The UAE Commercial Law provides foreign investors two options in relation to their expansion into the UAE. Each of these legal forms gives the company varying amounts of access to function in the local market.
The Foreign Branch Office and Representative Office legal forms, allow foreign companies to establish a presence in the UAE while retaining 100% ownership. The offices function as extensions of the parent company and have no separate legal identity. The parent company remains liable for all activities conducted under the branch / representative license.
WHAT IS THE DIFFERENCE BETWEEN BRANCH OFFICE AND REPRESENTATIVE OFFICE?
Branch Office: A branch office permits the investor to set up a full-fledged business that is permitted to perform all activities similar to its parent company (depending on activities) as specified in the license at time of incorporation.
Representative Office: A representative office is strictly restricted to advertising and marketing of services and products that the parent company deals in. The office is not permitted to earn and engage in profit making activities.
WHAT IS THE PROCEDURE TO SET UP A BRANCH OFFICE IN DUBAI?
Appointing a Local Service Agent (LSA)
An LSA is an Emirati national or a corporate entity owned exclusively by Emirati nationals.
Trade Name & Initial Approval
Trade Name must be reserved and application to be made to Department of Economic Development (DED).
Application & Submission of Relevant Documents at Ministry of Economy (MOE)
All documents and information relating to Parent company and intended business model must be submitted for approval at the government authority in charge, MOE.
Obtaining License from DED:
Application is then made to DED, with information relating to proposed office space that the company will occupy in the UAE.
Completion of Administrative Tasks
The next step involves the signing of lease for office, opening bank account, and applications for hiring new employees that are hired by a company appointed PRO.
Register as member at Chamber of Commerce & Industry
The branch or representative office will finally be registered as a member at the Chamber of Commerce by completing a similar application as the at the DED.
ACT can help you with the detailed and often confusing processes of business setup in Dubai, our expertise in bringing global brands has been acknowledged by the government of Dubai. Awarded the Strategic Partner Award in 2016, we can establish a strong foundation for your international brand.
If you’re one of the many foreign companies looking to set up in Dubai and take advantage of the Expo 2020, ACT Pro & Business Services has all the information and expertise you need to guide you through the process.