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Advantages of a representative office (30th Mar 23 at 10:29am UTC)
A representative office has several advantages over other ways of representing a company in a foreign market:

Easier registration and management
Representative offices cannot conduct business transactions, which is why they are not as strictly regulated as other companies in many countries.
Ability to open bank accounts
Although representative offices are limited in their functionality, they can still be used to open corporate bank accounts for their parent company in a foreign market.
Easy first market entry
Representative offices are an advantageous solution when the parent company is unsure whether or not to expand into a specific foreign market, as they allow it to enter the market for initial research without the need to establish supply chains, a customer base, etc .
circumvent restrictions
In certain jurisdictions, branch offices and other forms of corporate representation with the ability to conduct transactions are prohibited or subject to certain restrictions. Representative offices are a way to enter the market bypassing these restrictions.
Disadvantages of a representative office
A representative office also has certain disadvantages:

Inability to do direct business
A representative office cannot carry out transaction-related business in a foreign market, so another form of company representation must be set up for this. This can cause delays and additional expenses, potentially costing the company its competitive edge.
staffing restrictions
Certain jurisdictions limit the number and status of a representative office's employees, some requiring that one or a certain number of employees be employees of the parent company and/or restricting the branch's ability to hire local staff.
period of validity
Depending on the jurisdiction, a representative office may be limited in its validity, i. H. after a certain period of time (usually a few years) it has to be closed and re-registered, while other forms of company are usually valid indefinitely.

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