Business

How you can Set Up a Foreign Branch Office in Dubai?

The UAE’s government and business-friendly policies go hand-in-hand. The same has encouraged investors from all around the world to set up their branch offices in the heart of the Middle East region. The country is developing into a premier business hub, and the response from expatriates has been nothing but overwhelming. You’re free to choose the ideal business location for your branch office in Dubai. You can finalize a mainland establishment to access the world-famous local marketplace of Dubai or register with any of the free zone authorities. Moreover, all you need to do is connect with the business consultants at Shuraa, and they’ll help you set up your foreign branch office. 

Steps involved in setting up a branch office in Dubai 

Setting up a branch office in Dubai involves a lot of documentation, and the applicant needs to secure approvals from various governing authorities. Here’s a stepwise breakdown of the process: 

1. Partner with a local service agent (LSA) 

You need to find a reliable local service agent for opening the branch of a foreign company in Dubai. The LSA (also called national service agent) is a UAE national (Emirati) or a local agency entirely owned by UAE nationals. He/she doesn’t take part in your business activities, but their consent is needed to open a foreign branch office in Dubai. Furthermore, these agents help you throughout the business formation process, be it related to documentation, licensing, government legality, Arabic submission, or anything else. Moreover, the LSA also administers the procurement of visas, business permit, etc., during your stay in the UAE. 

2. Submit the application 

Once you have a legal agreement with your local service agent, you can lodge your application form for opening your branch office in the UAE. The foreign investor must ensure the presence of the LSA at the time of application submission and subsequent evaluation by the Ministry of Economic and Commerce. But, the ministry will duly analyze your application and provide an initial approval certificate if everyone’s under compliance and there aren’t any discrepancies. So, you need to provide information regarding shared capital, primary office, business type, and more alongside the mandatory documents. 

3. Obtain approvals from the concerned jurisdiction authority 

The concerned jurisdiction authority can be a local economic department or the DED, depending on your requirements. The Ministry of Economic and Commerce transfers your application form to this council before passing their verdict. All these steps can become hectic for a foreign investor if he doesn’t have the right guidance. Therefore, it’s better to partner with the legal advisors at Shuraa who’ll provide end-to-end business assistance for launching your branch office in Dubai

4. Take consent from the UAE Federal Foreign Companies Committee 

The concerned economic department forwards your application to the Federal Foreign Companies Committee after thorough evaluation. This committee then scans your branch office request and checks for any discrepancies in the information provided. You’ll be notified if there’s an issue with your application. In such an occurrence, you’ll need to reapply after rectifying the shortcomings. However, the foreign investor receives an official permit letter from this committee which is used in the further steps to obtain the business license. 

5. Acquire your license from the Ministry of Economic and Commerce 

Once you’re done with all the steps mentioned above, and there are no contradictions, you’ll receive a ministerial license for launching your branch office in Dubai. This license issued by the Ministry of Economic and Commerce consists of all the permissible business activities approved for your branch office. Moreover, the applicant must submit the required documents that include an initial approval certificate, eljari, a two-year bank statement of the parent company, etc., to obtain the license. 

6. Get registered with various commercial departments 

The branch of a foreign company in Dubai must register with the Ministry of Economic and Commerce Companies Register as it’s a mandatory requirement established by the government. Remember that you must have all the approvals and licenses before enrolling yourself with the commercial authorities. Furthermore, you should also register with the Chamber of Commerce and Industry to ensure risk-free business functioning in the UAE. 

7. Secure an office space and open a bank account 

Securing an office space for your branch office in Dubai is as essential as any other step. Pick a location that’s ideal for your business activities and keeps you in proximity to your target audience. You’ll need to provide the complete UBO details to the concerned bank for evaluation, and once approved. You can open a corporate bank account for your branch office. Always choose a bank that offers hassle-free services and long-term benefits. 

Benefits of opening the branch of a foreign company in Dubai 

Listed below are some of the key benefits of forming a branch office of your foreign company in the UAE: 

1. Flexible company structures 

You can open various types of branch offices in the UAE. It can be a representative office, corporate shareholding company, subsidiary office, etc., and you can choose the one that’s a perfect match for your business requirements. Moreover, the business experts at Shuraa make this decision easier for you by providing rich insights into each of these structures so you can make an educated decision. 

2. 100% ownership 

Forming an LLC in the UAE is a rewarding venture but requires a local sponsor who claims 51% shareholding in your company. However, that’s not the case in a foreign branch office. Since the branch is an extension to the parent company, it has legal permission to carry out all the permissible activities of the parent company alongside 100% business ownership for the foreign investor. 

3. Low barrier to entry 

The UAE’s Ministry of Economy has offered various discounts to encourage foreign investors to set up a branch office in Dubai. Furthermore, the cost of setting up a branch office in Dubai reduces by a significant margin because of the business-friendly laws maintained by the UAE’s government. You don’t need to pay any corporate taxes and can also enjoy 100% profit repatriation. 

Documents required to establish a branch office in the UAE 

Documentation and paperwork are critical for opening a branch office in the Emirates. All investors must comply with these requirements. Here are a few of the documents you’ll need to establish a branch office in Dubai

  • Firstly, MAA of the parent company 
  • Proof of trade name reservation 
  • Certificate of incorporation 
  • Passport copies of all the shareholders 
  • NOC from the parent company 
  • Power of attorney for the local director 
  • Initial approval certificate from the MOE 
  • Financial statements of your parent company (past 2 years) 
  • Finally, property lease agreement 

Consult with Shuraa 

Setting up a branch of a foreign company in Dubai is a profitable venture, thanks to the business-friendly laws, various tax exemptions. A lot more than the government offers to the expatriates. Your next step is to collaborate with Shuraa Business Setup, a pioneer in business consultancy and company formation services. Our business consultants have prolific experience in the domain. It would help you with the documentation, licensing, visa management, and everything else you need. Get in touch with us today! 

Click here to book a free consultation with us or call us at +971 44081900. You can also reach out to us on WhatsApp at +971 50 777 5554. For email assistance, mail your query at info@Shuraa.com. 

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