How to Register a Branch Office in India from Romania
A Branch Office is one of the most direct ways for an established Romanian 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, legal identity, and corporate registration. It can engage in commercial activities permitted by the Reserve Bank of India (RBI), generate revenue in India, and repatriate profits to Romania.
India and Romania have maintained diplomatic relations since 1948, and bilateral trade is nearing US$3 billion. Indian investment in Romania is estimated at approximately US$1.5 billion, spanning IT services, pharmaceuticals, and manufacturing. In February 2024, the two countries celebrated the 10th anniversary of their Extensive Partnership with a Joint Declaration reaffirming their commitment to deepening economic ties. Key trade flows include petroleum products, engineering goods, pharmaceuticals, machinery, and electronics. For Romanian companies that want to test the Indian market, fulfil export-import contracts, or provide professional and technical services without the governance burden of a subsidiary, a Branch Office is the ideal entry structure. For entity comparisons, 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 a Romanian 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 Romanian 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 Romania does not share a land border with India, Press Note 3 (2020) restrictions do not apply. Romanian companies can proceed without the additional security clearances required for 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 Romanian Companies
The Double Taxation Avoidance Agreement between India and Romania is particularly relevant for Branch Offices because a Branch Office constitutes a Permanent Establishment (PE) of the foreign company in India. The original treaty was signed in 1987, and a revised convention was signed on 8 March 2013 with modernised provisions. The DTAA prevents double taxation on income earned by Romanian companies in India:
- Business profits: Taxable in India only to the extent attributable to the PE (Article 7)
- Dividends: Capped at 10% withholding tax in the source country
- Interest: Capped at 10% withholding tax
- Royalties and fees for technical services: Capped at 10%
Romanian companies can claim foreign tax credits in Romania 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 Romania's ANAF (National Agency for Fiscal Administration) and file Form 10F in India. See our DTAA Master Guide for detailed guidance.
Document Requirements and Authentication
Romania has been a member of the Hague Convention (Apostille Convention) since 13 March 2001. Romanian documents require an apostille from the Tribunale (county courts), which is significantly faster and simpler than the embassy attestation process. For details, see Apostille vs Embassy Attestation.
Documents Required from the Romanian Parent Company
- Certificate of Incorporation (Certificat de inregistrare) of the parent company (apostilled)
- Act constitutiv (Articles of Association) or equivalent charter document (apostilled, with certified English translation)
- 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 Romania
Gather all required corporate documents from the Romanian parent company. Have them notarised by a Romanian notary (notar public) and then apostilled through the Tribunale (county courts). All documents in Romanian must be accompanied by certified English translations prepared by authorised translators (traducatori autorizati). Timeline: 2-3 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 Romanian 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 in accordance with ANAF records.
Timeline and Costs
The end-to-end timeline for establishing a Branch Office in India from Romania is approximately 10-16 weeks:
| Stage | Duration |
|---|---|
| Document apostilling and translation in Romania | 2-3 weeks |
| AD bank application and processing | 4-8 weeks |
| ROC registration (Form FC-1) | 1-2 weeks |
| PAN/TAN registration | 1-2 weeks |
| Bank account opening | 2-3 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 Romania: RON 20-50 per document (approximately EUR 4-10)
- Certified English translations: RON 30-50 per page
- Total estimated cost: INR 75,000-2,00,000 plus apostille and translation 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 Romanian Companies
Five-Year Profit Track Record
The RBI requires the Romanian parent company to demonstrate profitability for the five consecutive years immediately preceding the application. Startups and early-stage Romanian 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.
Language and Document Translation
Romanian corporate documents (Certificat de inregistrare, Act constitutiv, financial statements) are issued in Romanian. All documents submitted to the AD bank and ROC must be in English or accompanied by certified English translations. Budget additional time (1-2 weeks) and costs for professional translation and certification before apostilling. Use authorised translators (traducatori autorizati) recognised by the Romanian Ministry of Justice to ensure the translations are accepted without challenge.
Manufacturing Restriction
Branch Offices cannot engage in manufacturing or processing activities in India (except within SEZs). Romanian companies in machinery, automotive components, or industrial equipment that want to manufacture in India must establish a subsidiary or joint venture instead. However, a Branch Office can sub-contract manufacturing to Indian companies while handling sales, distribution, and technical support. 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. This tax disadvantage should be carefully factored into the cost-benefit analysis when choosing between a Branch Office and a subsidiary. For businesses expecting significant Indian profits, a WOS or Private Limited Company may be more tax-efficient. Refer to our Corporate Tax: India vs Global comparison.
Profit Remittance Documentation
While Branch Offices can freely repatriate profits to Romania, the remittance requires a Chartered Accountant's certificate confirming tax compliance, an auditor's certification, and regulatory approvals through the AD bank. The process is straightforward but documentation-intensive, typically requiring 2-4 weeks per remittance cycle. Ensure compliance with FEMA regulations and file Form 15CA/15CB before each outward remittance. See our Repatriation Guide for complete procedures.
Frequently Asked Questions
Can a Romanian 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 Romanian parent company?
The Romanian 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. This is verified through the apostilled audited financial statements.
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. Romanian companies in machinery or industrial manufacturing should consider establishing a Private Limited Company or Wholly Owned Subsidiary instead.
How is a Branch Office taxed in India under the DTAA?
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 and 4% health and education cess. The effective tax rate is approximately 37.13% to 38.22%. The India-Romania DTAA caps withholding tax on dividends, interest, royalties, and technical services fees at 10%, and Romanian companies can claim foreign tax credits in Romania for taxes paid in India.
Do Romanian documents need apostille or embassy attestation?
Romania has been a member of the Hague Apostille Convention since 2001, so documents only require an apostille from the Tribunale (county courts). Embassy attestation is not required. All Romanian-language documents must be accompanied by certified English translations prepared by authorised translators recognised by the Romanian Ministry of Justice.
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. Plan for 4-6 months for the entire transition.
How long does the complete Branch Office setup take from Romania?
The end-to-end timeline is approximately 10-16 weeks, covering document apostilling and translation in Romania (2-3 weeks), AD bank application and processing (4-8 weeks), ROC registration (1-2 weeks), PAN/TAN registration (1-2 weeks), and bank account opening (2-3 weeks). Document completeness and quality of English translations are the primary factors affecting timeline.