Establishing a representative office in UAE for a foreign company or parent company is a huge step. A foreign company in the UAE may have several purposes of establishing a UAE representative office.
However, there are some requirements and conditions for incorporating a representative office in Dubai or anywhere across the UAE. Let us analyze the requirements, the procedures and cost of setting up a representative in Dubai UAE.
How to establish a Dubai Representative Office
- Reliable Local Agent – Registration of a branch or representative office for a foreign company in Dubai or anywhere in the UAE requires a local agent. This is the first step of starting a representative office in UAE. It is mandated to have a UAE national as your local service agent in Dubai UAE.
- Trade Name Reservation – The Department of Economic Development (DED) of the respective Emirates reserves the trade name for the foreign or parent company.
- Initial Approval – After submitting the passport copies of the investors, the parent company papers and preliminary documentation, the Department of Economic Development (DED) provides the initial approval / pre-approval to setup representative office in UAE.
- Ministry of Economy (MOE) – An approval from the Ministry of Economy is also required to start a representative office in UAE. The UAE Ministry of Economy provides an application that must describe the parent company or foreign company. The Ministry of Economy application needs details such as address of the head office, nature of the business, allotment of shares, etc. The Ministry of Economy may also demand paperwork concerning the parent company.
- DED License – The approval from the Ministry of Economy must be submitted to the Department of Economic Development to proceed with the process of setting up a representative office in UAE. Also, an added documentation will be submitted to the DED depending on the nature of the representative office. After which the commercial license is issued by the DED.
As we have seen in each step, documentation plays a major role. Let’s have a clear view of the mandated documents required to set up a branch office in UAE.
Documents required to establish a representative office in UAE
Parent Company’s or Foreign Company’s
- Certificate of incorporation or Trade License
- Board of Resolution Attested
- Power of Attorney Attested
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Local Agent Agreement (Notarised)
- Added Government Approval
- Investors Passport Copies
Benefits of establishing a representative office in Dubai
- Establishing a representative in UAE offers a lot of tax advantages. Also, representative office setup will have limited tax liabilities and 0% corporate tax rate.
- The total setup cost of a representative office in the UAE is comparatively low.
- There is liberty to have numerous shareholders while setting up a representative unlike generic company setups.
- No minimum share capital is required to establish a representative office in UAE.
- Foreign companies experience great international expansion and global connections through a representative office in UAE.
- Setting up a representative office in UAE is quick and the administrative process is swifter.
Cost Breakdown for Establishing a Representative Office in Dubai
The costs are divided into One-Time Setup Fees and Recurring Annual Fees.
Part 1: One-Time Setup Fees
These are initial costs paid during the establishment of the office.
| Item | Type of Fee | Amount (AED) |
|---|---|---|
| Initial Approval | Gov’t Fees | 235 |
| Name Approval (Foreign Name) | Gov’t Fees | 2,000 |
| Typing of MOA / LSA | Typing Centre | 500 |
| Notarization of MOA / LSA | Gov’t Fees | 875 |
| Ministry of Economy Fees | Gov’t Fees | 15,000 |
| Ministry of Economy Refundable Deposit | Gov’t Fees | 50,000 |
| Labour Card Fees | Gov’t Fees | 2,700 |
| Telephone + P.O. Box Update (Economic Dept.) | Gov’t Fees | 560 |
| Company Rubber Stamp | Service Fee | 100 |
| Subtotal (One-Time) | 71,970 |
Part 2: Recurring Annual & Periodic Fees
These are ongoing costs to keep the representative office operational.
| Item | Type of Fee | Frequency | Amount (AED) |
|---|---|---|---|
| Service Agent Fees + PRO Services | Sponsor/Agent | Every Year | 20,000 |
| License Fee | Gov’t Fees | Every Year | 6,600 |
| Market Fees (2.5% of annual rent) | Gov’t Fees | Every Year | Variable |
| Immigration Card Fees | Gov’t Fees | Every 3 Years | 760 |
Part 3: Variable & Situational Costs
| Item | Description | Frequency |
|---|---|---|
| Rented Office | Cost depends on location, size, and requirements. | Annual Lease |
| Name Approval (Arabic Name) | The fee of AED 2,000 is waived if an Arabic name is chosen. | One Time |
Important Notes:
- The Ministry of Economy Refundable Deposit of AED 50,000 is a security deposit that should be returned when the office is formally closed, provided all obligations are met.
- The Market Fee is a significant variable cost directly tied to your office rental expense.
- The Service Agent Fee is a mandatory annual cost for a representative office, as foreign companies cannot have 100% ownership in the mainland without a local partner or agent.
