A commercial representation is an organizational unit of the foreign company without legal personality which
- prepares and concludes contracts,
- provides information and maintains business contacts
on behalf of and for the benefit of the foreign company.
Commercial representations cannot
- provide legal consultancy services,
- conduct business activities on their own behalf.
A commercial representative office may be represented by an employee
- employed under a labour contract or
- being seconded to that position;
or by a person having inland domicile, under along-term commission relationship.
The foreign company exercises the employer's rights through the commercial representation. The jurisdiction selected by the parties shall prevail over the labour contracts of employment, but if the regular place employment is in Hungary, the selected jurisdiction may not lead to the employee being deprived of the protection ensured under the Hungarian Labour Code. The labour agreement may not derogate from this rule.
Commercial representative offices may only pursue activities that are conditional upon a licence after the necessary licenseshave been obtained.
Commercial representative offices
- come into existence by entering the company register with a resolution from the court, and
- may begin their activity after the registration.
The corporate name of the commercial representative office shall indicate the name of the foreign parent company.
To register a commercial representative office, you will need to have:
- I. the resolution on the foundation of the representative office and the designating of its authorized representative,
- II. the foreign company's instrument of constitution (or the complete text of the instrument of constitution as amended to date, where applicable),
- III. document in proof of the foreign company being entered in the commercial register in the country where established (usually a certificate of incorporation),
and the official Hungarian translation on the above documents
The documents above at I-III. may have to be legalized (i.e. diplomatic or consular agents of the country in which the document has to be produced certify the authenticity of the signature, the capacity in which the person signing the document has acted and, where appropriate, the identity of the seal or stamp which it bears; shortly, an ’Aposille’ has to be applied for related to the original documents).