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4 Step Guide: Foreign Company Branch Setup in the UAE
A foreign branch setup in the UAE necessitates registering the company as an extension of the parent company operating in your home country. Its operations are similar to those of the parent company as it is not a separate legal entity from the company in the home country.
The foreign branch company must register with the relevant UAE Government authorities. The trading license acquired must bear a similar name and perform similar business operations to its home company. This foreign branch company’s primary purpose is to sell its clients the home company’s goods and services.
How to Open a Branch of a Foreign Company in the UAE
A foreign branch setup in the UAE allows 100% ownership. Below is a guide for opening a foreign company branch in the UAE.
1. Choose a Jurisdiction
The parent company needs to choose a respective place to set up its company branch. It could be at the Offshore, Free Zone, or Mainland. According to the Mainland laws, it is a must for the company to appoint a Local Service Agent (LSA) who helps in collaborating the administrative roles with the UAE government authorities. You will need to either appoint a company wholly owned by UAE nationals or a UAE citizen.
In Offshore and Free Zone, an LSA is not necessary, and the company’s director or manager gets authorization to conduct business operations for the branch company.
2. Register a Trade Name
The trade name must be the same as the parent company’s name in the home country. It should be registered with the respective authorities, depending on the choice of jurisdiction.
3. Secure Approval from Respective UAE Government Authorities
One must submit the request application to get the Ministry of Economy’s approval. Documents submitted need to bear the company’s details, including the name of the authorized general manager, share capital, nature of the business, and head office, among others.
The following documents are also mandatory and require attestation from both UAE’s Ministry of Foreign Affairs and from home country’s UAE embassy:
- Article of Association,
- Memorandum of Association,
- Certificate of incorporation,
- Board Resolution highlighting the establishment of a branch company,
- Good Standing Certificate of the parent company,
- Power of Attorney granting the general manager’s rights to open, manage, and operate Bank Accounts in place of the parent company.
4. Obtain a Trade License According to the Nature of your Business
To procure the foreign branch company, you must hand in the corroborative and support documents to the proper UAE government authorities. Our Company Formation Specialists can provide you with a deeper understanding of how you can successfully establish your branch in the UAE, giving you up-to-date industry knowledge that is valuable and customized to your needs.
If you opt for a trade license in the Mainland, cost starts from AED 14,500. While you can get a trade license in the Free Zone for only AED 6,500, giving you full-reins and 100% company ownership of your branch in the UAE.
After obtaining your license, you can run your business in the UAE, secure employee visas, open a corporate bank account and expand the branch office.
Benefits of a Branch Setup in the UAE
The process of opening a branch company in the UAE can be time-consuming but a worthwhile endeavor. Below are some of the benefits of establishing your branch company in the UAE:
- Minimizes the administrative burden of a broad multinational company management
- Entry to new market territories at an affordable cost. Therefore, the business grows with minimal upfront costs as the branch company requires no share capital in UAE.
- There is total ownership of the company.
- Improved management due to decentralized worldwide offices, separate bookkeeping, and auditing
- On UAE’s mainland, there is minimized import duty
- Business confidentiality
- UAE charges no income or corporate taxes. Hence there are enhanced tax savings.
A foreign branch setup in the UAE is the best idea to expand your operations and ensure the smooth growth of your company. The process may seem tiring and costly, but it is worth every effort invested.
Expanding a business can be complex and time-consuming for entrepreneurs, that’s why it is best to seek the professional help in setting up your branch company. Our Company Formation Specialists will not only guide you through, but provide you impartial advice the right jurisdiction for your business to help you maximize your operations.
Whether you opt for a Mainland or Free Zone setup, you can count on our dedicated team of professionals to provide you efficient business support services that will be beneficial for setting up your branch office. From Corporate Bank Account Opening, to obtaining Visas, finding the right Local Service Agent, and Office Expansion– we give you all the tools you need to successfully expand in Dubai and the UAE.