Companies that want to test new markets and optimize their growth often embrace opportunities for global expansion. While this period of growth can be exciting, countries around the world require international companies to establish in-country business entities before they can operate. Creating a subsidiary requires applications, permits, and documents that cost two of your company’s most valuable resources — finances and time.
Simplify the process with Globalization Partners. Our global PEO owns business entities in more than 180 countries, including Afghanistan. When your company works with us, you can skip the setup process and start doing business immediately. Our services make expansion seamless.
How to Set Up a Subsidiary in Afghanistan
To lawfully open a subsidiary, your company must:
- Hire a lawyer who will register your business and file all necessary documents.
- Choose the best business model for your in-country entity.
- Register with the Ministry of Commerce and Industry (MoCI) Central Business Registry
- Obtain a tax identification number (TIN) from the Afghanistan Revenue Department or your local Mustufiat office.
- Apply for the appropriate permits and licenses depending on your industry.
- Publish the subsidiary’s business information in the Official Gazette.
Afghanistan Subsidiary Laws
An international company can open a subsidiary as a proprietorship/branch office, partnership, limited liability company, or corporation. There’s little benefit to choosing a branch entity. Under that model, your parent company and subsidiary are indistinguishable from their owner. Most employers choose a limited liability company to reduce their risk.
The business model you choose determines whether you need to partner with in-country directors or shareholders. This decision will also give you some idea of how long it may take to open your subsidiary.
At Globalization Partners, we’ve already handled the setup process. What’s more, our business entities are always fully compliant with local laws.
What You Need to Set Up a Subsidiary in Afghanistan
If you choose to open your own subsidiary, you’ll need various documents and resources, including:
- At least four to eight weeks before your subsidiary must be functional.
- A considerable amount of capital for applications, leases, permits, and other expenses.
- A lawyer who understands local procedures for the setup process.
- A lease for your subsidiary’s physical location.
- Documents secured by your lawyer, like the TIN, permits, and licenses.
- Documentation of your company’s publication in the Official Gazette.
Your lawyer will organize and prepare most of the documents you’ll need to open your subsidiary. In most countries, hiring a lawyer to complete the setup process is compulsory.
What Are the Advantages of Having a Subsidiary?
Under most models, opening a subsidiary frees your parent company from the liability associated with international compliance. Since they operate separately, your subsidiary and parent company can develop business cultures that reflect each team. Plus, both companies have their own board of directors, so each entity can make creative decisions without affecting the other.
That said, the time and cost associated with opening a subsidiary make it an unrealistic option for many expanding companies. Fortunately, you can experience the same benefits without setting up your own business entity.
When you work with Globalization Partners, your company has access to the same advantages as owning a subsidiary and more. Each of our entities is fully compliant. As an Employer of Record, we assume full liability for compliance with local regulations. We also employ an experienced legal team, helpful customer service representatives, and in-country experts to support you during every stage of expansion.
Enjoy consistent compliance and a global team of top talent when you work with Globalization Partners.
Trust Globalization Partners for Afghanistan Subsidiary Outsourcing
When you’re ready to expand, take your first international step with Globalization Partners. Our global PEO services make subsidiary outsourcing easy. Contact our team today to get started.