Types of Branches: Local And Foreign - SS3 Accounting Lesson Note

A branch can be classified into two types - local and foreign branch. The main difference between local and foreign branches is their location. Local branches operate within the same country as the parent company while foreign branches operate in a different country. This affects the laws and regulations that the branch must comply with, as well as the cultural and business practices that it must adhere to.

Local branch 

A local branch is a branch of a company that is located within the same country as the parent company. It is subject to the laws and regulations of the country in which it is located. The local branch operates under the same legal entity as the parent company and shares the same management structure and policies. Its purpose is to expand the business to new local markets or areas.

Foreign branch 

A foreign branch, on the other hand, is a branch of a company that is located in a different country than the parent company. It is subject to the laws and regulations of the country in which it is located. The foreign branch operates under the same legal entity as the parent company and shares the same management structure and policies. Its purpose is to expand the business to new international markets or areas.