Establishment of representative offices and branches of foreign companies

May 20, 20220

A legal entity, to put it simply, is a company engaged in any activity – a group of people who have common interests. As noted, the creation of such companies is based on the common interests of individuals, which may differ. At this point, although the economic interests, thus the interests of the parties to obtain any income, prevail, there are also companies created for non-profit purposes. Depending on the type of interests and activities of companies, they are classified as commercial legal entities, the main purpose of which is to make a profit, or non-profit legal entities whose main purpose is not to make a profit and do not distribute the profits among the participants. The Civil Code of the Republic of Azerbaijan also distinguishes public legal entities as the third type of legal entities, which are the organizations engaged in activities of national and (or) public importance.

  1. Foreign legal entity and its representative offices and branches

Foreign legal entity means legal entities established outside the Republic of Azerbaijan. They can operate by establishing their branches and representative offices in other countries. In this regard, the concepts of representation and branch need to be clarified. According to Article 53 of the Civil Code of the Republic of Azerbaijan, a representative office is a separate unit located outside the legal entity and representing and protecting the interests of the legal entity. In the same article, the concept of a branch is defined as a separate unit located outside the location of the legal entity and performing all or part of its functions, including representative functions. Branches and representative offices of foreign legal entities may operate in the territory of the Republic of Azerbaijan after the state registration.

  1. State registration of representative offices and branches of foreign legal entities

State registration of legal entities means approval of the legal capacity of organizations wishing to obtain the status of a legal entity in the country, as well as representative offices or branches established by foreign legal entities in the territory of the Azerbaijan Republic, determination of their legal status and inclusion of information in the single state register of legal entities. State registration is carried out by the Main Department of National Revenues of the State Tax Service and ASAN service centers, respectively. The state fee for the service is 300 manat.

The following documents must be submitted for state registration of representative offices and branches of foreign legal entities:

  1. Notarized “Application for state registration of a commercial organization”;
  2. “Information on founding legal entities”;
  3. Regulations approved by the foreign legal entity establishing the representative office or branch or its authorized representative (in 2 copies);
  4. Decision of the foreign legal entity establishing the representative office or branch;
  5. Original or notarized copy of the decision of the foreign legal entity establishing the representative office or branch on the appointment of the head of the representative office or branch (with a copy of the identity document);
  6. Documents confirming the registration of a legal entity that is the founder of a representative office or branch abroad – a notarized copy of the registration certificate (extract from the register) and other documents (subject to the Hague Convention of 1961 abolishing the requirement to legalize foreign official documents));
  7. A document confirming the legal address of the representative office or branch;
  8. Document confirming payment of state duty (receipt);
  9. Original or notarized copy of the power of attorney issued by the foreign legal entity establishing the representative office or branch (subject to legalization (taking into account the Hague Convention of 1961 abolishing the requirement to legalize foreign official documents));
  10. “Information on the application of the special tax regime” (if the representative office or branch will operate under the special tax regime);
  11. Identity card of the applicant;
  12. Power of attorney (if the application is signed by the attorney);
  13. Document confirming the initial consent of the Central Bank and the Ministry of Finance, respectively, in the establishment of representative offices or branches of foreign banks and insurance companies.

The ACON team would be pleased to be with you in all legal processes related to the registration of a branch or representative office of a foreign legal entity in the Republic of Azerbaijan!

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