Branch Office:

A branch office is an extension of the foreign parent company and conducts business activities similar to those of the parent company. It is legally considered the same entity as the parent company but operates in a different location. Key points about branch offices include:

1. Legal Structure: A branch office is not a separate legal entity from the parent company. Therefore, the parent company is fully liable for the debts and obligations of the branch office.

2. Activities: Branch offices can engage in commercial activities, including sales, distribution, and manufacturing, depending on the permissions granted by local authorities.

3. Regulatory Compliance: Branch offices must comply with the local laws and regulations of the host country, which may include registration, reporting, and taxation requirements.

4. Name: The branch office typically operates under the same name as the parent company, with an indication that it is a branch (e.g., “ABC Company – Branch Office”).

5. Capital Requirements: Some countries may impose minimum capital requirements for establishing a branch office.

Liaison Office (Representative Office):

A liaison office, also known as a representative office, serves as a communication and coordination hub for the parent company’s activities in a foreign country. Unlike a branch office, a liaison office does not engage in commercial activities that generate revenue. Key points about liaison offices include:

1. Limited Activities: Liaison offices are generally restricted to non-commercial activities such as market research, promoting the parent company’s products or services, and facilitating communication between the parent company and local entities.

2. Legal Status: A liaison office is not a separate legal entity from the parent company. Therefore, it cannot enter into contracts or conduct business transactions on behalf of the parent company.

3. Regulatory Compliance: Liaison offices must comply with local regulations, including registration and reporting requirements. However, they are often subject to fewer regulatory obligations compared to branch offices.

4. Name: Liaison offices typically operate under the name of the parent company, followed by an indication that it is a liaison office or representative office.

5.Funding: Liaison offices are generally funded by the parent company and do not generate revenue independently.