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.
Opening a branch company in Dubai
When Opening a branch company in Dubai as a representative office or a branch office; then so many number of questions come in mind; for example, what will be the type of the company; what will be the best location of my branch free zone or main land. Also, what sort of document is requires to open a branch of a foreign company in Dubai; what are the steps I need to take to setup my branch office in Dubai; how many visas are allowing for a branch office; step needs for residency visas for employees and business owners etc.
Our team of consultant has a solid knowledge in legal structure; when opening a branch company in Dubai with different business activity such as trade; holding company branch consulting company branch; branch of an industrial company, branch office in Dubai for a tourism company etc. We also support in market study for a number of business segments in Dubai; which is necessary when taking a decision of opening a branch company in Dubai.
There are a lot of business setup types in Dubai; in which one of the most dynamic ones is the setup of branch office in Dubai. To open a branch of a foreign company in Dubai is a very popular way for foreign company; to extend their product and services to other markets as it offers number of benefits.
Trade with mainland companies through branch office in Dubai
In common practice, a company which is set up in free zone; is only allowable to trade with other company in that free zone or outside the UAE; because, free zone company are not allow to trade directly with the company in local market. But, it is possible with the help of a local distributor; who will charge a good amount of fee for his support. However, if you have a will establish business in free trade zone and need to target local client as well; then you could benefit from opening a branch office in Dubai mainland.
100 % foreign ownership for a branch of a foreign company in Dubai
The branch office in Dubai is the part of a parent company; in fact it is an extension of the parent company. Therefore, opening a branch company in Dubai allows 100 % foreign ownership; and allows to do all the activities similar to the parent company.
To setup a branch office in Dubai does not need to partner a Local sponsor to hold 51 % of share; but only requires a Local Service Agent; which is a UAE National or a company entirely owned by a UAE National. He does not acquire any rights in the branch; and only support in services link to the authorities, for example visa applications. The Local Service Agent takes a fix amount of annual fee for his support; but he has no part in the company shares. Therefore, the branch office in Dubai is 100 % foreign owned.
Branch or representative office in Dubai can RENT AN OFFICE ANYWHERE
A branch company setup can be done in one of the free trade zone or in Dubai main land. Branch in free zone need to rent an office within the free zone area; a branch office in Dubai mainland can rent an office everywhere in Dubai.
To open a branch office in Dubai main land allows you to start a branch at the location that suits your needs. You can take advantages from the great infrastructure of UAE; you will get more walk-in customer at major locations. Therefore, to open a branch office in Dubai main land will get you the benefit to rent an office anywhere in Dubai.