Companies do not always carry out their business activities in one location. As they grow, they may expand into new regions for strategic or operational reasons. This often creates the need to establish branches or representative offices. Such structural units may be created for several reasons, including:
For local companies in Azerbaijan, establishing a branch or representative office can help expand operations, move closer to customers and create certain legal and economic advantages. This can be especially important for growing companies that want to strengthen their regional presence.
The company must first decide which type of structural unit it wants to establish, because branches and representative offices have different functions.
The legal framework for establishing branches and representative offices in Azerbaijan is mainly regulated by:
The Civil Code defines the legal status of branches and representative offices. The Law on State Registration and State Register of Legal Entities regulates the procedures for their establishment and registration. The Tax Code sets out the requirements related to tax registration and tax obligations.
Are you planning to open a branch or representative office to expand your business? Accounting.Az can help you complete the required legal procedures correctly and efficiently
According to Article 53.1 of the Civil Code, a representative office is a separate division located outside the legal entity’s registered location that represents and protects the interests of the legal entity.
In other words, a representative office:
According to Article 53 of the Civil Code, a branch is a separate division located outside the legal entity’s registered location that performs all or part of the legal entity’s functions, including representative functions. In other words, a branch:
The main purpose of a branch is to expand the company’s operations and provide certain services locally.
Local companies in Azerbaijan can establish branches and representative offices in two ways:
Branches and representative offices operate on the basis of regulations approved by the legal entity. The legal entity appoints the heads of its branches and representative offices and issues them a power of attorney to represent the company’s interests and perform the relevant functions.
The decision to establish a branch or representative office is adopted by the general meeting of the company’s participants. If the company has only one founder, a written decision of that founder is sufficient. The decision usually includes:
When choosing the name, it should include the word “branch” or “representative office” and clearly indicate the company to which the structural unit belongs.
When establishing a branch or representative office, it is important to note that information about the structural unit must be included in the State Register of Legal Entities. Branches and representative offices of legal entities registered in the Republic of Azerbaijan are entered into the State Register free of charge. Changes to information about these branches and representative offices are also entered into the State Register without a state fee.
The process is carried out in accordance with Chapter III, “State Register of Legal Entities,” of the Law on State Registration and State Register of Legal Entities.
To register a taxpayer’s business unit, an application must be submitted to the relevant local office of the State Tax Service. A document confirming the address where the business activity will be carried out must also be attached to the application.
If significant deficiencies are found in the documents, the applicant is informed and given an opportunity to correct them.
Once the deficiencies have been corrected and there are no grounds for refusal, the business unit’s registration information is entered into the taxpayer register. Foreign legal entities may also establish branches and representative offices in Azerbaijan. Information about the state registration of branches and representative offices of foreign legal entities is available here.
Establishing and registering a branch or representative office requires the preparation of a number of legal documents. To save time and simplify the process, you can contact our specialists.
The Accounting.Az consulting team can assist you with the registration process and preparation of the required documents. You can contact us using the communication method that is most convenient for you!
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