Establishment of branches and subsidiaries


Germany

The reasons for the establishment of company branches or subsidiary companies...

... are as varied as the corporate landscape in Germany: an expansion or spin-off of business areas that no longer form part of the core business operations, preparation of corporate transactions, or tax optimisation are just a few of the reasons to establish a subsidiary company.

  1. Subsidiary companies
  2. Company branches
  3. Differentiation as a permanent establishment
  4. Representative office – contrary to German law
  5. Tax law when establishing new locations
  6. Company registration and the trade register
  7. International structure

1. Subsidiary companies

A legal way to create a new site for a company is the establishment of subsidiary companies. This gives rise to a legally independent company that can also assume a separate corporate structure. It is essential to undertake a review of the parent company that is outsourcing a part of its business activities: although the two companies will be legally independent, they will be considered to be affiliated companies under corporate law, which necessarily gives rise to antitrust and tax implications.

2. Company branches

In contrast to a subsidiary company, a company branch is not legally independent – this is the decisive criterion in distinguishing the two. A company branch legally remains a part of the principal place of business. In terms of actual organisation, however, the branch is autonomous and is represented to the outside as an independent company. Whether the establishment of a branch is actually possible depends on the corporate structure of the company: it is only relevant for merchants and trading companies.

3. Differentiation as a permanent establishment

Liability is an essential aspect when starting a business. Depending on the choice of company structure, liability is not limited to the assets of the company: in partnerships it extends to the personal liability of the shareholder, even including their private assets. Our legal advice for new businesses will analyse the risks of the business project and steer it along a legal route in which the risk of the company's founder remains predictable.

4. Representative office – contrary to German law

Outside of Germany, a representative office is another common way of founding a new company location. In German law, this variant for the establishment of a new location does not, however, exist.

5. Tax law when establishing new locations

It is not just the actual organisation of the new location and the motives involved that are decisive in choosing the structure of a new company or part thereof. The implications of tax and antitrust law have a considerable impact on this decision. The lawyers and tax advisors at our law firm will consider these aspects and provide you with meaningful advice about your business from the very first consultation.

6. Company registration and the trade register

The other requirements for registration of a business, such as any industry licensing requirements or registration in the commercial register, will differ according to the structure of the new location. This means that the establishment of subsidiary companies needs to be entered in the commercial register along with relevant business registration, as part of which any licensing duties must be respected. A secondary establishment must also be registered. Our lawyers will also advise on the formal requirements for any decisions concerning the main business and any special requirements relating to corporate enterprises.

7. International structure

Thanks to our locations in Germany, Austria, Liechtenstein, Switzerland and Italy, our lawyers and tax advisors are very experienced in providing advice on the establishment of company branches and subsidiary companies abroad. Our consultants will take into account any differences in other jurisdictions and will take note of any special features and the relevance of business transactions in Germany when consulting clients on their foreign companies.

Contact

As experts in establishing company branches and subsidiary companies, we are ready to work with you. Get in touch!


Austria

The reasons to establish a subsidiary company or company branches...

... are as varied as the corporate landscape in Austria: an expansion or spin-off of business areas that no longer form part of the core business operation, preparation of corporate transactions, or tax optimisation are just a few of the reasons for the establishment of company branches.

  1. Subsidiary companies
  2. Company branches
  3. Differentiation as a permanent establishment
  4. Representative office
  5. Tax law when establishing new locations
  6. Business registration and the register of companies
  7. International structure

1. Subsidiary companies

Businesses outsource and open up new locations – there can be many reasons for founding subsidiary companies. Although this creates a legally independent company, the legal form of the parent undertaking plays an important role – under corporate law such companies are deemed to be linked. In certain cases, liability claims upheld against the subsidiary company may also affect the parent company. The establishment of subsidiary companies therefore requires careful structuring from a corporate, antitrust and tax perspective.

2. Company branches

Unlike subsidiary companies, the establishment of company branches means they are not legally independent and thus remain a part of the parent company, regardless of location. Nevertheless, in organisational terms it is an independent establishment and acts as its own company. The establishment of a company branch is dependent on the specific corporate requirements of the parent company and can only be taken into consideration for merchants and trading companies.

3. Differentiation as a permanent establishment

A further option is the establishment of a permanent establishment, i.e. the setting up of a fixed place of business through which the activities of an enterprise are wholly or partly carried out. A permanent establishment can therefore be a place of management, an operational office or a factory, but could also be a permanently installed machine or market stand. A permanent establisment is fully dependent on the main business for its activity and it could not exist without it.

4. Representative office

What is often meant by representative office is an organisational unit of an internationally active company that serves both to initiate business transactions and provide customer service. Austrian law does not provide for a specific legal form for this type of establishment.

5. Tax law when establishing new locations

Tax and antitrust considerations are of vital importance for the structure of any new locations. A thorough legal and economic analysis helps to reap the possible benefits and develop an optimum tax structure. We have extensive expertise in this area and will be happy to advise you. You can read more about tax law here.

6. Business registration and the register of companies

Depending upon the nature and structure of the establishment of additional business units, different formal requirements need to be fulfilled. Subsidiary companies must be entered in the register of companies and require their own business registration. A secondary establishment must also be registered. Our lawyers will advise on all of these issues and can provide competent advice on the formal requirements for any decisions concerning the main business and any special requirements relating to corporate enterprises.

7. International structure

Our locations in Austria, Germany, Liechtenstein, Switzerland and Italy enable us to provide both a comprehensive and competent consultation service in several jurisdictions. Our lawyers and tax consultants have many years of experience in establishing new locations abroad and have specialist knowledge of the local details necessary for advising foreign clients.

Contact

We will be right by your side for all of these issues and more when you establish a subsidiary company or company branch in Austria! Get in touch!


Liechtenstein

There are many reasons for planning the establishment of subsidiary companies and/or company branches in the Principality of Liechtenstein, the sixth-smallest country in the world.

One reason may be to develop new markets, as well as the outsourcing of business areas. It can often make sense to establish a subsidiary company or company branch when preparing for business transactions and for tax optimisation. The cross-border experience of the Viehbacher law firm offers significant added value and a competitive advantage when you are looking into the establishment of subsidiary branches and company subsidiaries abroad. Allow us to advise you!

  1. Subsidiary companies
  2. Secondary establishments
  3. Permanent establishments
  4. Representative office
  5. Tax law & the establishment of subsidiary companies and company branches
  6. Business registration and entry in the commercial register
  7. Cross-border activities - internationalisation

1. Subsidiary companies

The obvious option to expand your company is to establish a new, independent company. This is a legally distinct company that operates independently of its parent company, the structure of which can and should be based on its own specific requirements. Nevertheless, the facilities of this newly created company are regulated and developed by the parent company. In relation to this, it is important to avoid or prevent negative tax consequences, both for the parent company and for the subsidiary companies. Likewise, when it comes to the establishment of a subsidiary company, it is important to assess the consequences for the parent undertaking. It might be the case that the establishment of subsidiary companies requires a change in form of the parent company. In addition to providing comprehensive advice, our lawyers and tax advisors can help you implement the most appropriate solution for you.

2. Secondary establishments

Another form of expansion is the creation of a secondary establishment. In contrast to subsidiary companies, only a commercially operated part of your company can be formed as a secondary establishment. As with subsidiary companies, a certain level of independence is also inherent with this business form. One such requirement is that the secondary establishment carries out its activity in its own premises. In addition, the activities of the secondary establishment must be identical to those of the company. The necessary inherent business and material independence means that, in particular, the secondary establishment could be continued or managed as a stand-alone enterprise without any major changes needing to be made. Depending on the nature of your business – a domestic Liechtenstein company, a main company with headquarters in the EEA, or a main company outside of the EEA – it is important to note the different regulations of the Commercial Register Ordinance (HRV) and the Liechtenstein Person and Company Law (PGR) in relation to the registration of the company. Our lawyers will advise and assist you with the necessary formalities.

3. Permanent establishments

The lawful exercise of a trade, insofar as it is a commercial enterprise, is dependent on the commercial approval of the Office for Economy in the Principality of Liechtenstein. In addition, an appropriate permanent establishment is required to exercise a trade. The concept of a permanent establishment in Liechtenstein is only defined in Article 2 of the Taxation Law (SteG). It is essential at this stage to take comprehensive advice in order to avoid any unpleasant surprises from the tax office. Our lawyers and tax consultants will point out any potential problems and put in place appropriate solutions for you. Please contact us in this regard.

4. Representative office

Pursuant to Article 239 of the PGR, legal persons and trust companies in Liechtenstein have to appoint a representative. The same applies to secondary establishments of foreign companies. In accordance with Article 241 PGR, a representative is an authorised receiving agent for all declarations and notifications from the judicial & administrative authorities.

What should be noted is that the representative represents your company to the outside only to the extent to which you or the company have authorised them, in accordance with Article 241, para 2 PGR. Representation in this way does therefore not create a right of representation. Rather, this ensures that you will be informed of all judicial or official administrative communications.

5. Tax law & the establishment of subsidiary companies and company branches

There are many reasons for the establishment of company branches and/or subsidiary companies in the Principality of Liechtenstein. The position on taxation, and how it is implemented, is just as important as the legal aspects when establishing subsidiary companies or company branches. Our lawyers and tax consultants will take into account both the legal and tax aspects from the very beginning, in order that they may implement sensible and meaningful solutions.

6. Business registration & entry in the commercial register

Your subsidiary company or secondary establishment will only be created in Liechtenstein once it has been entered in the commercial register (public register). A trading company will also require a trade license to perform commercial activities. Our lawyers will assist you in the drafting of the commercial application and all additional and necessary formalities.

7. Cross-border activities - internationalisation

Our law firm is represented by offices in Liechtenstein, Germany, Austria, Italy, and Switzerland. As a result, you can also rely on our lawyers and tax consultants to provide you with comprehensive support in your business enterprises in neighbouring countries. Our experts already have a clear view of the different legal systems and can advise you on new locations. This means that you concentrate fully on what is really important – the success of your business!

Contact

We will provide you with competent support in establishing your subsidiary companies and/or company branches. Our consultants in Triesen are looking forward to hearing from you!


Switzerland

The reasons for the establishment of company branches or subsidiary companies are as varied as the corporate landscape: an expansion or spin-off of business areas that no longer form part of core business operations, preparation of corporate transactions, or tax optimisation are just a few of the reasons for establishing new locations. Switzerland can offer numerous advantages for foreign entrepreneurs. The multilingual and cosmopolitan Swiss Confederation is an ideal hub in which to establish a subsidiary company in the heart of Europe.

  1. Subsidiary companies
  2. Secondary establishments
  3. Differentiation as a permanent establishment
  4. A representative office – a gentle market entry
  5. Tax law when establishing new locations
  6. Company registration and the trade register
  7. International structure

1. Subsidiary companies

A legal way to create a new location for a company is the establishment of subsidiary companies. This gives rise to a legally independent company that can also assume a separate corporate structure. It is essential to undertake a review of the parent company that is outsourcing a part of its business activities; although the two companies will be legally independent, they will be considered to be affiliated companies under corporate law, which necessarily gives rise to antitrust and tax implications.

2. Secondary establishments

In contrast to a subsidiary company, a secondary establishment is not legally independent – this is the decisive criterion in distinguishing the two. A secondary establishment legally remains a part of the principal company. In terms of actual organisation, however, it is autonomous and is represented to the outside as an independent company. A prerequisite for the establishment of a secondary establishment is the existence of a business enterprise as the main company. A Swiss secondary establishment can occur in many forms. The headquarters can be located in Switzerland or abroad.

3. Differentiation as a permanent establishment

Another alternative option is the creation of a permanent establishment. This is possible for companies who do not wish to set up their own operational management at the chosen location, and might represent the scenario of small business operators or non-independent sales outlets. A permanent establishment is fully dependent on the main business operation for its activity and cannot exist without it. Our lawyers will take a look at your business with you and find the right structure to help you achieve your goals.

4. A representative office – a gentle market entry

If you would like to test the Swiss market, you can set up a representative office with your own postal address and telephone number. In comparison with establishing subsidiary companies or a secondary establishment, there is a much lower cost involved with the opening of a representative office. Whether your representative office in Switzerland is recorded as a permanent establishment, and thus becomes tax-relevant, is determined by the type of business you want to undertake. We will advise you on the best form for your corporate presence in the Switzerland.

5. Tax law when establishing new locations

It is not just the actual organisation of the new location and the motives involved that are decisive in choosing a structure of a new company or part thereof. The implications of tax and antitrust law have a considerable impact on this decision. The lawyers and tax advisors at our law firm will consider these aspects and provide you with meaningful advice about your business from the very first consultation.

6. Company registration and the trade register

The other requirements for registration of a business, such as any industry licensing requirements or entry in the commercial register, will differ according to the structure of the new location. A subsidiary company and a secondary establishment both require an entry in the commercial register. A simple representative office generally does not require registration. Our lawyers will also advise on the formal requirements for any decisions concerning the main business and any special requirements relating to corporate enterprises.

7. International structure

Thanks to our office locations in Germany, Austria, Liechtenstein, Switzerland and Italy, our lawyers, trustees and tax advisors are very experienced in providing advice on the establishment of subsidiary companies or the founding of new business locations abroad. Our consultants will take into account any differences in other jurisdictions and will take note of any special features and relevance of business transactions in Switzerland when consulting clients on their foreign companies.

Contact

As experts in establishing company branches and subsidiary companies in Switzerland, we are ready to work with you. Get in touch!


Italy

Our information in the English language concerning establishment of branches and subsidiaries in Italy is currently still being developed. We kindly ask for your understanding. Therefore, please do not hesitate to contact us directly with your queries and concerns. For over ten years now, we have been guiding clients in five different countries on establishing branches und subsidiaries. With us you are always competently advised and well represented. We look forward to receiving your message or call!

Your contact persons

Uwe Bruckner, Dipl.-Kfm., Steuerberater, Fachberater für Internationales Steuerrecht

» Uwe Bruckner

Dipl.-Kfm.,Tax Consultant, Specialist Advisor for International Tax Law

email: u.bruckner@viehbacher.com

Yuanjing Ma, LL.M., China Consultant

» Yuanjing Ma

LL.M., China Consultant

email: y.ma@viehbacher.com

Siegrid Rosenauer, Dipl.-Kffr., Steuerberaterin Österreich, Steuerberaterin Deutschland, Fachberaterin für Internationales Steuerrecht, Wirtschaftstreuhänderin

» Siegrid Rosenauer

Dipl.-Kffr. Tax Consultant for Austria Tax Consultant for Germany Specialist Advisor for International Tax Law Commercial Trustee

email: s.rosenauer@viehbacher.com

Your contact persons

Mag. Florian Proxauf, Rechtsanwalt

» Mag. Florian Proxauf

Lawyer

email: f.proxauf@viehbacher.com

Siegrid Rosenauer, Dipl.-Kffr., Steuerberaterin Österreich, Steuerberaterin Deutschland, Fachberaterin für Internationales Steuerrecht, Wirtschaftstreuhänderin

» Siegrid Rosenauer

Dipl.-Kffr. Tax Consultant for Austria Tax Consultant for Germany Specialist Advisor for International Tax Law Commercial Trustee

email: s.rosenauer@viehbacher.com

Dr. Lothar Stix, LL.M., LL.M., Rechtsanwalt

» Dr. Lothar Stix

LL.M., LL.M., Lawyer

email: wien@viehbacher.com

Your contact persons

Michaela Berger, Steuerexpertin, Treuhänderin mit eidg. Fachausweis

» Michaela Berger

Tax Consultant and Trustee with Federal Professional Certification

email: m.berger@viehbacher.com

Max Gross, LL.M., zugelassener Treuhänder und Steuerexperte

» Max Gross

LL.M. Certified Trustee and Tax Consultant

email: m.gross@viehbacher.com

Dr. Christian Presoly, Rechtsanwalt

» Dr. Christian Presoly

lawyer

email: c.presoly@viehbacher.com

Lic. iur. Daniel R. Tschikof, LL.M., Rechtsanwalt

» Lic. iur. Daniel R. Tschikof

LL.M., Lawyer

email: d.tschikof@viehbacher.com

Your contact persons

Peter Fröhlich, Rechtsanwalt und Dipl. Steuerexperte

» Peter Fröhlich

Lawyer and Certified Tax Expert

email: p.froehlich@viehbacher.com

Susanne Hirschberg, LL.M., Rechtsanwältin

» Susanne Hirschberg

LL.M., Lawyer

email: s.hirschberg@viehbacher.com

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