BRANCHING OUT
A foreign company wanting to operate in any Nordic country without establishing a subsidiary (like a LLC) may open a branch. A branch is a foreign company’s local office in that country with its own administration and corporate identity number.
A BRANCH IS NOT A LLC
A branch is part of a foreign-based company and is not a legal entity. If a foreign company wishes to carry on business in the Nordics, it can do so through a branch. You do not get a LLC by registering a branch. A branch has a corporate identity number and is subject to local law but it is not a legal entity.
Make sure you know about the requirements for starting a branch and for the foreign-based company before you register a branch.
If you choose to register a branch, there are requirements to be met for both the branch and the foreign-based company connected to it. Here are some examples:
- The branch must keep its own accounting records, kept separate from the foreign-based company
- Every year the branch must file an annual report for the foreign-based company and in some cases for the branch as well
- The branch has to have a Managing Director residing in a EEA country
- Taxes and other charges must be paid as required
- The foreign-based company must follow the applicable local rules
Don’t hesitate to reach out to Nordic GEM before registering your branch. We can help you with everything related to the registration of your branch in any Nordic jurisdiction.
TYPICAL FEATURES OF A BRANCH
- A branch is not a separate legal entity, it is a part of the foreign-based company
- A foreign company may only have one branch in each Nordic jurisdiction
- The foreign-based company shall appoint a Managing Director to run the business activities
- The Managing Director represents the branch and is responsible for registering the branch with local authorities
- A branch is subject to local law and the decisions of local authorities regarding legal matters in connection with its business activities in that particular jurisdiction
- A branch has no independent capital and its assets and liabilities are a part of the total assets of the foreign-based company
- A branch is to keep its own accounting records, and these are to be kept separate from the foreign-based company
- The accounts of a branch and the administration of the Managing Director are, when required, subject to examination by an authorized or approved public accountant
- When a branch has been registered with local authorities, it receives a unique corporate identity number
