As foreign companies grow, they seek to expand their business overseas. Establishment of a Branch Office (BO) helps foreign companies to achieve strategic growth by enabling easier management of the business in the particular country or area.A foreign company can set up a Branch Office in India after getting approval from the regulatory authority i.e., Reserve Bank of India (RBI). However, it can earn revenue from the Branch Office only by way of activities allowed by the RBI.
Branch office has been defined as per Companies Act 2013 and FEMA Act 1999.
A Branch Office is an extension of the parent company. It is suitable for foreign companies which are looking to set up a temporary office in India and not planning for long-term operations in India.