Opening a branch company is a way through which foreign investors widen their business. Dubai provides several perks for branches of foreign companies. That is why owners of well-established companies or high-brand value in other countries, seek the need for opening a branch office in Dubai, UAE. Comprehending this, the authorities have made it easy and quick to establish a branch office in Dubai or any other Emirates.
- 100% ownership– A branch office in Dubai does not need a local sponsor but a local service agent who charges fixed annual fee. Hence, owners of foreign companies can enjoy 100% ownership of their branch office in Dubai.
- A low-cost entry into a new market – No share capital is required to start a branch office in Dubai. This makes it cost-effective to open a branch office in Dubai.
- Exposure to the international market– Ease in setting up a business and the immense government support has opened doors for many international businesses in Dubai.
- Favorable tax system – The UAE government does not collect any corporate tax from businesses (The exception being foreign banks who have to pay 20% of their annual profits as corporate tax).
- Ease in administration and auditing – you are not required to submit your audit reports in the UAE. This saves you time, money, and effort as you do not require a separate finance department.
Requirements to start a branch office in Dubai
- Proof of trade name reservation
- Application form for registration from the ministry of economy and commerce
- Memorandum and Articles of Association of the parent company
- A copy of the Certificate of Incorporation of the parent company
- The director’s passport copy
- NOC issued by the parent company
- Copies of the passport and naturalization book of the local service agent
- A power of attorney for the local director
- Management board resolution of the parent company for opening a branch office in Dubai
Steps to start a branch office in Dubai
- File an application
For starting a branch office in Dubai, the foreign investor is required to fill in an application with the Ministry of Economy. It is very important to provide the service agent agreement during submission.
- Take Consent from the Economic Department or Jurisdiction Authority
The Ministry of Economy will forward your application to the local government for consent. The UAE Ministry of Economy will provide an agreement once the Economic Department of the locale approves.
- Get Approval from UAE Federal Foreign Companies Committee
The next step in the process of opening a branch office in UAE is to get approval from the Federal Foreign Companies Committee. Economics department will forward your application to the committee.
- Get the License from the Ministry of Economy
After UAE federal foreign companies committee approves your application; the license will be provided to the company. The license provided by the Ministry of Economy will also specify the business activity undertaken by the company.
- Obtain your Business License
Apply for foreign company registration, the branch office will be registered by the local Economic Department. The Business License will be issued after a successful registration.
- Get Registered with the Commercial Authorities
After acquiring all documents and licenses, the branch office can be registered with the commercial authorities in the region and start the business.
