Dubai has become one of the richest countries worldwide and currently one of the fastest-growing economies. Many foreign investors in Dubai keep growing and consequently assist our international clients in choosing the optimum company registration strategy for any business activities.
Foreign Company Branch or Representative
Foreign companies can open a branch or appoint a representative in the UAE. In the case of a branch, they can conduct all those activities for which they are legally licensed to do so overseas. In the case of a representative being stationed in the UAE, the company can only promote its products or services, but not conduct its main business activities or trade goods directly.
Some terms and conditions while opening a branch office in the UAE:
- The parent company must be registered with the Ministry of Economy & Planning register of foreign services.
- The parent company must apply for a license to open a branch in the UAE with the above Ministry before obtaining a license from the concerned authority in the concerned Emirate.
- A service agent appointed by the parent company must be a UAE national.
- The service agent is neither obligated to undertake any financial obligations on behalf of the parent company nor should he/she interfere with the company’s functioning. He or she is only obliged to handle or manage statutory activities such as obtaining permits, licenses, and processing transactions with Govt. agencies.
- The branch or representative office must submit AED 50,000 favoring the above ministry, in order to obtain a license.
- Within two years from the date of expiry, the license must be renewed, else, it stands canceled. The renewal fees are deducted from the above guarantee.
Types of foreign company branch in Dubai, UAE
The foreign companies can open branch offices in the UAE that include the main two types of establishments: Branches set up in Mainland Dubai & Free Zone branch offices. The most important difference between the two types of branch offices is that the free zone branch office will matter to the registration and licensing requirement compulsory by the authority in which it will control. Free Zone branch offices will be subject to specific share capital requirements in Dubai free zones, while there is no restriction of share capital requirements on setting up a branch office in Dubai Mainland.
Reasons to open a branch office in Dubai
The foreign companies who are interested in setting up a branch office in Dubai should be aware that this type of entity is governed by the company law of the Emirates and is appropriate to foreign businesses pursuing to do business in any industry developed in the UAE.
From a taxation point of view, the branch office in Dubai Free zones offers the repatriation of profits without additional surcharges, as local companies offer.
Above we mentioned some major reasons & advantages to open branch offices in the UAE. If you find any difficulties in any of the process or in choosing the right location to establish a branch office, just consult Quickbiz Business Setup Services. We are ready to help. We can also help with the registration of branches in Dubai mainland and any of the free zones here.