If you already own a business elsewhere in the UAE? Dou you want to start a branch office in Dubai, UAE? Looking for a easy and quick branch setup in Dubai. With a branch office in Dubai, UAE is easy when done with the help of the experts. It is also the easiest way a foreign company can enter the market in the UAE.
If you already have a fully functional company in another country and you want to enter the Middle Eastern market, then a branch office in Dubai UAE is the way to go. Dubai is like the gateway to the Middle East. Its strategic geographic location allows foreign companies to connect itself to the whole region.
With a branch office in UAE, your company can perform business activities such as marketing products, selling goods and services, entering agreements, carrying out transactions, etc.
However, if the parent company is not allowed to perform a certain business activity, then the branch office in Dubai, UAE cannot perform that business activity as well.
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What is a Branch Office in Dubai, UAE?
A Branch Office is a secondary setup that a main company creates in another area, like a Freezone or Dubai Mainland. This is done to save costs, get tax advantages, or explore new markets. If you’re planning a to setup a branch in Dubai, you have two choices: setting up business in Dubai Mainland or Freezone. The rules can differ based on where you go.
Here are the characteristics of a branch office in Dubai, UAE:
- It perform the same activities as the parent company.
- The branch office must apply for the respective trade license that allows those business activities.
- It is not considered a separate legal entity from the parent company.
- The parent company will be liable for the debts and obligations of the branch office.
- The branch office will be taxed based on their income in the UAE.
- The branch office will have the same name as the parent company.
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Steps to Start a Branch Office in Dubai, UAE
You can either setting up a branch office in Dubai, UAE by yourself or with the help of the experts. However, if it is your first time starting any kind of company in the UAE, it is highly suggested that you seek help from professionals.
Any mistakes in the company formation process will cause some expensive backs that will cost you both time and money. As the result, the total cost will exceed the cost of hiring the professionals to start the company for you.
Here are the steps you need to follow in order to branch setup in Dubai, UAE:
1. Appoint an LSA (Local Service Agent)
The local service agent needs to be a UAE national (Emirati), and they will act as the intermediary between the relevant governing authority and you. They will obtain licenses, visas, permits, approvals, etc. for you.
Since a lot of the documents and official processes are conducted in the Arabic language, it is necessary for foreign companies to appoint a Local Service Agent.
If required, the Local Service Agent will share ownership of the company but will not take part in any operational or management activities of the company. They will not take a portion of the profit and will only require a minimal yearly fee.
2. File your branch office formation application
To get started, you need to file an application to the Ministry of Economy in Dubai. You need to obtain the initial approval from them to move on to the next steps. That is why you need to fill the application form carefully with authentic information that is free from any error.
Your local service agent will help you fill-up the application form to ensure that are no errors. A service agent agreement is also required to officially declare that the local service agent will be acting on your behalf to start the company.
3. Get Required approvals from the Ministry of Economy and Federal Foreign Companies Committee
You will need to submit the required documents to the Ministry of Economy to get their approval. You will also need approval from the Federal Foreign Companies Committee to start performing your business activities in the UAE.
The Ministry of Economy will forward the application to the Federal Foreign Companies Committee, so you do not need to worry about it. If everything turns out ok, then a permit letter will be sent, and you will get the approval for your branch setup in Dubai, UAE.
4. Obtain the Business Trade License from the DED
The Department of Economic Development in the UAE is responsible for providing business license to new businesses in Dubai. After you have received your approvals from the Ministry of Economy and Federal Foreign Companies Committee, you can apply for the business trade license from the DED.
Remember that you can only perform the business activities that you registered for when applying for the business trade license. So, it is suggested to select all the relevant business activities carefully when applying for the trade license. The business trade license needs to be renewed annually.
5. Register with the Commercial Authorities
After you have successfully registered your branch office and obtained your business license, the last step is to register with the commercial authorities.
For example, if your foreign branch company setup in Dubai then you need to register with the Dubai Chamber of Commerce and Industry and the Ministry of Economic Companies Register.
Required Documents to Open Branch Office in Dubai, UAE
Here are the Documents you need to procure to start your branch office in Dubai UAE:
- Filled up application forms for the registration of the branch office.
- The trade name reservation certificate.
- The Memorandum and Articles of Association (MAA) of the parent company.
- A copy of the Certificate of Incorporation of the parent company.
- The passport copies of the Company’s Director.
- A no-objection letter from the parent company.
- A power of attorney for the director of the Branch Office.
- The board resolution of the Parent Company for opening a Branch Office in Dubai UAE.
How much does it cost to set up a branch office in Dubai?
The cost of setting up a branch office in Dubai can vary based on different factors. On average, the initial cost for opening a branch office is around AED 100,000, and this amount includes a refundable startup payment of AED 50,000. However, it’s important to note that these costs are subject to change as per the laws and regulations of the UAE. It is advisable to stay updated with the latest requirements and guidelines to accurately determine the cost of setting up a branch office in Dubai.
Frequently Asked Questions on Branch Setup in Dubai
Why Establish a Branch office in Dubai?
Establishing a branch office in Dubai offers foreign businesses a strategic avenue to establish legal presence in the United Arab Emirates. Unlike a local limited liability company, a branch office allows for 100% ownership by a foreign entity and enjoys the same legal status as its parent company, operating under the parent company’s name.
Key features of UAE company setup include:
- Branch offices function as fully operational entities.
- They are authorized to conduct transactions and engage in specified activities as outlined in their license.
- Foreign companies can establish fully owned branches in the Emirate, with the requirement of appointing an Emirati national as a “Service Agent.”
- The local service agent must be a UAE citizen or a locally controlled business entity, as stipulated in a notarized agency agreement.
How to set up branch in UAE?
Set up branch company in UAE involves submitting an application to the Ministry of Economic and Commerce. Approval is required. A service agent agreement is crucial for business setup.
How can I open a branch office in Dubai?
If you already own a business elsewhere in the UAE or in other countries, then the best way to start your endeavor in the city is to open a branch office in Dubai. To do so, you can contact the Business Setup Consultants who have the necessary expertise and connections required to give you a head start.
As a result, starting a branch office in Dubai has never been easier. Additionally, you can get various corporate services and office spaces as well.
The process of starting a branch office in Dubai is very easy. However, if this is your first time taking a project anywhere in the UAE, then it is highly suggested that you seek the assistance of Company Setup Consultants. Here are the steps you need to follow in order to open a branch office in Dubai:
- File an application to the Ministry of Economy.
- Obtain consent from the Ministry of Economy.
- Get the required approvals from the UAE Federal Foreign Companies Committee.
- Get the license from the Ministry of Economy.
- Obtain your business trade license from the Department of Economic Development in Dubai.
- Get registered with the relevant commercial authorities.
What is a branch company in the UAE?
In the UAE, a branch company is an offshoot of an existing business that operates separately from its main headquarters. It allows companies to expand their operations to different cities or countries, tapping into new markets. For instance, global brands like Apple have branch companies in the UAE while their main base is elsewhere. If you have a company elsewhere, you can establish a branch in the UAE with the guidance of experts to access new opportunities.
What is the difference between branch and LLC in Dubai?
LLC Dubai requires a UAE National (individual or company) owning at least 51% of shares, leaving Foreign Investors with a maximum of 49%. A Foreign Branch is an extension of the Mother Company with no independent legal standing.
What is the difference between branch and representative office?
A branch is an extension of a company that operates in the same line of business as the parent company, with its own management and staff. A representative office, on the other hand, is a subsidiary that primarily engages in marketing and promoting the parent company’s products or services, but cannot engage in profit-generating activities.
Can I open a branch office in Dubai?
Yes, you can open a branch office in Dubai, subject to compliance with local regulations and obtaining necessary licenses and permits.
Can an Indian company open a branch office in Dubai?
Once approval for your branch office in Dubai is secured, you must submit the required documentation to the Ministry of Economy for their endorsement. Additionally, obtaining approvals from the Federal Foreign Companies Committee is necessary to initiate business operations in the UAE.
How can we help you to Branch Setup in Dubai, UAE?
Our experts have years of experience starting various businesses all over the UAE, including branch offices for foreign companies. We also provide some of the best office spaces in Dubai.
Are you are Planning to foreign branch company setup in Dubai, UAE? then you are at the right place. We are located in the prestigious Conrad Business Tower, office s2, 19th floor, Sheikh Zayed Road, Dubai.
For further information and assistance on How to Setup a Branch Office in Dubai UAE. To Speak with our Experienced Business Consultants for further information and assistance, call us at +971582595164. Send a WhatsApp Message for Chat Query on +971 582595164 or email us at info@companysetup.ae.