Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes after obtaining permission from the RBI:
- Undertaking export or import of goods
- Rendering professional or consultancy services
- Carrying out research work, in which the parent company is engaged (provided that the results of the research work are made available to the Indian Companies)
- Promoting technical or financial collaborations between Indian companies and the parent or overseas group company
- Representing the parent company in India and acting as buying/selling agents in India
- Rendering services in information technology and development of software in India
- Rendering technical support to the products supplied by the parent/ overseas group companies
- Foreign airlines or shipping companies are also permitted to open their branch offices in India.
A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Such offices are a part of the foreign company and are not treated as a separate legal entity. Branch Offices established with the approval of RBI may remit outside India the profits of the branch, net of applicable Indian taxes and subject to RBI guidelines.