Set Up a Branch Office in India from France

How to Set Up a Branch Office in India from France

France is the 11th-largest source of FDI into India, with cumulative equity inflows of approximately USD 11.75 billion from April 2000 to March 2025. Over 1,000 French establishments already operate in India across sectors ranging from aerospace and defence to luxury goods, automotive, and professional services. Bilateral trade reached USD 15.21 billion in FY 2024-25, and more than 150 Indian companies maintain operations in France.

For French multinational corporations, trading companies, and professional services firms seeking an Indian operational presence without incorporating a separate legal entity, a Branch Office provides an efficient entry point. A Branch Office functions as an extension of the French parent company — it is not a separate legal entity under Indian law. This makes it ideal for French companies that wish to represent the parent in India, manage import-export activities, render consultancy services, or provide technical support for products supplied by the parent.

Unlike a Private Limited Company or LLP, a Branch Office requires prior approval from the Reserve Bank of India (RBI) through an Authorised Dealer (AD) Category-I bank. The key advantage is that profits earned by the branch are freely remittable to France after payment of applicable Indian taxes, and the recently amended India-France DTAA (February 2026) provides improved tax treatment for cross-border income flows.

FDI Route and Regulatory Requirements

Establishing a Branch Office in India is governed by the Foreign Exchange Management Act (FEMA) and the Reserve Bank of India's regulations. Unlike FDI in companies or LLPs which can use the automatic route, a Branch Office requires RBI approval through an AD Category-I bank.

RBI Approval via Form FNC

The French parent company must submit an application in Form FNC to a designated AD Category-I bank in India. The AD bank conducts KYC verification, checks the application for completeness, and forwards it to the RBI for allotment of a Unique Identification Number (UIN). The RBI evaluates the application based on the parent company's track record, financial strength, and the proposed activities.

Eligibility Criteria for French Companies

• The French parent company must have a profit-making track record for 5 immediately preceding years (note: the 2025 RBI Draft Regulations propose removing this requirement)
• Net worth of the parent company should be adequate to support the Indian branch operations
• Proposed activities must fall within the permitted activities list defined by the RBI
• The parent must not be engaged in activities prohibited for FDI in India

Permitted Activities for Branch Offices

A Branch Office in India can carry out the following activities:

• Export and import of goods
• Rendering professional or consultancy services (conseil)
• Carrying out research work in areas relevant to the parent company
• Promoting technical or financial collaborations between Indian companies and the parent/overseas group companies
• Representing the parent company in India and acting as buying/selling agent
• Rendering services in information technology and software development
• Providing technical support for products supplied by the parent company
• Rendering services to Indian companies in any other field approved by the RBI on a case-by-case basis

Restricted Activities

A Branch Office cannot directly carry out manufacturing activities. Manufacturing can be sub-contracted to an Indian manufacturer while the branch provides technical supervision. Retail trading, legal practice (for law firms), and ordinary commercial activities beyond the permitted list are restricted. French companies requiring manufacturing capabilities should consider a Wholly Owned Subsidiary or Private Limited Company.

Press Note 3 Exemption

French companies are not subject to Press Note 3 restrictions. These additional security screening requirements by the Ministry of Home Affairs apply only to investors from countries sharing a land border with India — France is exempt.

DTAA Benefits for France Branch Offices

The India-France DTAA, originally signed in 1992, was significantly amended by the Protocol signed on 24 February 2026. The modernised treaty provides important tax benefits for French companies operating through a Branch Office in India.

Permanent Establishment and Tax Treatment

A Branch Office in India constitutes a Permanent Establishment (PE) under Article 5 of the India-France DTAA. Profits attributable to the Indian PE are taxable in India at the corporate tax rate for foreign companies — currently 35% plus surcharge and cess (effective rate approximately 38.22%).

Revised Treaty Rates (Post-2026 Amendment)

The amended DTAA establishes the following withholding tax rates on specific income streams:

• Interest: 10% of the gross amount (for bank or financial institution loans)
• Royalties (industrial/commercial equipment): 10% of the gross payment
• Fees for Technical Services: Now restricted to cases involving genuine transfer of technical know-how — routine consultancy, advisory, cybersecurity services, and market research are expected to fall outside source-based taxation

Capital Gains Changes

Under the 2026 amendment, full taxing rights on capital gains from the sale of shares have been assigned to the country where the company is resident. This is a significant change from the previous treaty framework and should be considered by French companies contemplating eventual disinvestment from the Indian branch.

Profit Remittance

A key advantage of the Branch Office is that profits are freely remittable to France after payment of applicable Indian taxes. The French parent can claim a foreign tax credit in France (credit d'impot etranger) for Indian tax paid, effectively avoiding double taxation. To claim treaty benefits, a Tax Residency Certificate (TRC) from the Direction Generale des Finances Publiques and Form 10F are required.

Document Requirements and Authentication

Both India and France are signatories to the Hague Apostille Convention, so document authentication follows the simplified apostille process rather than embassy attestation.

Documents Required from the French Side

• Board resolution (proces-verbal du conseil d'administration) of the French parent company authorising establishment of a Branch Office in India (apostilled)
• Kbis extract or certificate of incorporation of the French company (apostilled)
• Audited financial statements (bilan et compte de resultat) of the French parent for the last 5 years (apostilled)
• Statuts (Articles of Association) of the French entity (apostilled)
• Company profile, details of directors/officers, and principal business activities
• Power of Attorney (procuration) in favour of the authorised representative in India (apostilled and notarised)
• Details of proposed activities of the Branch Office in India
• Bankers' report from the French parent's principal bank

Documents Required in India

• Application in Form FNC submitted through an AD Category-I bank
• Proof of registered office address of the Branch Office in India (rental agreement or ownership deed)
• NOC from the property owner
• Identity and address proof of the authorised representative in India

Apostille Process for French Documents

French documents are apostilled by the Procureur de la Republique (Public Prosecutor) at the Tribunal Judiciaire of the jurisdiction where the document was issued. Apostille in France typically costs EUR 15-45 per document and takes 3-7 working days. The apostille certifies the authenticity of the official signature, the capacity of the signatory, and the seal on the document, making it directly acceptable in India without further embassy legalisation.

Step-by-Step Registration Process

Setting up a Branch Office in India from France involves the following steps:

Step 1: Prepare and Apostille Documents

Gather all required French parent company documents, have them notarised where required, and obtain apostille from the Procureur de la Republique. This step typically takes 1-2 weeks including document preparation and translation of any French-language documents into English for Indian regulatory purposes.

Step 2: Submit Form FNC to AD Bank

Appoint an AD Category-I bank in India and submit the application in Form FNC along with all supporting documents. The AD bank conducts KYC verification and examines the application for completeness. The bank may seek clarifications or request additional documentation.

Step 3: RBI Approval and UIN Allotment

The AD bank forwards the application to the RBI for allotment of a Unique Identification Number (UIN). The RBI examines the application based on the parent company's credentials, proposed activities, and FEMA compliance. Approval is typically granted within 2-4 weeks.

Step 4: ROC Registration (Form FC-1)

Within 30 days of establishing the Branch Office, file Form FC-1 with the Registrar of Companies (ROC) under Section 380 of the Companies Act, 2013. This registers the French company's place of business in India. Obtain PAN, TAN, and GST registration.

Step 5: Open Bank Account

Open a bank account for the Branch Office with the designated AD bank. The account will be used for all operational transactions, expense reimbursements from the French parent, and profit remittances to France.

Step 6: Commence Operations

The Branch Office must commence operations within 6 months of the RBI approval date. Notify the AD bank of the actual date of establishment and begin maintaining proper books of accounts from day one.

Timeline and Costs

The typical timeline for setting up a Branch Office in India from France is 6-10 weeks, broken down as follows:

Cost Breakdown

• RBI application processing: No government fee (processed by AD bank)
• ROC filing fee (Form FC-1): INR 5,000-10,000
• Professional fees (CA/CS for application and registration): INR 50,000-1,50,000
• AD bank charges: Variable (typically INR 10,000-25,000)
• Apostille charges (France): EUR 15-45 per document
• Document translation (French to English): EUR 200-500
• Bankers' report and audit report costs: Variable
• Total estimated setup cost: INR 1,00,000-3,50,000 (approximately EUR 1,080-3,780)

Branch Office setup costs are generally higher than incorporating a Pvt. Ltd. company or LLP due to the RBI approval process and extensive documentation. Compare entity structures at our branch office vs subsidiary comparison.

Post-Registration Compliance

Once your Branch Office is operational, ongoing compliance requirements include:

• Annual Activity Certificate (AAC): Submit an AAC from a Chartered Accountant to the AD bank and Director General of Income Tax (International Taxation) by September 30 each year, certifying that the branch has operated within its permitted activities
• Financial statements: File annual accounts of the Branch Office with the ROC (Form FC-3 and FC-4)
• Tax returns: File income tax return for the Branch Office, pay advance tax quarterly, and file GST returns
• Statutory audit: Mandatory statutory audit of branch accounts by an Indian Chartered Accountant
• RBI reporting: Annual reporting to RBI through the AD bank on the branch's operations and financial position
• Transfer pricing: All transactions between the Branch Office and French parent must be at arm's length prices. Transfer pricing documentation and Form 3CEB are mandatory
• Compliance calendar: Follow the Indian compliance calendar for all statutory filings

Important: Under the 2025 RBI draft regulations, a Branch Office that fails to submit the Annual Activity Certificate for 3 consecutive years becomes liable for closure.

Common Challenges for France Companies

French companies setting up a Branch Office in India encounter these specific challenges:

Document Translation Requirements

Unlike Dutch or British companies, French corporate documents (Kbis extracts, statuts, proces-verbaux, bilans) are in French. Indian regulatory authorities require all documents in English. French companies must engage certified translators and then apostille both the original French documents and their English translations, adding approximately EUR 200-500 and 3-5 additional working days to the process.

Higher Tax Rate for Foreign Companies

Branch Offices of foreign companies are taxed at 35% plus surcharge and cess (effective rate approximately 38.22%), significantly higher than the 25% rate for domestic companies or Indian subsidiaries. Despite the free profit remittance advantage, this makes the Branch Office less tax-efficient for long-term, high-margin operations. French companies with growing Indian revenue should periodically evaluate whether converting to a subsidiary structure offers better post-tax returns.

Impact of the 2026 DTAA Amendment

The February 2026 Amending Protocol introduces changes that affect Branch Office tax planning. The deletion of the MFN clause means French companies can no longer claim lower withholding rates negotiated in India's treaties with other OECD countries. The revised treatment of Fees for Technical Services — restricting source-based taxation to genuine technology transfer — may benefit French consulting firms but requires careful documentation of the nature of services rendered.

RBI Approval Timelines and Queries

While the RBI approval process is generally efficient, French companies should expect 2-4 weeks for standard approval, with potential extensions if the RBI raises queries about the parent company's activities, financial standing, or the proposed branch operations. Comprehensive documentation upfront, including a detailed business plan for the Indian operations, minimises delays.

Annual Activity Certificate Compliance

The requirement to obtain an Annual Activity Certificate from a Chartered Accountant confirming the branch has operated within its RBI-approved scope is critical. Under the 2025 draft regulations, failure to submit the AAC for 3 consecutive years can trigger closure proceedings. French companies must maintain detailed records of all activities to demonstrate compliance.

Profit Attribution and Transfer Pricing

Determining the correct profit attributable to the Indian Branch Office (PE) versus the French head office requires careful analysis. India's transfer pricing regulations are among the world's most stringent, and all inter-company transactions must be at arm's length prices with comprehensive documentation. The profit attribution must follow OECD PE attribution guidelines and the India-France treaty provisions.

Frequently Asked Questions

Can a French company set up a Branch Office in India without a local representative?

No. The Branch Office must have an authorised representative in India who will handle all regulatory filings, correspondence with authorities, and bank account operations. This representative need not be an Indian citizen but must have a valid Indian address and be authorised by the French parent through an apostilled Power of Attorney.

How long does RBI approval take for a French company's Branch Office?

RBI approval through the AD bank typically takes 2-4 weeks from the date of submission of a complete Form FNC application. Including document preparation, apostille, and translation, the total setup time is usually 6-10 weeks.

Can a Branch Office in India carry out manufacturing for a French parent company?

No. A Branch Office cannot directly carry out manufacturing activities. However, it can sub-contract manufacturing to an Indian manufacturer while providing technical supervision and quality control on behalf of the French parent. French companies needing direct manufacturing should incorporate a subsidiary.

How has the 2026 DTAA amendment affected Branch Office taxation?

The February 2026 amendment deleted the MFN clause (preventing French companies from claiming lower rates from other OECD treaties), revised capital gains taxation (assigning full rights to the country of the company's residence), and restricted FTS taxation to genuine technology transfer. The branch PE tax rate remains at approximately 38.22%.

Are profits of the French Branch Office freely remittable?

Yes. After payment of all applicable Indian taxes, the Branch Office's net profit can be freely remitted to the French parent through the AD bank. Required documentation includes audited financial statements, tax payment challans, and a CA certificate confirming no outstanding tax liabilities.

Do French documents need to be translated for the RBI application?

Yes. All documents submitted to Indian regulatory authorities (RBI, ROC, Income Tax) must be in English. French corporate documents (Kbis, statuts, proces-verbaux, bilans) must be professionally translated into English. Both the original French documents and the English translations should be apostilled.

Is a Branch Office more expensive to maintain than an LLP or Private Limited Company?

Generally yes. Branch Offices face a higher tax rate (approximately 38.22% versus 25-30% for companies and 34.94% for LLPs), mandatory audit irrespective of turnover, and more extensive regulatory compliance including the Annual Activity Certificate. However, they offer free profit remittance and avoid the complexity of separate entity governance.