Dubai is the perfect place for international businesses desiring to grow as it provides an ideal business environment. By opening a branch office in Dubai, businesses can take advantage of the strong economic infrastructure in the United Arab Emirates and retain 100% foreign ownership. This guide offers a thorough rundown of opening a foreign branch office in Dubai, outlining the advantages, expenses, and procedures necessary for a successful registration.
What is a Foreign Branch Office in Dubai?
A branch office in Dubai is an extension of a foreign parent company. It operates under the parent company’s name and is authorized to conduct business activities, including promoting and marketing products, entering transactions, and providing services. However, the parent company retains full liability for the branch’s operations.
Branch Office vs. Representative Office
- Branch Office: A branch office is permitted to engage in commercial transactions, sell products or services, and enter into contracts.
- Representative Office: A representative office is limited to promotional and marketing activities. It cannot generate revenue or engage in direct commercial transactions.
Registration Process for a Foreign Branch Office
The registration process involves obtaining initial approvals from relevant authorities and submitting the required documents. Key steps include:
- Reserving a trade name through the Department of Economic Development (DED).
- Obtaining initial approval from the Ministry of Economy (MOE).
- Submitting necessary documents to the DED for final registration.
Required Documents for Branch Office Registration
- Registration and license application form.
- Trade name reservation proof.
- Copy of the director’s passport and a letter of no objection from the parent company.
- UAE representative’s passport and naturalization book.
- The foreign company’s board resolved to open a branch.
- Power of attorney for the Dubai director.
- Memorandum and Articles of Association of the parent company (translated into Arabic and notarized).
- Parent company’s Certificate of Incorporation (translated and notarized).
- Two years of audited financial statements of the parent company.
Steps to Set Up a Branch Office
- Choose Business Activities: Define the scope of business activities the branch will undertake.
- Reserve a Trade Name: Secure the branch’s trade name with the DED.
- Obtain Initial Approval: Apply for approval from the MOE.
- Finalize Registration: Submit required documents to the DED for registration.
- Lease Office Space: Secure a physical office in Dubai.
- Open a Bank Account: Set up a corporate bank account for financial transactions.
- Hire Employees: Recruit staff and ensure compliance with UAE labor laws.
Cost of Branch Office in Dubai Mainland
- License Fees: AED 10,000 to AED 50,000 annually.
- Office Rent: AED 40,000 to AED 150,000 per year, depending on the location.
- Additional Costs: Salaries, legal fees, and operational expenses.
Cost of Branch Office in Free Zones
Free zones offer competitive pricing for branch office setup:
- License Fees: AED 15,000 to AED 25,000 annually.
- Office Rent: AED 25,000 to AED 75,000 per year, depending on the free zone.
- Advantages: Tax benefits, 100% foreign ownership, and simplified procedures.
Benefits of a Branch Office in Dubai
- 100% Ownership: Retain complete control of your business.
- Global Brand Presence: Enhance credibility and brand recognition.
- No Local Sponsor Needed: Operate independently without a local partner.
- Liability on Parent Company: The parent company assumes financial responsibility.
- Versatile Operations: Operate in mainland, free zones, or offshore locations.
Setting a branch office in Dubai involves handling operational, legal, and regulatory challenges. Our area of expertise at Raes Associates is making the business setup procedure for international investors as simple as possible. Our professionals take care of everything, from banking and office setup to paperwork and approvals, guaranteeing an effortless procedure.
For a simple yet successful branch office setup in Dubai, get in touch with Raes Associates right now.
Frequently Asked Questions (FAQs)
- What languages are accepted for official documentation?
Documentation must be in English or Arabic. Translations must be notarized. - Do I need office space to obtain a license?
Yes, a lease agreement must be submitted to the DED for final approval. - Can a branch office engage in commercial activities?
Yes, branch offices can conduct commercial transactions in the UAE. - What is the role of the Ministry of Economy in branch registration?
The MOE provides initial approval for branch office establishment. - What documents must be notarized?
The parent company’s Memorandum, Articles of Association, and Certificate of Incorporation must be notarized.
