Opening a branch office in Dubai is a way through which foreign investors can expand their business in the UAE. While the country provides various benefits of setting up a company, there are also several perks of having a branch of a foreign company in Dubai.
Investors are steering extensive due diligence to ensure that the business structure they opt for best suits their commercial objectives. Furthermore, setting up a branch office in Dubai gives you a geographic advantage too, thanks to Dubai’s strategic business location.
Businessmen with well-established companies or high-brand value in other countries seek the opportunity to open a branch office in Dubai. Comprehending this, the authorities have permitted an easy and quick way to establish a representative office in Dubai or any other Emirates. The business experts at Shuraa will help you establish a branch office by taking care of all your business requirements for opening a branch office in Dubai.
Why Establish a Branch in Dubai?
By opening a branch office in Dubai, foreign businesses can establish a legal presence in the United Arab Emirates. In contrast to a local limited liability company, a branch office can be founded with 100% ownership from a country other than the United Arab Emirates, and it has the same legal status as its parent company. It also does business under the parent company’s name.
The key characteristics of UAE company setup:
- Branch offices are fully functioning enterprises.
- Branch offices may carry out transactions or engage in other activities as detailed in their license.
- Foreign companies are permitted to open fully owned branches in the Emirate, but they must employ an Emirati national as a “Service Agent.”
The local service agent must be an individual from the UAE. Or a business that is entirely controlled by UAE citizens, as specified in an agency agreement that is notarized locally.
Foreign branch office types in Dubai
Branches located in Dubai Mainland and branch offices located in free zones are the two types of branch offices in Dubai.
The key variations between the various business kinds are:
- Free zone branch offices must register with and obtain a license from the relevant authority in order to operate.
- Free zone branches must finish their tasks in the free zone where they were registered.
According to Article (313) of the Companies Law, a foreign company may establish a branch or a representative office in the UAE to conduct its primary business.
A foreign business that establishes a branch in the UAE is free to engage in the licensed activities. Whereas a representative office is limited to engaging in promotional efforts for the parent company’s goods and services.
Before getting the license from the DED, an organization must first obtain permission from the Ministry of Economy. As a result, one hire a foreign branch to conduct business in Dubai.
How to open a branch office in Dubai?
If you want to start a branch office in Dubai, UAE, following is the process:
File an application
For opening an office in Dubai, the foreign investor has to fill in an application with the Ministry of Economy. It is also essential that during the submission, a service agent agreement is provided. The condition of having a UAE national as your service agent during the process of establishing a representative office is a must.
Take Consent from the Ministry of Economy
The UAE Ministry of Economy will provide an agreement only after the DED approves. Thus, the Ministry of Economy will send the application to the local government body for consent.
Get Approval from UAE Federal Foreign Companies Committee
The next step in the process of starting a branch office in UAE is to get approval from the Federal Foreign Companies Committee. The committee receives the application by the Dubai economics department. With a permit letter from the Ministry of Economic and Commerce for the business activity dealt with the company.
Get the License from the Ministry of Economy
After the above-said authorities approve of the branch office, the ministerial license will be provided to the company. The business activity is in the license that the Ministry of Economy issues.
Obtain your Business License
Opening a branch of a foreign company in Dubai, the registration process will take place at this stage. The branch office in Dubai will be registered by the local Economic Department, after which the Business License will be issued.
Get Registered with the Commercial Authorities
Once you have all the required documents and the licenses at hand, the branch office in the UAE can register with the authorities in the region and start business. The branch office in UAE is required to be registered with the Ministry of Economic Companies Register and the Dubai Chamber.
Cost of setting up branch office in Dubai
Finally, cost of Branch office depends on various factors. The cost of opening a branch office in Dubai is AED 100,000, which includes an AED 50,000 refundable startup payment.
Note- The cost will be subject to changes as per the UAE Laws & regulations.
Open a branch office NOW!
Dubai is one of the fastest growing cities in the world. Undeniably, it presents the ideal eco-system for startup businesses to thrive. And so certainly there is no better time than now to open a branch office in Dubai!
However, not to forget that office setup in Dubai involves heavy documentation, legalities and procedures to be adhered to for starting your business in Dubai. Expats are more likely to face difficulties with the procedures. But don’t worry, Shuraa Business Setup is here to guide you with its expertise in office setup process in Dubai. We will make the process relatively seamless and simple for you!