A representative office is an office established by a
company or a legal entity to conduct
marketing
Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to empha ...
and other non-transactional operations, generally in a foreign country where a
branch office
A branch office is an outlet of a company or, more generally, an organization that – unlike a subsidiary – does not constitute a separate legal entity, while being physically separated from the organization's main office. Branching is particu ...
or
subsidiary is not warranted. Representative offices are generally easier to establish than a branch or subsidiary, as they are not used for actual "business" (e.g. sales) and therefore there is less incentive for them to be regulated.
They have been used extensively by foreign investors in emerging markets such as
China,
India
India, officially the Republic of India ( Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the ...
and
Vietnam
Vietnam or Viet Nam ( vi, Việt Nam, ), officially the Socialist Republic of Vietnam,., group="n" is a country in Southeast Asia, at the eastern edge of mainland Southeast Asia, with an area of and population of 96 million, making it ...
although they do have restrictions through not being able to invoice locally for goods or services. Consequently, Representative Offices tend to be utilized by foreign investors in fields such as sourcing of products, quality control, and general liaison activities between the Head Office and the Representative Offices overseas. A representative office is known in
France
France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of overseas regions and territories in the Americas and the Atlantic, Pacific and Indian Oceans. Its metropolitan ar ...
as a ''bureau de liaison''.
By country
Ukraine
Foreign companies on purpose to promote products or services in
Ukraine
Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian invas ...
, have the right to open a representative office. Offices are opened in order to promote (less for the purpose of direct and indirect sales) of goods and/or services of the
company, through
advertising campaign
An advertising campaign is a series of advertisement
Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it att ...
s,
market research
Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Ma ...
,
distribution Distribution may refer to:
Mathematics
*Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations
*Probability distribution, the probability of a particular value or value range of a varia ...
support, etc. Under Ukrainian law, Branches & Representative offices are established without constituting a separate
legal entity
In law, a legal person is any person or 'thing' (less ambiguously, any legal entity) that can do the things a human person is usually able to do in law – such as enter into contracts, sue and be sued, own property, and so on. The reason fo ...
. Ministry of Economy of Ukraine is the main authority to register representatives.
Representatives may have a bank account (in local and foreign currency) and obtain a
seal (emblem). Financing received from main office, is fully exempt from income tax if it was properly used by office (inc. salary,
rent payment, advertising campaign, market research, etc).
Registration of representative offices and obtaining a certificate of registration is the basis to obtain a
residence permit for foreign
employees
Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any ot ...
of representative office. Certificate of registration enables a temporary duty and
value-added tax
A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the en ...
(VAT) free
import in Ukraine of property and equipment required.
See also
*
De facto embassy
References
Legal entities
Marketing
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