Representative Office (Zyra e Përfaqësisë) in Kosovo
A Representative Office (Zyra e Përfaqësisë) in Kosovo is a structure established to enable foreign companies to conduct non-commercial activities in the country. It allows companies to perform activities such as market research, promotion, business development, or customer relations management.
1. Key Features
Prohibition of Commercial Activities: Representative offices cannot engage in direct commercial activities in Kosovo. They are limited to representing the interests of the parent company.
Legal Status: The office does not have legal personality and operates as an extension of the parent company.
Purpose:
Conducting market research.
Establishing business connections.
Promoting the parent company’s products or services.
Understanding local regulations and exploring business development opportunities.
2. Advantages
Cost-Effective: An economical way to establish a presence in the Kosovo market without forming a commercial entity.
Risk Mitigation: Legal liabilities and commercial risks are limited.
Quick Establishment: Setting up a representative office is faster and simpler compared to forming a commercial company.
Parent Company Support: All liabilities and funding are borne by the parent company.
3. Disadvantages
Restrictions on Commercial Activities: Cannot generate revenue or enter into commercial contracts.
Lack of Independence: Local operations are entirely under the control of the parent company.
No Legal Personality: Legal rights and obligations are directly tied to the parent company.
4. Establishment Process
A. Required Documents:
Parent Company Documents:
Certificate of incorporation (trade registry document).
Certificate of activity (e.g., document from the trade registry).
Authorization Document:
Official authorization for appointing a representative or manager in Kosovo.
Proof of Address:
Lease agreement or ownership document for the representative office location.
B. Application Process:
Registration:
Submit documents to the Kosovo Business Registration Agency (ARBK).
Approval:
The legal existence of the representative office is approved by ARBK, and a registration number is assigned.
Fee Payment:
Pay the specified fee for registering the representative office.
C. Post-Registration:
The parent company should prepare a one-year or longer activity plan for the representative office.
5. Operations and Management
A. Local Representative:
The office is managed by a local representative or manager who handles regulations and official procedures in Kosovo.
B. Scope of Activities:
Limited to non-commercial activities:
Promotional and advertising efforts.
Market research and analysis.
Developing business connections.
C. Reporting:
The office must regularly submit activity reports to the parent company.
6. Legal Basis
Kosovo Law on Business Organizations: Governs the establishment and operation of representative offices.
Administrative Instruction (QRK) No. 05/2021: Specifies regulations for representative offices.
7. Post-Establishment Obligations
A. Tax Exemption:
Since representative offices do not conduct commercial activities, they are generally exempt from taxes. However, they must maintain records of expenses incurred on behalf of the parent company.
B. Updates and Changes:
Any changes to the office’s address, representative, or activity plan must be reported to ARBK.
C. Activity Reporting:
The office must submit activity reports at intervals determined by the parent company.
8. Example Scenario
An international automotive company aiming to increase sales in Kosovo could open a representative office to conduct market research and develop business partnerships before establishing a direct commercial presence. This office would carry out promotional activities and facilitate local business connections.
Conclusion
A Representative Office (Zyra e Përfaqësisë) is an ideal option for foreign companies looking to establish a non-commercial presence in Kosovo. This structure allows companies to evaluate market opportunities and develop business connections while minimizing costs and risks.