Open a Branch Office in India from Australia

How to Register a Branch Office in India from Australia

A Branch Office is one of the most straightforward ways for an established Australian company to operate in India without incorporating a separate legal entity. Unlike a Wholly Owned Subsidiary or Private Limited Company, a Branch Office functions as an extension of the parent company, carrying the same name and identity. It can engage in commercial activities permitted by the Reserve Bank of India (RBI), generate revenue, and repatriate profits to Australia.

The India-Australia ECTA trade agreement (in force since December 2022) and strong bilateral investment ties make India an attractive expansion destination for Australian companies. Cumulative Australian FDI into India stands at US$1.52 billion (April 2000 to March 2025), and bilateral trade reached US$24.1 billion in FY 2024-25. For Australian companies that want to test the Indian market, fulfil export-import contracts, or provide professional services without the full governance requirements of a subsidiary, a Branch Office is often the ideal structure. For a detailed comparison, see Branch Office vs Subsidiary and Branch Office vs Liaison Office.

FDI Route and Regulatory Requirements

The establishment of a Branch Office in India by an Australian company follows the automatic route through the Authorised Dealer (AD) bank, provided the parent company operates in a sector where 100% FDI is permitted. The AD bank is authorised by the RBI to approve Branch Office applications and generate a Unique Identification Number (UIN) for the office.

Eligibility Requirements

The Australian parent company must meet the following criteria:

• Profit track record: A demonstrated track record of profitability for the five years immediately preceding the date of application
• Minimum net worth: A net worth of at least US$100,000 as verified by the most recent audited balance sheet
• Sector eligibility: The proposed activity must fall within a sector permitting 100% FDI under the automatic route

Since Australia does not share a land border with India, Press Note 3 (2020) restrictions do not apply. Australian companies can proceed without the additional security clearances that apply to investors from China, Pakistan, Bangladesh, and neighbouring countries. For more on the regulatory framework, see Automatic Route vs Government Approval.

Permitted Activities

A Branch Office in India can undertake only the following activities approved by the RBI:

• Export and import of goods
• Rendering professional or consultancy services
• Carrying out research work in areas where the parent company is engaged
• Promoting technical or financial collaborations between Indian companies and the parent company
• Representing the parent company in India and acting as a buying or selling agent
• Rendering services in information technology and software development
• Providing technical support to products supplied by the parent company

Prohibited Activities

A Branch Office cannot engage in manufacturing, processing, or retail trading activities in India, unless it is located within a Special Economic Zone (SEZ). This is a critical distinction from a subsidiary, which can undertake any lawful business. For comparison, see Liaison Office vs Project Office vs Branch Office.

DTAA Benefits for Australian Companies

The Double Taxation Avoidance Agreement between India and Australia, in force since 30 December 1991, is particularly relevant for Branch Offices because a Branch Office constitutes a Permanent Establishment (PE) of the foreign company in India. This means income attributable to the Branch Office is taxable in India, but the DTAA prevents double taxation:

• Business profits: Taxable in India only to the extent attributable to the PE (Article 7)
• Interest: Capped at 15% withholding tax in the source country (Article 11), with 10% for financial institutions
• Royalties and fees for technical services: Capped at 10-15% (Article 12)
• Capital gains: Governed by residency-based provisions with specific rules for immovable property

Australian companies can claim foreign tax credits in Australia for taxes paid by the Branch Office in India. The Branch Office is taxed as a foreign company in India at 35% corporate tax (plus surcharge and cess, effective rate approximately 38.22%). To claim DTAA benefits, obtain a Tax Residency Certificate from the Australian Taxation Office and file Form 10F in India. See our DTAA Master Guide for detailed guidance.

Document Requirements and Authentication

Both India and Australia are signatories to the Hague Convention (Apostille Convention). Australian documents require an apostille from the Department of Foreign Affairs and Trade (DFAT) through Australian Passport Offices, rather than the lengthier embassy attestation process. For details, see Apostille vs Embassy Attestation.

Documents Required from the Australian Parent Company

• Certificate of Incorporation of the parent company (apostilled)
• Memorandum and Articles of Association / Charter Document (apostilled, English version)
• Audited financial statements for the last five years (apostilled)
• Latest audited balance sheet and annual accounts (apostilled)
• Board resolution authorising the establishment of a Branch Office in India
• Power of Attorney in favour of the authorised representative in India (apostilled)
• Letter from the principal officer of the parent company to the RBI
• Details of the parent company's activities and proposed activities in India

Documents Prepared in India

• Application in Form FNC-1 to the AD bank
• Proof of registered office address (rent agreement + NOC from landlord + utility bill)
• Digital Signature Certificate (DSC) for the authorised representative
• Form FC-1 for ROC registration (filed within 30 days of RBI approval)

Step-by-Step Registration Process

Establishing a Branch Office in India involves a two-stage process: RBI approval through the AD bank followed by registration with the Registrar of Companies (ROC).

Step 1: Prepare and Apostille Documents in Australia

Gather all required corporate documents from the Australian parent company. Have them notarised by an Australian notary public and then apostilled by DFAT. Timeline: 1-3 weeks.

Step 2: Submit Application to AD Bank (Form FNC-1)

File Form FNC-1 along with all supporting documents with an Authorised Dealer Category-I bank in India. The AD bank reviews the application for completeness and sector eligibility. If the sector permits 100% FDI under the automatic route, the AD bank can approve the application and generate a Unique Identification Number (UIN) for the Branch Office.

Step 3: Receive RBI Approval and UIN

The AD bank processes the application and issues the approval along with the UIN. For applications in sectors not fully under the automatic route, the AD bank forwards the application to the RBI for specific approval. Timeline: 4-8 weeks.

Step 4: Register with the Registrar of Companies (ROC)

Within 30 days of receiving RBI approval, file Form FC-1 with the ROC to register the Branch Office under the Companies Act 2013. Pay the prescribed government fee of INR 6,000. The ROC issues a registration certificate confirming the Branch Office's legal existence in India. See our guide on FC-1 Foreign Company Registration.

Step 5: Obtain PAN and TAN

Apply for a Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) for the Branch Office. These are required for tax filings, TDS compliance, and opening a bank account.

Step 6: Open a Bank Account

Open a current account with the AD bank in India. The Australian parent company can remit initial operating funds to this account. The bank will conduct thorough KYC checks including verification of the entire ownership chain and beneficial ownership disclosures.

Timeline and Costs

The end-to-end timeline for establishing a Branch Office in India from Australia is approximately 10-16 weeks:

Cost Breakdown

• ROC fees (Form FC-1): INR 6,000
• Government fees (PAN/TAN): INR 1,000-2,000
• Stamp duty: INR 5,000-15,000 (varies by state)
• Professional fees (CS/CA): INR 50,000-1,50,000 (includes RBI application preparation)
• Apostille charges in Australia: AUD 85-130 per document
• Total estimated cost: INR 75,000-2,00,000 plus apostille costs

Post-Registration Compliance

Branch Offices in India carry significant ongoing compliance obligations:

• Annual Activity Certificate (AAC): Filed annually with the AD bank and Director General of Income Tax (International Taxation) by 30 September, prepared by a Chartered Accountant, confirming the Branch Office operates within its permitted activities
• Income tax return: Filed annually as a foreign company; Branch Offices are taxed at 35% on income attributable to Indian operations (plus surcharge and cess)
• GST compliance: Monthly or quarterly GST returns if the Branch Office is GST-registered
• Transfer pricing: Mandatory compliance with transfer pricing regulations for all transactions between the Branch Office and its parent company or affiliates, including Form 15CA/15CB for outward remittances
• ROC annual filings: Annual financial statements filed with the ROC
• Audit: Mandatory annual audit by a practising Chartered Accountant in India

Beacon Filing provides comprehensive annual compliance, FEMA/RBI compliance, and corporate tax filing services for Branch Offices.

Common Challenges for Australian Companies

Five-Year Profit Track Record

The RBI requires the Australian parent company to demonstrate profitability for the five consecutive years immediately preceding the application. Startups and early-stage companies that have not yet achieved five years of profitability cannot establish a Branch Office. In such cases, a Liaison Office (which has no profit requirement but cannot earn revenue) or a Private Limited Company may be more appropriate. See Branch Office vs Liaison Office for guidance.

Manufacturing Restriction

Branch Offices cannot engage in manufacturing or processing activities in India (except within SEZs). Australian manufacturing companies looking to set up production in India must establish a subsidiary or joint venture instead. However, a Branch Office can sub-contract manufacturing to Indian companies while handling sales and distribution. For structuring options, see Contract Manufacturing vs Own Factory.

Higher Corporate Tax Rate

Branch Offices are taxed as foreign companies at 35% (effective rate approximately 38.22%), significantly higher than the 22-25.17% effective rate for domestic companies or the 17.16% rate for new manufacturing companies. This tax disadvantage should be factored into the cost-benefit analysis when choosing between a Branch Office and a subsidiary. Refer to our Corporate Tax: India vs Global comparison.

Permanent Establishment Implications

A Branch Office automatically constitutes a PE under both Indian domestic law and the India-Australia DTAA. This means all income attributable to the Branch Office's activities in India is subject to Indian taxation. Australian companies must carefully delineate the scope of the Branch Office's activities to avoid attributing more income than necessary to the Indian PE.

Profit Remittance Documentation

While Branch Offices can freely repatriate profits to Australia, the remittance requires a Chartered Accountant's certificate confirming tax compliance, an auditor's certification, and regulatory approvals. The process is straightforward but documentation-intensive, typically requiring 2-4 weeks per remittance cycle. Ensure compliance with FEMA regulations and the Repatriation Guide.

Frequently Asked Questions

Can an Australian company open a Branch Office in India without visiting India?

The application process (Form FNC-1) can be initiated remotely through the AD bank using apostilled documents and a Power of Attorney in favour of an Indian representative. However, some AD banks may require an in-person meeting or video KYC with the authorised signatory for the bank account opening. The RBI approval process itself is entirely document-based.

What is the minimum net worth required for the Australian parent company?

The Australian parent company must have a minimum net worth of US$100,000 as verified by the most recent audited balance sheet. Additionally, the company must demonstrate a profit track record for the five years immediately preceding the application.

Can a Branch Office in India engage in manufacturing?

No. Branch Offices are prohibited from manufacturing, processing, and retail trading activities in India, unless located within a Special Economic Zone. Manufacturing companies should consider establishing a Private Limited Company or Wholly Owned Subsidiary instead.

How is a Branch Office taxed in India?

A Branch Office is taxed as a foreign company at a flat rate of 35% on income attributable to its Indian operations, plus applicable surcharge (2% if income exceeds INR 1 crore, 5% if income exceeds INR 10 crore) and 4% health and education cess. The effective tax rate is approximately 37.13% to 38.22%. The India-Australia DTAA allows Australian companies to claim foreign tax credits in Australia for taxes paid in India.

Can a Branch Office be converted into a subsidiary later?

Yes, but the process requires closing the Branch Office and separately incorporating a new entity (Private Limited Company or WOS). This involves RBI approval for closure, ROC de-registration, settlement of all tax liabilities, and fresh incorporation of the new entity. Plan for 4-6 months for the entire conversion. See our guide on Converting Branch to Subsidiary.

How long does the RBI approval take for an Australian Branch Office application?

Under the automatic route (100% FDI sectors), the AD bank can process and approve applications within 4-8 weeks. If the sector requires specific RBI approval, the timeline extends to 8-12 weeks. Document completeness is the primary factor affecting processing time.

Does a Branch Office need to file GST returns?

If the Branch Office provides taxable services or its aggregate turnover exceeds INR 20 lakh (INR 10 lakh for special category states), it must register for GST and file monthly or quarterly returns. Most Branch Offices providing professional services in India will need GST registration.