Branch and Representative Office of foreign companies under Iranian law
The present article has been prepared by Iran best lawyer in order to provide you with the legal points of the branch and representative office of foreign companies in Iran.
Registration and operation of branch offices of foreign companies
Registration and operation of branch offices of foreign companies in Iran are governed by the provisions of the Act Authorizing Registration of Branches or Representative Offices of Foreign Companies in Iran of 1997 (the “Act”) and the its Executive Bylaw of 1999 (the “Bylaw”). In accordance with Article 1 of the Act, foreign companies that are legally registered in their own countries may submit application to register a branch or representative office for specific activities in Iran, provided that their host countries afford reciprocal treatment to Iranian companies. As per the provisions of the Act and the Bylaw, branch and representative offices might be established for and operate a rather wide range of activities, namely:
- Providing after-sales services for goods and services of parent company;
- Conducting operational activities pertinent to agreements concluded between Iranian nationals and the parent company;
- Preparation of grounds for investment of parent company in Iran;
- Cooperation with Iranian technical and engineering companies for doing business in a third country;
- Activities aimed at increasing Iran’s non-petroleum exports;
- Providing technical and engineering services and transfer of know-how and technology; and
- Carrying out businesses which requires licenses issued by governmental entities which are legally authorized to issue such licenses such as transportation, insurance, banking, marketing and etc.
Branch and Representative Office of foreign companies
The Act and the Bylaw define a branch office as the local office of a foreign parent company. Accordingly, a branch is established with the aim of directly conducting the business of the parent company in Iran. An important legal character of branch office is that it does not have a distinct legal personality separate from its parent company.
In contrast, a representative office may be registered by an Iranian natural person or legal entity and undertake to carry out activities of a foreign company in Iran to the extent provided in its representative agreement. Therefore, it has an independent personality and the representative bears legal re-possibility with respect to its activities.
In the next section, we have briefly described legal and practical differences between these two types of presence in Iran. In addition, and for your ease of reference, we have attached hereto two separate lists of required documents for establishing branch and representative office in Iran, respectively, as Annex I and Annex II.
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Branch and Representative Office of foreign companies under Iranian law
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