A branch office established by a foreign entity serves as a local extension of the parent company, allowing it to conduct business activities in the host country while remaining part of the larger organization. This approach enables the foreign entity to expand its market presence and engage directly with customers, providing localized services. Establishing a branch office typically involves compliance with local regulations, including registration and obtaining necessary licenses. Branch offices can perform various functions such as sales, marketing, and customer support without the need to create a separate legal entity. While they offer advantages like lower setup costs and greater flexibility, branch offices may also be subject to local taxation on their income, making it essential for foreign entities to understand the associated financial implications.