How to Set Up a Branch Office in India from Switzerland
A Branch Office (BO) provides Swiss companies with a direct operational presence in India without incorporating a separate legal entity. The branch operates as an extension of the Swiss parent company, carrying out permitted activities such as import-export, professional services, and representation. With approximately 328 Swiss companies already operating in India and 110 manufacturing locally, a branch office is often the first step for Swiss firms testing the Indian market.
Switzerland enjoys a favourable regulatory position for establishing a branch office in India. As a non-land-border country, Swiss companies can apply through the general permission route via an Authorized Dealer (AD) Category-I bank, without requiring specific RBI approval. This stands in contrast to entities from countries like China or Hong Kong, which require specific RBI approval under separate regulations.
A branch office is ideal for Swiss companies that want to carry out trading activities, provide consultancy services, conduct research, promote collaborations with Indian companies, or provide IT services and technical support. However, branch offices cannot manufacture or engage in retail trading in India (unless located in a Special Economic Zone).
FDI Route & Regulatory Requirements
Branch office establishment follows a distinct pathway from equity FDI. Swiss companies benefit from a more straightforward process since Switzerland does not appear on the list of countries requiring specific RBI approval.
General Permission Route via AD Bank
Under the Foreign Exchange Management (Establishment in India of a Branch Office or a Liaison Office or a Project Office or Any Other Place of Business) Regulations, 2016, Swiss companies can establish a branch office through the general permission route. The application is submitted to an AD Category-I bank, which conducts due diligence and can approve the application at the bank level without referring it to the RBI for specific approval.
This is a significant advantage over entities from China, Hong Kong, Pakistan, Bangladesh, Sri Lanka, Afghanistan, and Iran, which must obtain prior RBI approval through the specific approval route.
2025 Draft Regulations
In October 2025, the RBI released draft Foreign Exchange Management (Establishment in India of a Branch or Office) Regulations, 2025, proposing to replace the 2016 framework. The draft maintains the two-track system: a General Approval Route (default for most foreign entities including Swiss companies) and a Specific Approval Route (for geopolitically sensitive cases). The RBI would allot a Unique Identification Number upon establishment.
Permitted Activities
A branch office in India is authorized to undertake:
- Export and import of goods
- Provision of professional or consultancy services
- Research work aligned with the parent company's domain
- Promotion of technical or financial collaborations between Indian and Swiss companies
- Representation of the parent company and acting as buying/selling agent
- IT services and software development
- Technical support for products supplied by the parent company
Prohibited Activities
Branch offices cannot engage in retail trading or manufacturing in India (unless in a SEZ). Swiss companies planning manufacturing operations should consider a subsidiary structure instead. This is a critical consideration given that 110 Swiss companies already manufacture in India—all through subsidiary structures.
EFTA-India TEPA Implications
The Trade and Economic Partnership Agreement between EFTA states (including Switzerland) and India, effective from October 1, 2025, enhances the bilateral investment framework. While TEPA does not directly modify branch office establishment procedures, it signals a deeper economic partnership and USD 100 billion investment commitment from EFTA nations over 15 years, creating a more favourable environment for Swiss business presence in India.
DTAA Benefits for Swiss Companies
The India-Switzerland DTAA (in force since 1994, revised in 2010) is critical for branch office operations, particularly regarding Permanent Establishment (PE) taxation and profit remittance.
Permanent Establishment and Tax Treatment
A branch office in India constitutes a PE of the Swiss parent company under Article 5 of the DTAA. Profits attributable to the branch are taxable in India at the foreign company tax rate of 35% (plus surcharge and 4% health and education cess), resulting in an effective rate of approximately 37.13%-38.22%.
Current Treaty Rates (Post-MFN Suspension)
- Interest: Withholding tax capped at 10%
- Royalties: Withholding tax capped at 10%
- Fees for Technical Services: Withholding tax capped at 10%
MFN Clause Suspension Impact
Switzerland suspended the MFN clause with effect from January 1, 2025, following the Indian Supreme Court's October 2023 ruling (Nestle SA case). While this primarily impacts dividend taxation (now 10% instead of the MFN rate of 5%), it also signals a broader reassessment of the treaty relationship. Swiss companies operating branch offices should review their tax structuring in light of this development.
Profit Remittance and Double Taxation Relief
Branch offices remit profits to the head office as profit repatriation rather than dividend distribution. No additional distribution tax applies to branch profit remittances. The DTAA provides for tax credit mechanisms so that taxes paid in India are credited against Swiss tax liability, preventing double taxation. The branch must file Form 15CA/15CB for each outward remittance.
Document Requirements & Authentication
Switzerland is a member of the Hague Apostille Convention since March 11, 1973. Documents require an apostille from the relevant Swiss cantonal authority.
Documents Required from Switzerland
- Commercial Register Extract: Of the Swiss parent company (Handelsregisterauszug), apostilled
- Articles of Association: Of the Swiss entity (Statuten), apostilled
- Board Resolution: Authorizing the establishment of a branch office in India, apostilled
- Audited Financial Statements: Of the Swiss parent for the latest 3 financial years, apostilled
- Power of Attorney: In favour of the authorized signatory in India, apostilled
- Passport copies: Of the authorized representative in India, notarized
- Activity details: Description of activities the branch will carry out in India
- Banker's Certificate: From a Swiss bank confirming the parent company's financial standing
Documents Required in India
- Form FNC (Application for Establishment of Branch/Liaison Office)
- Registered office address proof (rental agreement + NOC from landlord + utility bill)
- Digital Signature Certificate (DSC) for authorized representative
- Form FC-1 for registration with the Registrar of Companies
Apostille Process in Switzerland
Each Swiss canton has its own competent authority (Kantonale Beglaubigungsstelle) for issuing apostilles. The fee typically ranges from CHF 15-30 (approximately EUR 10-20). Processing time is usually 1-5 working days depending on the canton. For companies registered in Zurich, the Bezirksgericht Zürich handles apostilles; for Geneva, it is the Chancellerie d'État. Documents must be notarized by a Swiss notary before apostille.
Step-by-Step Registration Process
Swiss companies benefit from the general permission route, which is faster and less complex than the specific RBI approval route required for land-border country entities.
Step 1: Document Preparation & Apostille
Prepare all required documents in Switzerland, notarize them through a Swiss notary, and obtain apostilles from the relevant cantonal authority. Given that different cantons have different processing times, begin this step early. Timeline: 1–2 weeks.
Step 2: Submit Form FNC to AD Category-I Bank
File the completed Form FNC along with all supporting documents with an AD Category-I bank in India. The AD bank conducts due diligence on the Swiss parent company's financial standing, track record, and proposed activities. Under the general permission route, the AD bank can approve the application without referring it to the RBI. Timeline: 2–4 weeks.
Step 3: Obtain RBI Unique Identification Number
Once the AD bank approves the application, the RBI allots a Unique Identification Number (UIN) to the branch office. This UIN is required for all subsequent regulatory filings and compliance reporting. Timeline: 1–2 weeks.
Step 4: Register with Registrar of Companies
File Form FC-1 with the ROC within 30 days of establishing the branch office, as required under Section 380 of the Companies Act, 2013. The ROC issues a certificate of registration. Timeline: 2–3 weeks.
Step 5: Obtain PAN & TAN
Apply for a Permanent Account Number (PAN) and Tax Deduction Account Number (TAN). These are essential for tax filings, TDS compliance, and banking operations. Timeline: 1–2 weeks.
Step 6: Open Bank Account
Open a current account with the AD bank in India. The branch office must maintain all India-related banking operations through this account. The AD bank will require the approval letter, UIN, and ROC registration certificate. Timeline: 1–2 weeks.
Step 7: Commence Operations
The branch must commence operations within 6 months of the approval letter (extendable by another 6 months on reasonable grounds). Intimate the AD bank of the date of establishment.
Timeline & Costs
Swiss companies benefit from significantly shorter timelines compared to entities from land-border countries.
Realistic Timeline Breakdown
| Step | Duration |
|---|---|
| Document preparation & apostille | 1–2 weeks |
| AD bank processing (general permission) | 2–4 weeks |
| RBI UIN allotment | 1–2 weeks |
| ROC registration (Form FC-1) | 2–3 weeks |
| PAN & TAN application | 1–2 weeks |
| Bank account opening | 1–2 weeks |
| Total estimated timeline | 6–10 weeks |
Fee Breakdown
- AD bank processing fee: Varies by bank (typically INR 10,000–25,000)
- ROC registration (Form FC-1): INR 6,000
- PAN application: INR 107
- TAN application: INR 65
- Stamp duty: Varies by state of registration
- Professional fees: INR 40,000–1,00,000 (for CA/CS handling RBI and ROC filings)
- Apostille fees (Switzerland): CHF 15–30 per document
- Swiss notarization fees: CHF 100–500 per document (varies by canton)
Post-Registration Compliance
Branch offices of Swiss companies must maintain ongoing compliance with both RBI regulations and the Companies Act, 2013.
Annual Filings
- Annual Activity Certificate (AAC): Submitted to the AD bank, certified by a Chartered Accountant, within 6 months of the end of the financial year
- Financial Statements (Form FC-3): Filed with the ROC within 6 months of the close of the financial year
- Income Tax Return: Filed by October 31 each year (branch offices are taxed as foreign companies)
- GST Returns: Monthly/quarterly if GST registered (mandatory if turnover exceeds threshold)
- FLA Return: Annual Foreign Liabilities and Assets return to RBI by July 15
Profit Remittance Procedures
Branch office profits can be remitted to the Swiss head office through the AD bank after payment of applicable Indian taxes. For each outward remittance, the branch must file Form 15CA/15CB. A CA certificate (Form 15CB) is required for remittances exceeding INR 5 lakh, confirming tax compliance and treaty applicability.
Critical Compliance Point: AAC Submission
The Annual Activity Certificate is a critical compliance requirement. Non-submission within the prescribed timeframe triggers account freezing by the AD bank. If the delay extends for three consecutive years, the RBI may initiate closure proceedings. Swiss companies must establish a robust compliance calendar from the outset.
Common Challenges for Swiss Companies
1. Higher Effective Tax Rate
Branch offices are taxed at the foreign company rate of 35% (plus surcharge and cess), resulting in an effective rate of approximately 37.13%-38.22%. This is significantly higher than the 25%-30% applicable to domestic Indian companies or subsidiaries. Swiss companies with substantial India revenue should evaluate whether converting to a subsidiary would be more tax-efficient.
2. MFN Clause Suspension
The suspension of the Switzerland-India DTAA MFN clause from January 2025 has increased dividend withholding tax from 5% to 10%. While this does not directly affect branch office profit remittances (which are not dividends), it reflects a broader shift in the bilateral tax relationship. Swiss companies should monitor developments and adjust their tax strategy accordingly.
3. Manufacturing Prohibition
Branch offices cannot engage in manufacturing activities. Given that 110 Swiss companies already manufacture in India (all through subsidiaries), Swiss firms with manufacturing ambitions must incorporate a separate entity. The branch can, however, complement a subsidiary by handling import-export, representation, and technical support activities.
4. Activity Scope Limitation
The permitted activity list for branch offices is specific and cannot be easily expanded. Swiss companies must carefully define their branch activities at the application stage. Expanding activities later requires a fresh application to the AD bank. This contrasts with a subsidiary, which can engage in any lawful business.
5. Conversion to Subsidiary
If Indian operations grow substantially, Swiss companies may need to convert the branch office to a subsidiary. This is not a simple conversion—it requires closing the branch, incorporating a new entity, transferring assets, and obtaining fresh registrations. Planning for this eventuality from the outset is advisable.
6. Swiss Franc Remittance Considerations
Capital must be remitted in a freely convertible currency. Swiss companies typically remit in CHF or USD. Exchange rate fluctuations between CHF and INR can impact profitability calculations. Establishing hedging arrangements through the AD bank may be advisable for companies with significant India operations.
Frequently Asked Questions
Does a Swiss company need RBI approval to set up a branch office in India?
Swiss companies can establish a branch office through the general permission route via an AD Category-I bank, without requiring specific RBI approval. Switzerland is not on the list of countries requiring prior RBI clearance, unlike China, Hong Kong, or Pakistan. The AD bank conducts due diligence and can approve the application directly.
Can a Swiss branch office manufacture in India?
No. Branch offices are prohibited from manufacturing or processing activities in India, unless located in a Special Economic Zone (SEZ). Swiss companies seeking to manufacture in India must incorporate a subsidiary (Private Limited Company or WOS). Currently, 110 Swiss companies manufacture in India through subsidiary structures.
What is the tax rate for a Swiss company's branch office in India?
Branch offices of foreign companies (including Swiss) are taxed at 35% corporate tax rate, plus surcharge (2%-5% based on income) and 4% health and education cess. The effective rate is approximately 37.13%-38.22%, compared to 25%-30% for domestic Indian companies.
How does the MFN clause suspension affect a Swiss branch office?
The MFN clause suspension primarily impacts dividend withholding tax (now 10% instead of 5%). For branch offices, profit remittances to the Swiss head office are not classified as dividends, so the direct impact is limited. However, other cross-border payments (interest, royalties, technical fees) remain at 10% under the base treaty rate.
How long does it take to set up a branch office from Switzerland?
The entire process typically takes 6-10 weeks under the general permission route. This is significantly faster than the 12-20 weeks required for entities from land-border countries like Hong Kong, which need specific RBI approval.
Is apostille sufficient for Swiss documents?
Yes. Switzerland has been a member of the Hague Apostille Convention since 1973. Documents apostilled by the relevant cantonal authority (Kantonale Beglaubigungsstelle) are legally recognized in India without further embassy attestation. Apostille fees range from CHF 15-30 per document.
What happens if the Swiss branch office does not file the Annual Activity Certificate?
Non-submission of the AAC triggers account freezing by the AD bank. If the certificate is not submitted for three consecutive years, the RBI may initiate closure proceedings for the branch office. Timely AAC submission, certified by a Chartered Accountant, is critical for maintaining operational continuity.