Branch Office

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Characteristics

The autonomous branch office (selbständige Zweigniederlassung) fulfills tasks that exceed mere implementation and support-related tasks. It is dependent upon the head office company at the internal level but engages in business activities independently. However, the foreign head office company is liable for the business transactions concluded by the branch.

At the organizational level, autonomous branch offices are to a certain extent independent from the parent company and usually have the following attributes:

  • Management with freedom to act according to their own judgement (i.e. with full power of attorney and power to contract)
  • Own capital resources and bank account
  • Separate accounting

An autonomous branch office can use its own name affix but the company name of the head office must also appear including its legal designation (for example: XY Ltd., branch office, Berlin).

Setting Up an Autonomous Branch Office

Foreign companies can set up an autonomous branch office in Germany if they are entered in a foreign commercial register (or a comparable directory).

The decision to establish a branch office must be made by the managing directors of the head office. The autonomous branch office must be entered in the commercial register and registered with the local trade office.

Registering in the Commercial Register

The application for registration in the commercial register must include detailed information on the foreign company and generally be accompanied by a notarized copy of an excerpt of the commercial register showing the existence of the foreign company and the power of representation of the managing director(s) and the management board as well as from memorandum and articles of association. All documents should be in German certified translation and the notary’s certificate must be authenticated.

Due to the harmonized EC Law, the documentation effort for European companies is fairly modest. For non-European companies it can be extensive, the exact details depending on the foreign company’s residence. The application must be certified and submitted by a notary.

Trade Office Registration

The autonomous branch office must be registered in the trade office before business operations are started. A business license or permit is generally not necessary for registering the business. Only for some business sectors, a permit or authorization may be required. Trade office registration must be submitted on commencement of business at the latest.

Contact:

 

Legal Services and Fairplay

Mr. Sherif Kotb
Head of Investment and Legal Consulting
 (+202) 3333 8477
 (+202) 3336 8786
sherif.kotb [at] ahk-mena.com

Correspondence: English/Arabic

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