If you want to retain 100% ownership of your entity in the UAE, opening a representative or a branch office is a popular way to go. Without holding any separate legal identity, these offices are treated as a powerful extension of a working foreign company which is solely liable for their operations and activities.
PRO Desk strives to exceed the expectations of SMEs, giant corporations and entrepreneurs by providing expert consultation for branch setup in Dubai. This entity is allowed to engage in several commercial activities going on in the United Arab Emirates to earn surplus profits. It can take part in the businesses relevant to the one already carried out in the mother company in its home jurisdiction. The license type is the commercial one.
How to Setup a Branch Office in Dubai
It is not permissible for the representative office to start earning profits within the jurisdiction of United Arab Emirates. All the activities are limited to promoting its parent company services and marketing the products.
Branch office shares multiple similarities with representative office as the operating authority and license type is same during commercial registration of foreign company. A local service agent (UAE national) is a must for both entities. The process of establishing a representative office and branch setup in Dubai is almost identical.
Step 1: Local Agent Identification
The LSA is a must requirement to start the process of branch office. The local service agent could be a company which is completely owned by the UAE national or it could be an Emirati individual.
The person or company will not take a part in any operation, marketing, ownership or management tasks of the foreign company nor does it is responsible for the branch activities. It is solely bound to provide administrative functions which are related to the permits, license and visa issuance, in return of an agreed amount or fee.
The appointment is duly effected through an agreement which must be signed before a notary public by the both parties. It is just a matter of negotiation as there is no prescribed or preformed agreement available.
Step 2: Initial Approval for Trade Name
The application should be submitted to the DED for the reservation of trade name and getting all the initial approvals which are mandatory for the proposed branch setup in Dubai.
Step 3: Dealing with the Ministry of Economy
After successfully getting the initial approvals, an application should be submitted to the Ministry of Economy.
Full details of the foreign company are required on the application form including head office address, share capital, home jurisdictions and overseas activities. The nature of the activities which will be conducted in Dubai should be mentioned. The application also states the name of general manager who will oversee the operations in the UAE.
Following documents should be accompanied with the form
- Initial approvals, and certificate of trade name reservation
- Certificate of incorporation
- Corporate documents including articles of association and memorandum
- Good standing certificate obtained from the home jurisdiction
- Resolution by the board which state the general manager appointment, power of attorney in the favor of general manager and acceptance of all the liabilities by the parent company of the office in the UAE
- Passport copy of general manager
- Audited report of the accounts hold by parent company for the last 2 years
- Statement which represent the home jurisdictions activities and intended operations in the United Arab Emirates
- Identification documents or corporate documents of local service agents and notarized agreement
After receiving the application with above mentioned documents, Ministry of Economy will issue the initial approval for branch setup in Dubai and ask for the following document in hard copy
- Application form
- Parent company incorporation certificates
- Initial approval which was provide by MOE
- Certificate of local bank deposit
After all these submission, you will receive permission from MOE for branch setup in Dubai.
Step 4: Obtaining DED License
A formal approval will be issued by DED. Further applications are submitted in the Dubai Department of Economic. All the above mention documents which were required by the MOE will be presented in addition to the proposed address of the office in the UAE.
This application needs to be accompanied by:
- MOE Approval
- Any other approval which is required by authorities and is applicable to the industry
- UAE lease document copy
- Financial statement of the company which is confirmed in a letter by a UAE auditor
A commercial license will be issued by DED to the branch office of foreign company which is usually void after 3 years and needs to be renewed annually.
Step 5: Administrative Tasks Completion
After the issuance of license, the proposed lease is open for the foreign company for work space. The branch office can open bank accounts and obtain labor cards and visas for employees.
Step 6: Membership of Chamber of Commerce and Industry
The last step of this tiring process is to register as a member of Dubai Chamber of Commerce. Further completed application and license copies are required along with passport copies and office lease.
From business to business the fees of branch setup in Dubai may vary as per the requirements and commercial license as it solely depends on the activities which are offered by the foreign company in the jurisdiction of UAE. The MOE fees remain the same.
Notarization of Documents
The parent company has to submit the documents which are listed above for verification and authentication at the UAE consulate and foreign ministry of the country in which the company conducts its business.
They are also required to be translated in the Arabic before the verification and presentation in front of the UAE authorities.
This process of notarization should be commenced as soon as possible as a sufficient time is required and it can ask for significant efforts. Moreover, if the country of the incorporation does not have UAE embassy, the process will be delayed further.
To make this process stress-free, call our team of experts for branch setup in Dubai.