How to Extend Your Business on Other Markets
Businessmen can expand their companies on foreign markets through several options. For instance, they may register one of the legal entities that are available on those markets; however, they may also opt to incorporate a branch office or a subsidiary, which are two types of business structures that are especially designed for foreign companies expanding on foreign markets. There are various advantages for each of these structures and the selection should be based on the costs associated with the expansion of the company, the liability of the parent company, the types of services or products the company offers and numerous others.
Incorporating a branch/subsidiary
The branch office and the subsidiary are business entities that can be found in all the member states of the European Union (EU), but they may also be set up in Asian countries and other regions. The incorporation procedure varies from country to country, but in Europe, the registration requirements are basically the same, considering that the EU has a unitary legislation.
As a general rule, the registration of a branch in Europe is comprised of specific corporate documents. For example, in Malta and in other European countries, the investors will need to provide a copy of the certificate of incorporation of the foreign company, a copy of the parent company's bylaws and also a certificate of good standing of the parent company. A branch office in Malta must also have a representative, a legal requirement that can also be met in other European countries.
However, the most common way to start a business in most of the countries is by registering a limited liability company (its name may vary depending on the country where the investors will operate). This entity...