reporting compared to a subsidiary
• Parent company financial background and documentation
• Authorised representative in India and ongoing reporting
• Comparison with subsidiary, liaison, and project office routes

Ongoing compliance

A branch office can be useful where the purpose is clear and the permitted activity aligns with the parent company's India plan. It should be selected only after comparing it with a subsidiary, liaison office, project office, or joint venture.