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Branch &. Representative Office in Armenia

 

Aside from setting up a Limited Liability company in Armenia (Armenian LLC), foreign investors have two other options for entering the Armenian market – a Branch Office or a Representative Office. Both are registrable through the State Register of the Legal Entities of the Ministry of Justice of the Republic of Armenia.

What’s the difference?

Branches are allowed to conduct a much broader range of activity than representative offices. Branches can buy and sell goods, sign contracts, build things, render services, and generally everything that a regular LLC can do.

A representative office, on the other hand, cannot regularly trade goods or offer services. As the name says, a representative office represents its foreign parent in Armenia. So for example, the office can contact customers and enter into contracts on behalf of its foreign parent, but can’t sell the goods itself. A representative office is a more tentative step into the Armenian market for promotional purposes when the business distributes its goods by other means.

Here is how the Civil Code of RA Law treats the matter:

Article 61. Representative Offices and Branches

1.A representative office is a separate subdivision of a legal person located outside the place where the legal person is located which represents the interests of the legal person and conducts their protection.

2.A branch is a separate subdivision of a legal person located outside the place of location of the legal person and conducting all its functions or part of them, including the function of representation.

3. Representative offices and branches are not legal entities, and they act on the basis of charters approved by the legal entity.

The heads (directors, mangers) of representative offices and branches are appointed by the legal entity and act on the basis of a power of attorney from it.

Representative offices and branches must be indicated in the charter of the legal person that has created them.

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