How to Set Up a Branch Office in India from UAE
A Branch Office (BO) allows UAE companies to establish a direct commercial presence in India without incorporating a separate Indian legal entity. The Branch Office operates as an extension of the UAE parent company, conducting business under the parent's name and liability. This structure is particularly popular among UAE trading houses, consulting firms, and IT companies looking to test the Indian market before committing to a full subsidiary.
India-UAE bilateral trade crossed USD 105.76 billion in FY 2024-25, more than doubling from USD 43.3 billion in FY 2020-21, driven by the India-UAE Comprehensive Economic Partnership Agreement (CEPA). The UAE is India's 7th largest FDI source, with cumulative investment of approximately USD 22.84 billion from April 2000 to March 2025. A Branch Office provides UAE companies with a practical entry point to capitalise on this rapidly expanding bilateral relationship.
Unlike a Private Limited Company or LLP, a Branch Office can engage in specific commercial activities approved by the RBI — including export/import of goods, professional and consultancy services, IT services, research, and acting as a buying/selling agent for the parent company. However, it cannot undertake retail trading or manufacturing (unless in a Special Economic Zone).
FDI Route and Regulatory Requirements
Establishing a Branch Office in India requires prior approval from the Reserve Bank of India (RBI) through the submission of Form FNC via an Authorised Dealer (AD) Category-I Bank.
AD Bank Approval (Automatic Route)
When the principal business of the UAE parent company falls under sectors where 100% FDI is allowed under the automatic route, the AD Bank can grant approval directly without referring the application to the RBI. This covers the majority of UAE applications in sectors such as trading, IT, consulting, and professional services.
RBI Approval (Government Route)
If the parent company's business falls under sectors requiring the Government Approval Route, or if the company does not meet the eligibility criteria, the AD Bank forwards the application to the RBI. This route typically adds 4-8 weeks to the process.
Eligibility Criteria
The UAE parent company must satisfy the following requirements:
- Profit-making track record for the immediately preceding 5 financial years
- Net worth of not less than USD 100,000 (or equivalent in AED)
- If the UAE entity does not meet these criteria (common for newer free zone companies), a Letter of Comfort from the ultimate parent company that does meet the requirements is acceptable
Press Note 3 — Not Applicable
The UAE is not subject to Press Note 3 restrictions. UAE companies can establish Branch Offices in India without additional government security clearance.
Permitted Activities
A Branch Office in India is permitted to undertake the following activities:
- 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 collaboration between Indian companies and the parent
- Representing the parent company in India and acting as a buying/selling agent
- Rendering services in Information Technology and software development
- Rendering technical support for products supplied by the parent company
DTAA Benefits for UAE Investors
The India-UAE DTAA, effective since 22 September 1993, has specific implications for Branch Offices, since a Branch Office typically constitutes a Permanent Establishment (PE) of the UAE parent in India.
Tax Treatment of Branch Office Profits
Profits attributable to the Indian Branch Office are taxable in India at the corporate tax rate for foreign companies — currently 35% plus applicable surcharge and cess, resulting in an effective rate of approximately 38.22%. The DTAA ensures that:
- Dividends: Withholding tax capped at 10% (compared to 20% domestic rate)
- Interest: 5% for banks and financial institutions, 12.5% for others
- Royalties and FTS: Capped at 10% of the gross amount
- India's taxing right is limited to profits directly attributable to the Branch Office activities
UAE Zero-Tax Advantage
The UAE's historically zero-income-tax environment meant Branch Office profits remitted to the UAE were effectively taxed only in India at the DTAA rates. With the introduction of UAE Corporate Tax (9% on profits above AED 375,000) from June 2023, this advantage has shifted. However, the DTAA prevents double taxation, and the effective combined rate remains competitive compared to many other jurisdictions.
India-UAE BIT 2024
The new Bilateral Investment Treaty, effective from August 2024, provides enhanced protections for UAE investors operating Branch Offices in India, including fair and equitable treatment guarantees, protection against expropriation without compensation, and access to international arbitration for dispute resolution.
Document Requirements and Authentication
The UAE is not a member of the Hague Apostille Convention. Documents from the UAE require embassy attestation. Since September 2025, the process has been modernised with a digital attestation system that allows completion from India.
UAE Document Authentication Process
- Notarisation: Documents notarised by a Notary Public in the UAE
- UAE Ministry of Foreign Affairs (MOFA): Documents attested by MOFA
- Indian Embassy in UAE: The Indian Embassy in Abu Dhabi or Consulate in Dubai attests the documents
The digital attestation system (September 2025) allows both UAE Embassy and MOFA attestation to be completed from India, with a single digital certificate issued within 5-7 working days.
Documents Required from UAE
- Certificate of Incorporation / Commercial License from the relevant UAE authority (DED, free zone authority) — attested
- Memorandum and Articles of Association of the UAE company — attested
- Board Resolution approving establishment of a Branch Office in India and appointing an authorised representative — attested
- Trade License of the UAE entity — attested
- Audited Financial Statements for the last 5 financial years — attested
- ACRA-equivalent profile or company extract from the UAE authority — attested
- Power of Attorney authorising a representative in India
- Passport copies and Emirates ID of the authorised representative — notarised and attested
- Letter of Comfort from the parent company (if the UAE entity does not meet net worth/profitability criteria independently)
Documents Required in India
- Proof of registered office address (rental agreement or sale deed plus NOC from the owner)
- Details of proposed activities to be carried out in India
- Projected financials for the Branch Office for the next 3-5 years
Step-by-Step Registration Process
Step 1: Document Preparation and Attestation in UAE (7-10 Working Days)
Prepare and authenticate all required documents. Using the digital attestation route, the process takes 5-7 working days. The traditional route through UAE MOFA and Indian Embassy/Consulate takes 7-10 working days. Ensure all 5 years of audited financial statements are attested.
Step 2: File Form FNC with AD Bank (1-2 Working Days for Submission)
Submit the completed Form FNC application along with all attested documents to a designated AD Category-I Bank in India. The AD Bank reviews the application for completeness and eligibility.
Step 3: RBI/AD Bank Approval (3-8 Weeks)
If the UAE parent's business falls under the automatic route, the AD Bank can grant approval within 3-4 weeks. If forwarded to the RBI, processing takes 6-8 weeks. The RBI issues a Unique Identification Number (UIN) upon approval.
Step 4: ROC Registration — Form FC-1 (Within 30 Days of Approval)
Within 30 days of receiving RBI/AD Bank approval, register the Branch Office with the Registrar of Companies by filing Form FC-1 under Section 380 of the Companies Act, 2013. The filing fee is INR 6,000. All attested documents must be submitted, with English translations where required.
Step 5: Obtain PAN and TAN (1-2 Weeks)
Apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) from the Income Tax Department for filing tax returns and TDS compliance.
Step 6: Open Bank Account (3-4 Weeks)
Open a bank account with the designated AD Category-I Bank. UAE companies, particularly those from free zones, should be prepared for enhanced KYC requirements and potential additional documentation requests. The parent remits initial operating funds to this account.
Step 7: GST and Other Registrations (1-2 Weeks)
Register for GST (if applicable), Professional Tax, and any other state-level registrations based on the Branch Office's activities and location.
Timeline and Costs
Realistic Timeline from UAE
- Document preparation and attestation (UAE): 7-10 working days (5-7 via digital route)
- Form FNC filing and AD Bank/RBI approval: 3-8 weeks
- ROC registration (Form FC-1): 3-5 working days
- PAN and TAN: 1-2 weeks
- Bank account opening: 3-4 weeks (can overlap)
- Total: 8-12 weeks end-to-end
Fee Breakdown
- ROC filing fee (Form FC-1): INR 6,000
- UAE attestation charges: AED 500-2,000 (depending on number of documents and route)
- AD Bank processing charges: varies by bank (typically INR 10,000-25,000)
- Professional fees (CA/CS): INR 40,000-1,00,000
- PAN and TAN application: INR 200 each
- Registered office rent: INR 10,000-50,000/month depending on city
Unlike a Private Limited Company, a Branch Office does not have share capital. The UAE parent remits funds as needed to cover operating expenses and working capital requirements.
Post-Registration Compliance
Branch Offices in India have significant ongoing compliance obligations:
- Annual Activity Certificate (AAC): a Chartered Accountant's certificate confirming that the Branch Office's activities comply with the RBI approval, filed by 30 September through the AD Bank
- Audited Financial Statements: filed annually with the RBI (via AD Bank) and the Director General of Income Tax (International Taxation)
- Form FC-3 (Annual Return): filed with the ROC within 60 days of the financial year-end
- Form FC-4 (Financial Statements): filed with the ROC within 6 months of financial year-end
- Income Tax Return: filed by 31 October each year
- GST Returns: monthly GSTR-1 and GSTR-3B if registered
- Transfer Pricing Documentation: required for transactions between the Branch and the UAE parent
- FLA Return: annual filing with the RBI by 15 July
Profit Remittance
Branch Offices are permitted to remit profits to the UAE parent through the AD Bank, subject to: production of audited Balance Sheet and Profit and Loss account, a CA certificate confirming the remittable profit was earned from permitted activities and excludes revaluation gains, and payment of all applicable Indian taxes (effective rate ~38.22% for foreign companies).
Common Challenges for UAE Companies
Attestation Process Complexity
Unlike Hague Convention member countries where a simple apostille suffices, UAE documents require multi-step embassy attestation. While the September 2025 digital system has streamlined this, many UAE investors underestimate the documentation requirements. Free zone entities face additional complexity — each free zone authority (DMCC, JAFZA, DIFC, ADGM, RAKEZ) has different document formats and attestation requirements. Arabic-language documents require certified English translations.
5-Year Profit Track Record
The requirement for a 5-year profit-making track record is particularly challenging for newer UAE free zone companies, many of which are less than 5 years old. If your company does not meet this criterion independently, a Letter of Comfort from a qualifying parent company is the standard workaround. Alternatively, consider a Private Limited Company or LLP, which have no such requirement.
Higher Tax Rate for Branch Offices
Branch Offices of foreign companies pay an effective tax rate of approximately 38.22% (35% base + surcharge + cess), compared to 22-25% for domestic Indian companies. This significant difference leads many UAE companies to eventually convert their Branch Office into a Wholly Owned Subsidiary to benefit from the lower rate.
Activity Restrictions
The Branch Office is restricted to the activities specifically approved by the RBI. It cannot undertake retail trading, manufacturing, or processing (exception: SEZ-located branches). The RBI monitors compliance through the Annual Activity Certificate. Operating outside approved activities can result in penalties or closure orders.
Banking KYC Delays
Indian banks apply enhanced KYC for companies with UAE beneficial owners, particularly free zone entities. Banks may request additional documentation, extended due diligence, and video-KYC verification. Opening a bank account can take 3-4 weeks or longer. Having a dedicated banking relationship helps expedite the process.
Frequently Asked Questions
Can a UAE free zone company open a Branch Office in India?
Yes, provided the free zone company meets the eligibility criteria: 5-year profit track record and minimum USD 100,000 net worth. The free zone company's trade license, certificate of incorporation, and financial statements must be properly attested through the UAE MOFA and Indian Embassy process. If the free zone entity doesn't meet the criteria independently, a Letter of Comfort from the parent company may suffice.
What activities can a UAE Branch Office undertake in India?
Permitted activities include export/import of goods, professional/consultancy services, IT services and software development, research work, promoting technical collaborations, acting as buying/selling agent for the parent, and providing technical support. The Branch Office cannot engage in retail trading or manufacturing unless located in an SEZ.
How long does the attestation process take for UAE documents?
The traditional embassy attestation route takes 7-10 working days. The new digital attestation system (September 2025) allows both UAE Embassy and MOFA attestation from India within 5-7 working days. Branch Office applications require more documents (including 5 years of financials) than company incorporations, so allow extra time.
Can a Branch Office remit profits to the UAE?
Yes. After paying Indian income tax (effective rate ~38.22%), the Branch Office can remit net profits to the UAE parent through the AD Bank. A CA certificate confirming the profit was earned from permitted activities and excludes revaluation gains is required.
What is the effective tax rate for a Branch Office in India?
Foreign company Branch Offices pay corporate tax at 35% plus applicable surcharge and health and education cess, resulting in an effective rate of approximately 38.22%. This is significantly higher than the 22-25% rate for domestic Indian companies, which is one reason many UAE companies eventually convert to a subsidiary structure.
How long does it take to set up a Branch Office from UAE?
The process typically takes 8-12 weeks end-to-end, including document attestation (7-10 days), Form FNC filing and RBI/AD Bank approval (3-8 weeks), ROC registration (3-5 days), and bank account opening (3-4 weeks, can overlap). The timeline is longer than for Singapore due to the attestation process and potentially longer RBI processing.
Can a Branch Office be converted into a subsidiary?
Yes. A Branch Office can be converted into a Private Limited Company or Wholly Owned Subsidiary, requiring RBI approval, fresh incorporation, transfer of assets and liabilities, and closure of the Branch Office. The process takes 3-6 months but is common for UAE companies seeking to benefit from lower domestic tax rates.