How to expand your branch through a German permanent establishment?

Learn about "permanent business establishments," which are like extra parts of a company's main office. Find out how they work, what they need to do, and how they're different from branch offices.

A further possibility of expansion is the permanent business establishment. The term "permanent business establishment" is derived from commercial law and refers to other branches or subsidiaries of the company which are established as business premises but are dependent on the head office. They are therefore branch offices that are not allowed to carry a business name other than that of the head office.

From a legal point of view, this is essentially a uniform business operation at separate physical locations. Invoices are also issued on behalf of the central office. There is no need for registration of the permanent business establishment in the commercial register. However, each permanent business establishment must be registered with the relevant commercial office.

The details of the head office (business name, registration court, and commercial register number) must therefore be specified on the business letters of the permanent business establishment. In addition, the designation "Regensburg permanent business establishment" can be used. In the case of a head office that is not registered in the German commercial register, the registration information for the foreign company shall be indicated.

An essential difference between an officially registered branch office and a commercial head office is in the degree of independence of the branch, which is usually determined by the company itself.