A branch office can be understood as an establishment or corporate structure that carries on significantly the same business and related activities which are carried out by its head office. An organization stretches its business entities by opening up its different branches across distinct regions of the globe. In this way, the business may extend its reach in the domestic country as well as in other foreign nations.
Opening up branch offices in India
These days, foreign companies are continuously opening up their distinct branch offices in India to enlarge their business entities. In foreign nations, companies (other than incorporated in Nepal) are engaged in manufacturing and trading activities to setup their branch offices in India. After getting the required approval from the Reserve Bank of India, they may initiate the process of branch office registration in India. RBI holds the right to initially grant the setup of such offices for a period of 3 years and it can be extended from time to time by the approved dealer in which the jurisdiction of the office comes.
Required eligibility criteria for accomplishing branch office registration in India
Below mentioned eligibility criteria are followed by the RBI during sanctioning liaison offices of foreign corporate entities:
- The foreign organization must have lucrative track record in the last five financial years in its home country.
- The net worth of business should not be smaller amount than USD 100,000 or its equivalent.