Liaison Office

A liaison office is a limited-scope representative office a company establishes in a foreign country primarily to conduct market research, coordinate with local partners, and represent the parent company's interests, without engaging directly in revenue-generating commercial activities. Because a liaison office is restricted from conducting full business operations, it typically faces lighter registration and compliance requirements than a branch office or a wholly owned subsidiary. Companies often establish a liaison office as an early step in exploring a new market before committing to a fuller market entry strategy. It allows the company to build local relationships, understand the regulatory and competitive landscape, and lay groundwork for future expansion, all while limiting its legal and financial exposure in the country. Because a liaison office cannot generate direct revenue and typically cannot employ staff in the same way a full commercial entity can, companies that want to hire local employees for functions like sales, recruitment, or operations while still in the early exploration phase often use an Employer of Record instead. This lets the company build a working local team without the restrictions tied to a liaison office structure.