# Branch Office & Project Office Registration

> A foreign company can open a branch office in India for permitted activities such as exporting and importing, professional and consultancy services, research, and acting as buying or selling agent — but not manufacturing or retail trading. It needs a five-year profit track record and net worth of at least USD 100,000. A project office is set up only to execute a specific contract in India. Branch profits are taxed at the foreign-company rate of 35% plus surcharge and cess.

Practice: Business Setup & Entity Registration — https://www.industax.com/services/business-setup/

A branch office (BO) is the foreign company itself operating in India, so its income is taxed here as that of a foreign company and its liabilities are the parent's. It is approved through an AD Category-I bank in Form FNC; sectors where FDI isn't fully under the automatic route, or applicants from land-border countries, need prior approval.

A project office (PO) is narrower: it can be opened without prior RBI approval if the foreign company has secured a contract from an Indian company to execute a project in India and the project is funded as the regulations require. It closes when the project ends, and surplus can be repatriated after audit.

## Key facts

| Item | Detail |
| --- | --- |
| Branch eligibility | Profits in the last 5 years; net worth ≥ USD 100,000 |
| Not permitted for BO | Manufacturing and retail trading |
| Tax on branch profits | 35% plus surcharge and cess (foreign company rate) |
| Project office | For a specific contract awarded in India |
| ROC | Form FC-1 within 30 days; FC-3 annual accounts |

## Who needs this

- Foreign consulting and engineering firms with Indian contracts
- Overseas companies exporting from or importing into India
- Contractors executing infrastructure or EPC projects

## What's included

- Choice between BO, PO and subsidiary
- Form FNC application or project office intimation
- FC-1, PAN, TAN and GST registration
- Tax, transfer pricing and repatriation planning

## Documents

- Parent's constitutional documents and 5 years' audited accounts (apostilled)
- Contract award letter (for a project office)
- Board resolution for opening the office
- Details of the authorised representative in India

## Process

1. **Structure** — Office type selected for the activity.
2. **Approve** — FNC filed through the AD bank or PO intimation given.
3. **Comply** — ROC, tax and annual activity reporting.

## Also covers

- **Project office** — Office for executing a specific Indian contract.
- **Branch office in SEZ** — Branches set up in Special Economic Zones.

## FAQs

### Can a branch office manufacture in India?

No. Manufacturing is not a permitted branch activity, though a branch in a Special Economic Zone may undertake manufacturing and services under specific conditions. Foreign companies that want to manufacture usually set up a subsidiary.

### How is a branch office taxed?

As a foreign company — currently 35% plus surcharge and cess on its Indian profits — which is higher than the roughly 25% a domestic subsidiary can pay. That gap is a common reason to choose a subsidiary instead.

### Can a project office remit its surplus abroad?

Yes. On completion of the project, or at intervals during it, the project office can remit surplus after paying applicable taxes and on producing an auditor's certificate to the AD bank.

## Official sources

- Reserve Bank of India — FEMA notifications: https://www.rbi.org.in/Scripts/Fema.aspx
- Ministry of Corporate Affairs — MCA21 portal: https://www.mca.gov.in/
- Income Tax e-Filing portal: https://www.incometax.gov.in/

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This is general information, not advice for your specific facts.