Branch Office - Index

A branch is one way for a company to set up a business in most countries. Opening a branch has many drawbacks, mainly that the foreign parent carries full liability for the branches operations and that lengthy and complicated dealings with the tax authorities may be needed regarding the branches tax obligations.

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

Branch Offices
Please select from the list to find out about Branch offices in the following countries:
	Austria		Ireland
	Bahamas		Italy
	Belgium		Luxembourg
	Bermuda		Malta
	Bulgaria		Mexico
	Canada		Netherlands
	Costa Rica		Panama
	Cyprus		Poland
	Czech Republic		Serbia
	Denmark		Seychelles
	Egypt		Singapore
	Estonia		Spain
	France		Sweden
	Germany		Switzerland
			Turkey
	Greece		United Arab Emirates
	Hong Kong		UK

Features of a Branch Office

A branch is usually suitable for low cost ventures, however, it is not the ideal choice for substantial ventures because the parent company and the branch carry the same and shared risk and therefore the parent is fully liable for the branches liabilities.

From a tax point of view, branches are permanent establishments of non-resident companies and a foreign branch is not a separate legal company from its parent.

A branch of a non-resident company must appoint a resident individual or a company to represent it in its dealings with the tax authorities. The representatives may be held jointly and severally liable for the tax debts of the permanent establishments of non-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