Guide to Setting up Branch Office in India by Foreign National

CA Pankaj Panchal

Procedure of incorporation of Branch Office in Delhi as follows

1) Form FNC in 3 Copies with following documents

a) Two copies of the Certificate of Incorporation / Registration, Memorandum & Articles of Association of parent company duly attested by the Notary Public in the country of registration [If the original Certificate is in a language other than in English, the same may be translated into English and notarized as above and cross verified/attested by the Indian Embassy/ Consulate in the home country].

b) Latest Audited Balance sheet of the applicant company of past three years. [If the applicants’ home country laws/regulations do not insist on auditing of accounts, an Account Statement certified by a Certified Public Accountant (CPA) or any Registered Accounts Practitioner by any name, clearly showing the net worth may be submitted].

c) Bankers details of parent company with bank account number.

d) Bankers’ Report from the applicant’s banker in the host country / country of registration showing the number of years the applicant has had banking relations with that bank.

e) Letter from principal officer of the Parent Company to RBI.

f) Letter of authority from parent company to local representative.

g) Resolution from parent company for setting up branch office in India.

h) Comfort letter from parent company intending to support operation in India. i) Complete Know your Customer (KYC) of shareholders holding more than 10% Equity.

2) A profit making track record during the immediately preceding five financial years in the home country certified by Certified Public Accountant (CPA) or any Registered Accounts Practitioner by any name .

3) Net Worth [total of paid-up capital and free reserves, less intangible assets as per the latest Audited Balance Sheet or Account Statement certified by a Certified Public Accountant or any Registered Accounts Practitioner by whatever name] should not be less than USD 1 00,000or its equivalent.

4) Three passport size photo & Identity proof (Passport Mandatory) and Address proof of all Directors and of the Applicant making application in India certified by Banker in Home [If the original Certificate is in a language other than in English, the same may be translated into English and notarized as above and cross verified/attested by the Indian Embassy/ Consulate in the home country].

5) Name, Address, Phone Number and Email of authorised person.

6) Expecting funding level for Operation in India.

7) List of Directors and secretary of the Company.

8) Details of Activity carried out in Home Country by the applicant company with brief about product and services of the company.

9) Details of Shareholders holding more than 10% of Equity with shareholding pattern.

10) Power of Attorney and board resolution in favor of authorized representative.

11) 3 Passport size photo, Identity proof (PAN Card mandatory) and address proof (Telephone, Electricity bill not older than two months) of authorized representative.

12) Following permitted activities can be under taken by Companies engaged in manufacturing or trading activities :

a) Export / 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 / 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) Foreign airline / shipping company.

13) Digital Signature of Authorised Representative

14) After incorporation of branch office, following requirement are also necessary in India

a) VAT Registration in the state of registered office.

b) PAN Number

c) TDS Number if required

d) Service Tax Registration Number

e) Import Export Code registration.

f) Annual Compliance with RBI under Foreign Exchange Management Act, 1999 on or before 30^thSeptember or within six month from end of financial year in Form AAC.

g) Audited books of accounts prepared under Schedule III of Companies Act, 2013 with annual return to be submitted in Form FC-4 and FC-3 with in sixty day from last day of financial year, duly audited by practicing Chartered Account or Firm or LLP in India under Companies Act, 2013.

Approximately time taken to complete all process shall be 3 months.

(Author can be reached at cadakshpanchal@gmail.com)