How to Open a Branch Office or Subsidiary in India – Legal Procedure, Taxation & Compliance 

India offers immense opportunities for foreign corporations aiming to expand into a rapidly growing market. Whether you’re exploring market entry through a branch office or a wholly-owned subsidiary, understanding the legal setup, compliance requirements, and tax implications is essential. 

At Jain Prachi & Company, we specialize in assisting international companies in establishing and operating their presence in India efficiently and in full compliance with Indian laws. 

Branch Office vs Subsidiary: Which is Right for You? 

Branch Office (BO) 

A Branch Office represents the parent company and is allowed to: 

• Export/import goods 

• Provide consultancy services 

• Represent the parent company in India 

Not allowed to undertake manufacturing or retail trading in India directly. 

Wholly-Owned Subsidiary (WOS) 

An Indian private limited company with 100% foreign ownership (subject to FDI regulations). It can: 

• Undertake full-scale commercial operations 

• Enter contracts in its own name 

• Enjoy the same legal status as a domestic company 

Step-by-Step Process for Setting Up a Branch Office 

1. Filing with the Reserve Bank of India (RBI): 

• File Form FNC with RBI through an Authorized Dealer (AD) bank 

• Include incorporation certificate, audited financials, board resolution 

1. Approval from RBI: 

• RBI evaluates the nature of the business, track record, and profitability 

1. Registration with the Registrar of Companies (ROC): 

• File Form FC-1 with ROC under Companies Act, 2013 

1. PAN, TAN, and Bank Account Setup: 

• Obtain tax registrations and open a bank account in India 

Step-by-Step Process for Setting Up a Subsidiary 

1. Name Reservation via RUN (MCA Portal) 

1. Prepare and File SPICe+ Forms (Part A & B) 

• MOA, AOA, passport and proof of address of foreign directors 

1. DIN and DSC for Directors 

1. Incorporation Certificate & Corporate PAN 

1. Open Bank Account & Inject Capital 

1. Post-Incorporation Filings (e.g., INC-20A) 

FDI Guidelines You Must Know 

• Most sectors are under the Automatic Route, where no RBI approval is required 

• Restricted sectors (e.g., defence, telecom) fall under the Government Route 

• Compliance with sectoral caps, ownership restrictions, and pricing guidelines is mandatory 

Taxation Differences: Branch vs Subsidiary 

Key Compliance Requirements 

• Annual filing of audited financials with ROC 

• Income Tax Returns and TDS compliance 

• Filing of FLA return to RBI for foreign liabilities 

• GST registration if turnover exceeds threshold 

• Form FC-GPR/FC-TRS for equity investments and transfer 

How Jain Prachi & Company Supports Global Entities 

We offer a seamless setup and post-setup compliance package including: 

• RBI and ROC filings for branch office approvals 

• Complete incorporation process for subsidiaries 

• FDI compliance and sectoral advice 

• Tax registration and bookkeeping 

• Post-setup advisory on repatriation, GST, and TDS 

Why Global Businesses Prefer Jain Prachi & Company 

• One-stop solution for legal, tax, and regulatory needs 

• Expert team well-versed in FEMA, Companies Act, and Income Tax 

• Customized support based on industry and investment structure 

• Transparent, timely, and professional services 

Establish Your Indian Presence with Confidence 

Whether you’re choosing a branch or subsidiary model, get it done the right way with a trusted partner. 

📧 Email: contactus@jainprachi.com 
🌐 Website: https://jainprachi.com 

FAQs – Opening Branch or Subsidiary in India 

Q: How long does it take to open a subsidiary in India? 
Typically 2–3 weeks, subject to document availability and regulatory approvals. 

Q: Can a foreign company own 100% of an Indian subsidiary? 
Yes, in most sectors under the automatic route. 

Q: Is a branch office taxed higher than a subsidiary? 
Yes, branch offices are taxed at a higher corporate rate and do not enjoy domestic company benefits.