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BRANCH AND REPRESENTATIVE OFFICE

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Legally, branch and representative office are not standalone entities but rather extensions of the parent company that established them. This distinction holds significant implications for the status and relationship between the head office and the branch/representative office, as well as for any decisions regarding their use as a corporate vehicle for investment-related issues.

 

A representative office is solely authorized to represent and advocate for the interests of the head office. Consequently, representative office is restricted from engaging in full-scale revenue generating activities in Azerbaijan, but can undertake functions such as marketing or related tasks. In contrast, the branch office is permitted to participate in all commercial activities, mirroring those carried out by the head office, including tasks typically assigned to representative office.

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While a branch office lacks separate legal status, it enjoys the autonomy to independently enter into contracts in Azerbaijan. The head office usually bears responsibility for all obligations lawfully assumed by its branch office.

 

From an investor’s perspective, selecting a representative office over a branch one offers no tangible advantages, except in exceptionally rare cases within regulated industries. Notably, there are no disparities in the registration procedure, timelines or fees between the two mentioned forms. Likewise, there are no discrepancies in taxation, employment regulations or migration matters between branch and representative office.