325. Setting up a branch office

in India

Q. Dear Mr. Chand, My sincere thanks to you for maintaining such an informative website. I was going thru the string of questions about how a NRI can start a proprietorship business, but I believe that he/she needs to get a conventional trade license first from India. The next step would be to apply for PAN for the sake of bank account opening, does the PAN need to be in personal name or in company's name? Is the proprietorship business profit easily repatriable to Canada? Or, as we are already running a small business in Canada, should we open a branch office or wholly owned subsidiary in India? Which one would you suggest a better option? Just to let you know I hold the OCI card. Best regards Papia A. Foreign Exchange Management Regulations,2000 framed by the Reserve Bank of India (powers conferred by section 6(6) of FEMA,1999) govern and regulate the establishing of branch or office or any other place of business by a non-resident person. Application to the RBI is made using form FNC 1. To See a sample of Form FNC 1 Click HERE. I am not sure of what business you intent on setting up a branch office for, normally permitted activities of a branch office are: 1. Export/Import of goods. 2. Rendering professional or consultancy services 3. Carrying out research work in which parent company is engaged. 4. Promoting technical or financial collaborations 5. Rendering technical services in Information Technology and development of software in India. 6. Rendering technical support to the products supplied by parent/group companies. 7. Any other activities permitted by RBI A branch office established by a non-resident after seeking approval from RBI is usually permitted to remit profit outside India subject to paying applicable taxes and a Chartered accountants certificate along with a copy of balance sheet and profit and loss account. As for PAN, they are available for individuals as well as for Firm or Company. A CA in India should be able to handle most of the formalities for you and advise you on the best possible option of setting up in India.