Advantages of a representative office
A representative office has several advantages over other ways of representing a company in a foreign market:
Simpler registration and management
Representative offices cannot perform business transactions, which is why in many countries they are not regulated as strictly as other entities.
Ability to open bank accounts
Although representative offices are limited in terms of their functionality, they can still be used to open corporate bank accounts for their parent company in a foreign market.
Simple initial market entry
Representative offices are an advantageous solution if the parent company is not sure whether to expand into a particular foreign market or not, as they allow it to enter the market for initial research without the need to establish supply chains, a customer base, etc.
Bypassing restrictionsIn certain jurisdictions, branch offices and other forms of company representation with the ability to engage in transactions are prohibited or subject to certain limitations. Representative offices are a way to enter the market while bypassing these restrictions.
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