Permission to set up a branch office in India is granted by the Reserve Bank of India. A Branch office of a foreign company upon approval from the RBI must be effectively registered under the (Indian) Companies Act, 1956. Under the Company Act, 1956 the branch office can carry on its business activities in the same way as a domestic company. Unlike a liaison office a branch office can generate revenue from the sales in the local market and send back the profits to the foreign parent company.
A branch office so approved and registered can carry on the following activities:-
- Export/Import of goods.
- Consultancy services.
- Carrying out research work, in which the parent company is occupied.
- Promoting financial collaborations between Indian companies and parent Group Company.
- Representing the parent company in India and acting as selling/ buying agents in India.
- Rendering services in development of software and Information Technology in India.
- Rendering technical support to the products supplied by the group companies.
- Shipping Company/ Foreign airline.
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