Things you Need to Know About Opening a Branch Office in India
Expanding and Penetrating in the New High-Potential Markets
When a company decides to explore foreign markets in the developing countries, it does so to target and acquire a larger number of customers or consumer-base than they would normally in their home country. For doing this task of expansion and introduction in India, companies first prefer opening a branch office in India to acquire these customers. As a provider of business setup services in India, we are going to provide you with detailed information about the things and steps that a company or entrepreneur outside of India must know when opening a branch office in India. In this article, we are also going to tell you the steps that one must take to open a branch office in India without any hassle and without wasting any time.
Some Benefits of Opening Branch Office in India
Before delving deep into the topic, let us have a glance at the advantage that opening a branch office in India provides when one thinks to open franchise in India. A branch office provides you with many more advantages with respect to promotion and expansion than Liaison Office. The LO (Liaison Office) does the task of only liaisoning that is mediating the communication between the parent office and the client in the remote location. LO has certain limitation in carrying out advanced activities in India. On the other hand, a branch office can not only do the things that are done by a Liaison Office but also a lot of other things such as operating on its own, earn profits, and more importantly do the task of representing the parent company in that target foreign country as well.
The Outline Procedure for Opening a Branch Office in India
Now once you have understood the advantage of opening a branch office in India when you plan to open a Firm in India rather than a Liaison Office, let us see the procedure that you need to follow while opening a branch office in India as a foreign national and a foreign company.
Once you have decided to open a Firm in India as a branch office, the main authorities that are related directly are the ROC and the RBI. The ROC is the Registrar of Companies body and RBI is the Reserve Bank of India. Both of these bodies are directly associated with the whole registration process of any company that is looking forward to opening branch office in India for either manufacturing purposes or to perform trading activities in India.
Step 1 – An Important One
The first step that one needs to make while opening a branch office in India is to make sure that they comply with the Foreign Exchange Management Act as well as the New Companies Act for making sure to have the approval of the Reserve Bank of India. You should also know that the amount of time that is required for registering through these is around 2 to 4 weeks only and all of this isn’t a long process.
For getting this permission while opening a branch office in India, you need permission from the Chief General Manager of the Exchange Control Department. For the same, you need to make the request by filling the form FNC-1 and submitting it to the RBI’s central office. The documents that you will need while submitting this will be the same as you would need for a Liaison Office.
- 2 Copies of Certificate of Incorporation / Registration
- 2 Copies of Memorandum & Articles of Association
- Latest 3 years Audited Balance Sheet,
- Details of Last Three Years Import Into / Export From India,
- Existing arrangements, if any,
- Details of existing Indian Clients, if any,
- Details of activities to be undertaken in India,
- Activities to be undertaken in India,
- Details of products/services to be rendered in India.
The Next Steps
The next step is gathering up all of the documents that are required by the Registrar of Offices in that particular state where you plan on opening a branch office in India. The documents that you will require for this will be same as you would need if you plan to open a franchise in India as a private limited Firm. These documents are Signed Digital Signature Form, 2 copies of Bank Manager or Post Master Attested, Self-Attested PAN Card, Post Master Attested AND Self Attested ID Proof, Post Master Attested AND Self Attested Address Proof, Passport size photo. For the residence proof you need a Scanned Copy of Lease Deed/Rent Agreement, Scanned copy of any one of the Latest Electricity Bill/Telephone Bill/Gas Bill, Self-attested Signature Proof of the Owner, Scanned Form INC-9, Scanned Copy of Form DIR-2. You should note that these forms surely appear to be complex but the format of the same will be emailed to you and hence the whole process will become very easy if you work with a business setup services provider in India like us, DBPL (www.dbpl.asia).