SET UP A FOREIGN BRANCH OFFICE IN UAE
The UAE Commercial Law provides two options for foreign companies to set up a branch office in Dubai, Abu Dhabi, Sharjah and the UAE. First is a full Foreign Branch Office, which can practice the same activities as the mother company. Second is a Representative Office, which is a marketing office and cannot commercially trade. Equally, each of these legal forms gives the company varying amounts of access to function in the local market. Both allow foreign companies to establish a presence in the UAE while retaining 100% ownership. Therefore, the branch functions as an extension of the parent company and have no separate legal identity. Furthermore, the parent company remains fully liable for all activities conducted under the branch/representative license.
What is the difference between a Foreign Branch Office and a Representative office?
Branch of a Foreign Company: Setting up a foreign branch office permits you to commercially perform all activities offered by its parent company in the UAE. This is subject to approval on activities as specified in the license at the time of incorporation and approved by the Ministry of Economy.
Representative Office: Setting up a Representative Office allows marketing support for the services or products offered by the parent company. A Representative office cannot commercially trade in the UAE.
Both of these legal forms require a service agent, either as an individual or corporate vehicle to complete the incorporation process. A service agent’s responsibilities are limited to rendering necessary services to the company. They hold no financial liabilities or obligations related to the company inside and outside the Emirate.
Advantages of ACT PRO & Business Services being you Local Service Agent :
Utilising ACT as your service provider and service agent provides you access to our extensive market knowledge and contacts. Along with access to both individual and corporate vehicle to act as the service agent. ACT evaluates your total requirement and professionaly executes the entire incorporation process from start to finish. ACT offers free service agent services with our annual pro services contract to save your time and money. This service provides full powers for labour and immigration and ensure full transparency and disclosure.
For setting up a Foreign branch office in Dubai, the following steps can be followed:
Firstly understand what type of branch you want to set up and the relevant activities you wish to hold. After which you need to review the foreign company documentation to ensure it meets local requirements. Thirdly, review the local regulatory laws to ensure there are no restrictions in performing your desired activities. During the review, source and secure a local service agent and agreed terms. We recommend a corporate vehicle. Once clear on the required documentation, arrange a board resolution and attest and translate all foreign company documentation into Arabic and English. All documentation needs to be attested in-country or origin and the UAE.
Once the above is finished you need to proceed with the following steps. First is to secure initial approval and reserve trade name for the new branch, then apply for approval from the Ministry of Economy (MOE). Once the MOE approves the application, you can proceed with the signing of the service agent agreement. During this process, secure commercial space for the branch. Upon issuance of an ejari you can apply for a commercial license at the DED. Lastly, complete the MOE registration and issue the company labour and immigration files.