Branch / Liason Office India-New Guideline By Rbi

The Reserve Bank of India (RBI) has added two new conditions for allowing a foreign entity to open a branch or liaison office in India. These two requirements are profit-making track record and a minimum net worth criteria.

As per the new criteria, foreign entities considering opening a branch or liaison office in the country should have made profits in the past five years and three years, respectively in their home country.

Similarly, a foreign entity should have a minimum net worth of US$10,000 for opening a branch in India, and at least US$50,000 for a liaison office. Branch or liaison offices are usually opened by foreign companies before they form a joint venture or a 100% subsidiary in India.

The two new conditions are in addition to the existing criteria, where an approval is granted under the RBI route and and Government route.