Branch Office - Index
A branch is one way for a company to set up a business in most countries. However a branch office does carry disadvantages.
The disadvantages of a branch office are:
- The parent company is fully liable for the liabilities of the branch
- The branches representatives may be held jointly and severally liable for tax debts
- The financial statements of the parent must normally be filed at the Companies Registry
- With the introduction of the European Company the Societas Privata Europaea (SPE) there will be less need to establish branches
- The branches obligations are the same as the parent, including filing VAT returns, employees returns and corporation tax returns, so there are few savings in administering a branch
- Banks and your clients may prefer dealing with an incorporated company rather than a foreign branch
- A branch is rarely ideal for substantial projects because the parent company runs the entire risk
- Upon registration of a branch, evidence has to be provided of the legal existence of the parent
- Any public act by the branch, is likely to need ratification by the board of the foreign parent. A company that signs contracts in front of a notary on a regular basis, should incorporate for administrative ease
The advantages are:
- Less obligations to present accounts than with corporations
- A branch is usually an adequate vehicle for low risk projects
|Please select from the list to find out about Branch offices in the following countries:|
|Greece||United Arab Emirates|
Features of a Branch Office
A branch is usually suitable for low cost ventures. As the parent company and the branch carry the same and shared risk, the parent remains fully liable for all liabilities.
From a tax perspective, branches are permanent establishments of non-resident companies and a foreign branch is not a separate entity from its parent.
A branch of a non-resident company must appoint aresident individual or a company to represent it in dealings with tax authorities. The representatives may be held jointly and severally liable for the tax debts of the permanent establishments ofnon-resident entities, which they represent.
To register a branch, evidence has to be provided of the existence of the parent, certified copies of the Articles or Statues, the names of the directors, the share capital, the registered office, and the names of the representatives who will act for you.
Various documents will need to be translated, the documents include:
- Your parent's registration certificate
- Your company's articles of association
- The names of the company's directors and secretary
After your branch is registered
All stationery, order forms and similar documents used by your branch are required to show:
- The place of registration of the parent
- The number with which it is registered
- The legal classification of the company
- The address of its registered office
- The place of registration of the branch, and its registration number
Also the following particulars must be shown at the branch office:
- The company name
- The name of the country in which the company is incorporated
- The parent of the branch has limited liability