Representation
A representative office is an organizational unit of a company or organization whose main task is to maintain contacts and initiate business. Representative offices in other countries are mainly set up by internationally oriented companies ( global players ), but there are also domestic institutions of this type.
The staffing of the company representation is low, the business space is often only a representative office with a few rooms; the manager either works alone or has only a handful of employees. They have mastered the language of the host country and their mother tongue in order to rule out misunderstandings when processing the order or to act as an intermediary in cases of complaint.
The representative office is primarily intended to prepare business with new customers or promote business with existing customers. The deals themselves are processed by the head office or a branch in the vicinity. The dependent unit also maintains contacts with suppliers , banks or government agencies. In Germany, it may be active as a lobbyist in parliamentary processes . The tasks of a representative office can also include collecting economic information.
When visiting customers from the head office, the company representative accompanies the person (s) who have traveled to the customer or other interlocutor. If the scope of business becomes eminent, the representative office can become the nucleus of a (foreign) branch.
The establishment of a representative office in Germany by a foreign company may be subject to approval. For example, Section 53a of the Banking Act only permits contact maintenance for bank representations without approval; the initiation or brokering of transactions with residents requires the approval of the banking supervisory authority. The forwarding of orders to the head office as a messenger is not critical.