Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Subsidiary/JV vs office routes
Subsidiary/JV company for real business; branch/liaison/project office for limited, specific activities.
Which to choose
Most investors pick a subsidiary for flexibility and lower tax. See subsidiary vs branch.
Matching the route to the intent
The right route follows what the foreign company actually wants to do. A wholly-owned subsidiary or joint-venture company is the choice for real, ongoing business in India — it can manufacture, sell, hire and contract freely, is taxed at the lower Indian-company rates, and most sectors allow 100% foreign ownership on the automatic route. A liaison (representative) office is only for non-commercial activity — market research, liaison between the parent and Indian parties, brand presence — and can’t earn income in India; it needs RBI approval and is time-bound. A branch office can do a defined set of activities (export and import, professional or consultancy services, representing the parent) but not general manufacturing or retail trading on its own account, needs RBI approval, and is taxed at the higher foreign-company rate. A project office is for executing a specific contract or project in India. For most investors wanting to build a business, the subsidiary wins on flexibility and tax; the office routes suit a toe-in-the-water presence or a single project. Deciding the intended scope and time horizon first — explore, execute one project, or operate fully — points clearly to one of the routes.