Foreign company is allowing to open wholly own branch office in Dubai; because every investor wants to develop his or her business in every country. However, the branch office in Dubai has a limit in the activities they conduct; under (Article 314 of the Commercial Companies Law) in Dubai. A UAE local person will act as a local agent or companies 100% own by UAE nationals will be selected as native agents. Local agents (known as local sponsors) are not involves in the working side of the company; but purely assist in getting visas, labor cards immigration cards etc; and are paid a lump sum or a percentage of the profit of business.
Open a company branch in Dubai
The company which wants to open a company branch in Dubai may freely perform the activities mention in the trade license. However, there are certain legal rules and regulations attach to open a company branch in Dubai. According to the Law, there are certain activities, which can only allow to United Arab Emirate national such as banks, finance business; commercial agencies as well as insurance. There are many other different types of license which have different process you can achieve under terms and conditions; governing the task of the Department of Economic Development; which issues from time to time certain rules and regulations and executive decrees.
If a foreign company want to Open a company branch in Dubai; are only allow to launch advertising operations for its goods as well as services. The office may also facilitate assist contracts or agreements between the company and its native clients. Similarly, the foreign company branch in Dubai is also allow to do the same business; that is the business of the parent company.
Type of foreign company branch in Dubai
There are two main kinds of foreign company branch in Dubai; representative office in Dubai and a branch office in Dubai.
Representative office in Dubai
A representative office in Dubai is design for gathering data; as well as gets orders and tasks for their parent company main office. In representative offices in Dubai you can only hire 3 or 4 employee. A representative office serves as like a marketing center for the foreign company. A representative office in Dubai is not allow to carry out any business in Dubai. Representative office is not even allow to earn profits in the UAE. The only activity which it can perform is marketing; and promoting its foreign parent company products as well as services.
Branch office in Dubai
A branch office in Dubai is a complete business; which allows doing the same activity; that is the activity of the parent company. A branch office in Dubai can involve in commercial activity in Dubai and can earn profits.
Branch office in Dubai and representative offices in Dubai share so many similar features; as both run under the commercial registration 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 establishing either a Branch office in Dubai or representative offices in Dubai; is therefore largely the same one.
How to open a branch office in Dubai
The first step to open a company, including a branch office in Dubai; is to find and appoint a local agent. The local agent will first go to the Department of Economic Development; and get the name registration and then will apply for an initial approval from the Ministry of Economy for opening a branch office in Dubai. The documents required for first approval are.
- A license application form.
- Proof of the reserve name for foreign company branch 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
- A power of attorney for the director,
- MOA and Articles of Association of the parent company
- A copy of the Certificate of Incorporation of the parent company
The Memorandum, Articles of Association and Certificate of Incorporation must translate into Arabic and English duly notarized.
Difference between branch and representative office
The Difference between branch and representative office; is that the foreign company which opens a branch in Dubai; may workout freely the activities for which it is license. Where as a representative office in Dubai may allow only for promotional activities; for the products and services of the parent company.
A representative office is not allow to conduct business operation Dubai. In order to engage a foreign branch to conduct its operation in Dubai; it need to obtain a license from the Department of Economic Development.
However, it is now a common practice for foreign service companies to open their Branch in free trade zone. Whereas foreign company want to register their presence as a Representative Office; must obtain registration with the Ministry of Economy.
Difference between branch and subsidiary in UAE
Many foreign companies wanting to have an established company in Dubai open branch offices or subsidiaries. Because UAE is a main business state in the world and most famous for different products. The main difference between branch and subsidiary in UAE is that the subsidiary is free to do any work. While the branch office is more like a parent company; the subsidiary will be able to conduct its own operations in Dubai.