Last updated on July 13, 2022
Branch setup in UAE
Branch setup in Dubai is the main priority of every foreign company; because every company wants to have their presence in this part of the world. However, the branch setup in Dubai has a restriction in the activities which they perform. For branch setup in UAE you need a UAE local person who will act as a local service; this local agents will not be involves in the working side of the branch; however they will purely assist you in getting visas, labor cards immigration cards etc; and are paid a lump sum yearly.
Branch setup in UAE
The company who wants a branch setup in Dubai may freely do the activities which mention in their trade license. However, there are certain legal rules and regulations attach to the branch setup in Dubai. According to the Law, there are some activities, which are only allow to UAE national such as banks, finance business; commercial agencies as well as insurance. If a foreign company want to go for a branch setup in UAE; are allow to promote their parent company goods as well as services; and are allow to perform the activity which a parent company are performing. The branch office may also allow making a contracts or agreements between the company and its native clients.
Type for branch of a foreign company in Dubai
There are 2 main type of a structure which can be consider for branch setup in UAE; representative office setup in UAE and the 2nd one is branch office setup in UAE.
Representative office setup in UAE
A representative office in UAE is design for assembly data; as well as gets orders for their parent company main office. In representative offices setup in UAE you can only hire 3 or 4 employee. It serves like a marketing center for the parent company; but it is not allow carrying out any sort of business inside UAE. It is also not allow making any profits in the UAE. The only activity which it can perform is marketing; and promoting its parent company products as well as services.
Branch office setup in UAE
A branch office setup in UAE is a complete structure; which allows to perform the same business activity which the parent company is doing. A branch office setup in UAE can perform commercial activity in UAE and can earn profits.
Branch setup in UAE and representative offices in UAE share some similar features; as both run under the commercial company law and carry the name of the foreign company. They both will have to appoint a local services agent; who must be a UAE national. The process for setting up either a Branch office or RO; is therefore mostly the same one.
How to open a branch office in Dubai
The first step to open a company, including a branch setup in Dubai; is to find and appoint a local services agent. The local agent will first go to DED; and get the name registration and then will apply for an initial approval; from the Ministry of Economy for opening a branch setup in Dubai. The documents required for the initial approval are.
- An application form.
- A power of attorney for the director
- Proof of the reserve name for the branch of a foreign company in Dubai
- A passport copy of each of the director of the parent company. Also an NOC from the parent company for each of the director.
- A passport copy of the UAE local service agent and his family book.
- Copy of the board resolution for opening foreign company branch in Dubai
- MOA and Articles of Association of the parent company
- A copy of the Certificate of Incorporation of the parent company
Difference between RO and branch setup in UAE
The main difference between RO and branch setup in UAE; is that branch is free to perform its activity for which it is license; whereas RO allow only for promotional activities; that is for the products and services of the parent company.
A RO is not allowed to conduct any business in UAE. In order to engage a foreign branch to conduct its operation in Dubai; it need to obtain a license from the DED.
However, it is now a common practice for foreign companies to open their Branch in free trade zone. Whereas foreign company want to register their presence as a RO; must obtain registration with the Ministry of Economy.
Difference between subsidiary and branch setup in UAE
The main difference between branch setup in UAE; and subsidiary is that the subsidiary is free to do any sort of work. While the branch office is more like a parent company; the subsidiary will be able to do its own business in Dubai.
Branch of a foreign company in Dubai
When you are opening a branch of a foreign company in Dubai; then so many questions come in mind; for example, what will be the best location of my branch either free zone or main land; what will be the type of the business. Also, what sort of document I need to open a branch of a foreign company in Dubai; what are the steps which I need to take to setup my branch company in Dubai; how many visas will I get for a branch office; step needs for residency visas etc.
Our expert team has a full knowledge in legal structure; when opening a branch company in Dubai with different business activity such as trade; holding company branch, branch of an industrial company, consulting company branch; branch setup in Dubai for a tourism company etc. We also help in market study for a number of business sectors in Dubai; which is necessary when making a decision of branch setup in UAE.
There are many types of business setup in Dubai; in which one of the most active ones is the setup of branch office in Dubai. To open a branch of a foreign company in Dubai is a very general way for foreign investor; to bring their services as well as product to other markets as it offers number of benefits.
Branch setup in Dubai can rent an office anywhere
A branch setup in Dubai can be done in one of the free zone or in Dubai local market. Branch set up in free zone need to open its office within the free trade zone area; a branch setup in Dubai main land can open an office anywhere in Dubai. To open a branch office in Dubai main land will allows you to open a branch at the location that best suits your needs. You can get benefits from the great ground work of UAE; you will get more walk-in client at main locations. So, to open a branch office in Dubai main land will get you the benefit to open an office anywhere in Dubai.
Trade with main land companies through branch setup in UAE
In common practice, a business which is set up in free trade zone; is only allow to trade with only free zone company or outside the UAE; because, free trade zone company is not allow to do business directly with customer in the local market. But, it is possible with the help of a local distributor; who will charge you for his support. So, if you have a business in free trade zone and you need to target local client as well; then you could benefit from opening a branch office in UAE main land.
100 % foreign ownership for a branch of a foreign company in Dubai
A branch of a foreign company in Dubai is the portion of a parent company; in fact it is the main source for the extension of the parent company. So, opening a branch office in Dubai allows 100 percent of ownership to parent company.
As branch setup in Dubai is the extension of parent company; therefor you do not need to hire a Local sponsor to hold 51 % of share; but only you need to hire a Local Service Agent; which is a UAE Local person or a company entirely owned by a UAE National. He does not hold any rights in the branch; and only assist in services, for example visa applications. The Local Service Agent takes a fix annual fee for his support; but he has no part in the company shares. Therefore, the branch office gives 100 % ownership to parent company.