Entry Structures Compared
Branch vs Liaison vs Project Office vs Subsidiary in India
All six vehicles a foreign company can use to enter India — compared on legal status, permitted activities, tax, repatriation, compliance and setup time.
Last reviewed: July 2026 · Reviewed by CA Regi Tom Antony, Regi Tom Antony & Associates.
Which India entry structure should a foreign company choose?
Choose by what you need to do. If you only need presence and market research, a liaison office suffices. If you must deliver one awarded contract, use a project office. If you need to earn revenue, hire, own intellectual property and limit liability, incorporate a wholly owned subsidiary. Use a joint venture where the sector caps FDI, and an LLP for professional services.
Full comparison of the six India entry vehicles
The table below compares all six vehicles on the criteria that actually decide the choice: legal status, permitted activities, ability to earn revenue, the FDI or RBI approval route, taxation, profit repatriation, compliance burden and typical setup time, as of 2026.
| Criterion | Liaison / Representative Office | Branch Office | Project Office | Wholly Owned Subsidiary (Pvt Ltd) | Joint Venture (Pvt Ltd) | LLP |
|---|---|---|---|---|---|---|
| Legal status | Extension of the foreign company; not a separate legal entity | Extension of the foreign company; parent bears unlimited liability | Extension of the foreign company, tied to one contract | Separate Indian company; limited liability | Separate Indian company shared with an Indian partner | Separate body corporate under the LLP Act, 2008 |
| Permitted activities | Liaison, market research, promotion, coordination only | Export/import, professional or consultancy services, research, technical support; no retail trading or manufacturing directly | Execution of a specific awarded project only | Any lawful business within its objects | Any lawful business within its objects | Any lawful business; no share capital or ESOPs |
| Can earn revenue in India? | No — cannot earn any income in India | Yes — within the permitted activities | Yes — under the project contract | Yes — full commercial freedom | Yes | Yes |
| FDI / RBI approval route | FEMA / RBI Master Direction; Form FNC via AD Category-I bank | FEMA / RBI Master Direction; Form FNC via AD Category-I bank | FEMA / RBI Master Direction; general permission where the project is funded as prescribed | 100% FDI under the automatic route in most sectors — FEMA (NDI) Rules, 2019 | Automatic or government route by sector; shareholders' agreement critical | 100% FDI automatic only where the sector has no FDI-linked performance conditions |
| Taxation | Generally no India tax if genuinely non-income-earning; annual certificate required | Taxed as a foreign company — higher rate (~40% plus surcharge and cess) | Taxed as a foreign company on project income; PE by definition | Domestic company rates; concessional regimes may apply | Domestic company rates | Taxed at the LLP rate; no dividend mechanics, profit share exempt in partners' hands |
| Profit repatriation | Not applicable — funded by inward remittance from the parent | Post-tax profits remittable with CA certification | Surplus remittable on completion, with CA certification | Dividend, royalty, fees and interest, subject to Section 195 TDS | Dividends pro rata to shareholding | Profit share remittable, subject to withholding review |
| Compliance burden | Moderate — AAC, ROC Form FC-1/FC-3, tax return | High — audit, AAC, ROC filings, transfer pricing | High but finite — closes with the project | Standard company stack — audit, AOC-4, MGT-7, FLA, FC-GPR | Company stack plus JV governance and deadlock mechanics | Lighter — Form 8 and Form 11; audit above thresholds |
| Typical setup time | 6–10 weeks | 6–12 weeks | 4–8 weeks | ~7–15 working days after apostille | ~4–10 weeks including negotiation | ~2–4 weeks |
| Best for | Testing the market before committing | Service delivery or project work without an Indian company | EPC, turnkey and infrastructure contracts | The default for most foreign entrants | Sectors with FDI caps or a needed local partner | Professional and services firms not raising equity |
Positions are general and as of 2026. Sector caps, FDI-linked performance conditions and Press Note 3 restrictions for investors from land-bordering countries can change the route for a specific case.
Can a liaison office earn revenue in India?
No. A liaison office is permitted only to represent the parent, promote its business, gather market information and act as a communication channel. It cannot invoice, trade, or undertake any income-earning activity, and it must be funded wholly by inward remittances from the parent through normal banking channels, with an annual activity certificate filed each year.
Liaison — presence only
Cheapest way to be visibly in India. Any commercial activity converts it, in substance, into a taxable presence.
Branch — taxed as foreign
Earns revenue but at the foreign-company rate (~40% plus surcharge and cess), with unlimited parent liability.
Project — one contract
Exists for a specific awarded project and closes with it; a permanent establishment by definition.
Subsidiary — the default
Domestic tax rates, limited liability, 100% FDI automatic in most sectors, clean dividend repatriation.
How we run the structure decision
Structure follows activity, sector and exit. We work backwards from what you will actually do in India, test the sector against the FEMA (NDI) Rules, 2019, and price the tax and repatriation consequences before recommending a vehicle — because converting a branch into a subsidiary later is expensive.
- 1
Define the India activity
Selling, delivering, researching or manufacturing — this alone eliminates three of the six vehicles in most cases.
- 2
Test the sector and investor
Sector caps, FDI-linked performance conditions and Press Note 3 for land-bordering investors under the FEMA (NDI) Rules, 2019.
- 3
Price the tax outcome
Domestic company rates for a WOS or JV versus the foreign-company rate for a branch or project office, including surcharge and cess.
- 4
Model the money out
Dividend, royalty, interest or branch profit remittance, each with its Section 195 withholding and treaty position.
- 5
Choose and incorporate
SPICe+ for a company, or Form FNC through an AD Category-I bank for a liaison, branch or project office.
- 6
Close out the reporting
FC-GPR within 30 days for a company; annual activity certificates and ROC Forms FC-1/FC-3 for an office.
Go deeper on each vehicle
Detailed guides: wholly owned subsidiary, liaison, branch & project offices, joint venture company and LLP for foreign partners. For the approval route see FDI entry routes & sector caps, for the process see foreign company formation in India, and for the money out see profit repatriation from India.
Frequently asked questions
What is the difference between a subsidiary and a branch office in India?
Which India entry structure is best for a first-time foreign entrant?
Can a liaison office earn revenue in India?
Is a wholly owned subsidiary or an LLP better for a foreign company?
Do branch and liaison offices need RBI approval?
Reviewed by CA Regi Tom Antony, Regi Tom Antony & Associates. Last reviewed: July 2026. Positions described are as of 2026 and are general guidance, not advice on your facts.
Pick the right India structure the first time
Converting a branch into a subsidiary later costs far more than choosing correctly now.