What is the difference between a subsidiary and a branch office?

Name: Vijay R Singh & Co.
Address: Office No. 4, Vishal CHSL, D Wing, Sir Mathuradas Vasanji Road, Azad Nagar, Opp. Andheri Gymkhana, Andheri East, Maharashtra, 400069, IN
Telephone: +91 98607 23959

CA Vijay R Singh, FCA
Chartered Accountant · ICAI M.No. 153926 · FRN 136869W

Short answerA subsidiary is a separate Indian company that can do full business and is taxed as an Indian company; a branch office is an extension of the foreign parent, limited to permitted activities, needs RBI approval, and is taxed at higher foreign-company rates. Most investors choose a subsidiary for flexibility.

Subsidiary: separate, flexible

Full operations, Indian company tax rate, easier to run and expand.

Branch: limited, RBI-approved, higher tax

Restricted activities, RBI approval needed, and the higher foreign-company tax rate.

NRI Taxation

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This answer is general information for NRIs, not tax advice. Tax rates, thresholds and forms change with each Finance Act — please confirm the current position for your own facts, or speak to us, before acting.