An overseas company may also establish a representative office in the UK; this is not a recognised form of business and, as such, cannot carry out business activities.
A representative office is often used in the initial stages of an overseas company’s establishment in the UK providing the foreign company with a physical presence in the British market place without the commitments and administrative requirements that apply to a registered company or branch office.
The main objective is to provide marketing and sales assistance in connection with the products and/or services offered by the foreign company to its British customers.
Legally, a representative office is not defined or regulated. It is, however, important to ensure that the activities of the office are limited to representative functions only. This means for instance that the representative in the UK may not conclude any sales or perform any after sales services.
A representative office is generally treated as a non-resident entity for tax purposes.