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{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”What is a Foreign Company under the Companies Act 2013?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Under Section 2(42) of the Companies Act 2013, a Foreign Company is any company or body corporate incorporated outside India that has an established place of business in India — whether through a share transfer office, branch, or other representation. Foreign companies must register with the ROC under Section 380 within 30 days of establishing a place of business in India.”}},{“@type”:”Question”,”name”:”What is the difference between a Branch Office, Liaison Office, and Project Office for a foreign company in India?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”A Branch Office can carry out commercial activities and earn income in India. A Liaison Office can only act as a communication channel — it cannot carry out commercial activities or generate income in India. A Project Office is set up for the duration of a specific project in India. All three require RBI approval under FEMA. A Wholly Owned Subsidiary (WOS) is a separate Indian company incorporated under the Companies Act — it can do everything a domestic company can, including earning and retaining profits.”}},{“@type”:”Question”,”name”:”What forms do foreign companies need to file in India?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Foreign companies operating in India must file: Form FC-1 (within 30 days of establishing a place of business — for Section 380 registration), Form FC-3 (financial accounts — annually), and Form FC-4 (annual return — within 60 days of the last day of each financial year). These are filed with the ROC. Additionally, FEMA and RBI compliance forms (FCGPR, FCTRS, ODI, etc.) must be filed for foreign investment or outward transfers.”}},{“@type”:”Question”,”name”:”Which is better for a foreign company in India: Branch Office or Wholly Owned Subsidiary?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”A Wholly Owned Subsidiary (WOS) is generally preferred for most foreign companies entering India. A WOS is a separate legal entity — it protects the parent company from direct liability, can earn profits, raise local debt, and enjoy all benefits available to domestic Indian companies. A Branch Office exposes the parent company to liability for branch operations, is more restricted in permitted activities, and cannot raise equity. The WOS route also benefits from favorable tax treaty positions in many cases.”}},{“@type”:”Question”,”name”:”Does a foreign company need RBI approval to set up in India?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Yes. Foreign companies must obtain Reserve Bank of India (RBI) approval to set up a Branch Office, Liaison Office, or Project Office in India under FEMA regulations. The application is filed with the RBI through the Authorised Dealer (AD) banker. However, for incorporating a Wholly Owned Subsidiary (Indian company), FDI is governed by DPIIT/RBI Foreign Investment policy — most sectors now permit 100% FDI under the automatic route without prior RBI approval.”}}}]}
{“@context”:”https://schema.org”,”@type”:”HowTo”,”name”:”How to Register a Foreign Company Branch in India (Section 380)”,”step”:[{“@type”:”HowToStep”,”position”:1,”name”:”Obtain RBI approval”,”text”:”Apply to RBI through the AD banker for approval to establish a Branch Office, Liaison Office, or Project Office under FEMA. Provide parent company details, financial statements, and proposed activities.”},{“@type”:”HowToStep”,”position”:2,”name”:”Establish the place of business in India”,”text”:”Once RBI approves, set up the physical office/branch in India. The 30-day clock for MCA filing starts from this date.”},{“@type”:”HowToStep”,”position”:3,”name”:”File Form FC-1 with ROC”,”text”:”File Form FC-1 (Section 380 registration) with the relevant ROC within 30 days of establishing the place of business. Attach the parent company’s Certificate of Incorporation, MOA/AOA, and list of directors.”},{“@type”:”HowToStep”,”position”:4,”name”:”Obtain Certificate of Registration”,”text”:”ROC issues a Certificate of Registration as a Foreign Company. The company now has an Indian registration number (starting with ‘F’).”},{“@type”:”HowToStep”,”position”:5,”name”:”Annual compliance filings”,”text”:”File Form FC-3 (financial accounts) and Form FC-4 (annual return) annually with the ROC. Maintain a local registered office in India, appoint an authorised representative resident in India, and comply with all applicable FEMA/RBI reporting requirements.”}]}
Foreign Company in India: Section 380 Registration, Branch Office vs WOS and Compliance
A foreign company entering India faces a critical strategic decision before setting up operations: should it register a Branch Office, a Liaison Office, a Project Office, or incorporate a Wholly Owned Subsidiary (WOS)? Each option has different tax implications, liability exposure, permitted activities, and FEMA/RBI compliance requirements. The choice determines not just the immediate registration process but the entire operational and legal framework for the company’s India presence.
Key Takeaways
- A Foreign Company under Section 2(42) must file Form FC-1 with the ROC within 30 days of establishing a place of business in India.
- Branch Office = can earn income; Liaison Office = communication only, no income; Project Office = duration of project only.
- Wholly Owned Subsidiary (WOS) is a separate Indian company — offers the most flexibility and liability protection for the parent.
- Branch/Liaison/Project offices require RBI approval under FEMA before establishment.
- Annual filings: Form FC-3 (accounts) and Form FC-4 (annual return) with the ROC.
In This Article
- What is a Foreign Company under Section 2(42) of the Companies Act 2013?
- What are the entry options for a foreign company in India?
- How do Branch Office, Liaison Office, Project Office and WOS compare?
- What is the Section 380 registration process for a Foreign Company?
- What are the annual compliance obligations for Foreign Companies in India?
- What are the FEMA and RBI compliance requirements for foreign companies?
- How can Tradeviser help foreign companies establish operations in India?
What is a Foreign Company under Section 2(42) of the Companies Act 2013?
Section 2(42) defines a Foreign Company as any company or body corporate incorporated outside India that has an established place of business in India — whether by itself or through an agent, physically or through electronic mode. This definition is broad — even a foreign company with only a website and local agent selling goods in India may technically be a Foreign Company required to register under Section 380.
What are the entry options for a foreign company in India?
Foreign companies have four primary structures to establish an India presence, each governed by a different regulatory framework:
- Liaison Office (LO): Market research and communication channel only. No commercial activity, no income generation in India. Expenses funded by parent through inward remittance.
- Branch Office (BO): Permitted to carry out certain commercial activities, render services, and earn income in India. Taxed as a foreign company branch (not as an Indian company).
- Project Office (PO): Set up for the specific duration of a contract/project (e.g., infrastructure or EPC contracts). Closes automatically when the project ends.
- Wholly Owned Subsidiary (WOS): A separate Private Limited Company incorporated under the Companies Act 2013 with 100% equity held by the foreign parent. Treated as a domestic Indian company for all purposes.
How do Branch Office, Liaison Office, Project Office and WOS compare?
| Parameter | Liaison Office | Branch Office | Project Office | WOS (Pvt Ltd) |
|---|---|---|---|---|
| Income in India? | No | Yes (limited activities) | Project revenue only | Unrestricted |
| RBI approval? | Yes (required before setup) | Yes | Yes (or AD Bank approval) | FDI policy (mostly automatic route) |
| Liability exposure to parent | High (parent responsible) | High | High | Limited (separate legal entity) |
| Tax rate | N/A (no income) | 40% (foreign company rate) | 40% | 22%–25% (domestic rate) |
| Profit repatriation | N/A | After-tax profit, with RBI reporting | After-tax, end of project | Dividend after dividend distribution tax; FCTRS reporting |
| Duration | Renewable (3 years typically) | Renewable | Duration of project | Perpetual (until wound up) |
| Best for | Market research, exploring India entry | Export/import, professional services | Specific contracts (EPC, oil & gas, infrastructure) | Long-term India operations; most sectors |
What is the Section 380 registration process for a Foreign Company?
A foreign company establishing a Branch, Liaison, or Project Office must register with the ROC (Company Registration) under Section 380 within 30 days of establishing the place of business.
- Form FC-1: Filed with the ROC within 30 days. Requires: parent company’s Charter (MOA/Articles equivalent), certificate of incorporation from the country of origin, details of directors and secretary, details of persons authorised to accept service in India, and the address of the India office.
- Documents from outside India must be notarised and apostilled (or consulate-certified for non-Hague Convention countries)
- ROC assigns an India registration number (format: F-XXXXX) — the company is now formally registered as a Foreign Company under Indian law
What are the annual compliance obligations for Foreign Companies in India?
| Form | Purpose | Due date |
|---|---|---|
| Form FC-1 | Initial registration and any subsequent changes in company details | Within 30 days of any change |
| Form FC-3 | Annual accounts (balance sheet, P&L) prepared for the Indian operations | Within 6 months of the close of the financial year |
| Form FC-4 | Annual return listing directors, charges, and registered offices | Within 60 days of the close of the financial year |
What are the FEMA and RBI compliance requirements for foreign companies?
- FCGPR (Form FC-GPR): Must be filed with RBI within 30 days of allotment of shares to a foreign investor in an Indian WOS
- FCTRS: Must be filed when a foreign shareholder transfers shares in an Indian company (secondary market transfer)
- Annual Performance Report (APR): Filed annually by Indian companies with foreign investment
- Repatriation: Dividends and other legitimate income can be repatriated after payment of applicable taxes and RBI reporting
How can Tradeviser help foreign companies establish operations in India?
Tradeviser assists foreign companies with the full India entry process — entity selection advice, WOS/Branch registration, FEMA/RBI compliance, and annual filings (FC-3, FC-4). We help multinational companies choose between the Branch and WOS structures based on their sector, activities, and long-term India strategy.
Set Up Your India Operations
Tradeviser helps foreign companies establish Branch Offices, Liaison Offices, and Wholly Owned Subsidiaries in India — with full FEMA/RBI and Companies Act compliance from day one.
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CA Madhusmita Padal is a Practicing Chartered Accountant with firms based in Odisha and Chennai. She specializes in taxation, company law, and auditing. She is passionate about simplifying complex concepts and making knowledge accessible to all.