Branch Office

A branch office mirrors the function of a parent company. The offices are established to perform similar business operations as the foreign parent company at different locations in India. Branch offices can carry on substantially the same business as the parent company. They can carry out all the trading activities that a parent company does. The major restriction being carrying out manufacturing activities although the same can be subcontracted to Indian Manufacturers

The branch office can undertake only the following activities in India:

i. Export/import of goods.

ii. Rendering professional or consultancy services.

iii. Carrying out research work in which the parent company is engaged.

iv. Promoting technical or financial collaborations between Indian companies and parent or overseas group company.

v. Representing the parent company in India and acting as buying/ selling agent in India.

vi. Rendering services in Information Technology and development of software in India.

vii. Rendering technical support to the products supplied by parent/group companies.

viii. Representing a foreign airline/shipping company.

Advantages of opening a branch office:

• Greater Level of Control.
• Cost Effective Locations.
• Expanding Business Recognition.
• Access to a New Market.
• Tax benefits.

Disadvantages of opening a branch office:

• The parent company is fully liable for the liabilities of the branch.
• The branches representatives may be held jointly and severally liable for tax debts.
• The financial statements of the parent must normally be filed at the Companies Registry