Fast-track Your Branch
Establishment in UAE.
Opening a branch office in Dubai offers foreign investors the opportunity to expand their business in the UAE. In addition to the various benefits of setting up a company in the country, there are also several advantages to having a branch of a foreign company in Dubai.
Investors are conducting thorough due diligence to ensure that the chosen business structure aligns with their commercial objectives. Moreover, establishing a branch office in Dubai provides a geographic advantage due to the strategic business location of the city.
The main features of setting up a company in the UAE are as follows:
- Branch offices are complete operational entities. Branch offices have the authority to conduct transactions and participate in other activities specified in their license.
- Foreign companies are allowed to establish fully owned branches in the Emirate, but they are required to hire an Emirati national as a “Service Agent.”
When deciding to establish a branch in Dubai, UAE, it's essential to take into account the following key considerations:
Business Scope
The Dubai branch must engage in the same activities as the parent company.
Legal Status
The Dubai branch is not a separate legal entity; the parent company bears full liability for its obligations and debts.
Licensing and Approvals
Obtain the required licenses from Dubai authorities for the branch's operations.
Taxation and Naming
The branch will be taxed based on UAE income and must maintain the same name as the parent company.
Types of branch offices that can function in the UAE
There are four types of branch offices that can operate in the United Arab Emirates (UAE), each offering distinct advantages depending on the needs and preferences of a business owner. These categories provide flexibility and options for businesses to establish their presence in the UAE effectively.
Corporate Shareholder: Allows individual shareholders to hold a stake along with the license. Multiple corporate owners are possible.
Branch Company: Operates as a sole proprietorship, with the parent company either in Dubai or abroad.
Representative Office: Cost-effective option limited to promoting and sourcing work for the parent company. No profit-making activities allowed.
Subsidiary: Functions as a separate legal entity within Dubai, assuming full liability for its actions. Parent company can be located in or outside the UAE.
Your branch
Establishment Steps
The ideal timeframe for completing a branch registration is typically two weeks, assuming that all the required documents are prepared and ready for submission.
Name Reservation and Application Submission to Department of Economic Development (DED)
Profound takes the necessary steps to secure the proposed company name. Firstly, we reserve the desired name and proceed to complete the application and licensing process with the Department of Economic Development. This includes obtaining initial approval on business activities, trade name, and partner identity if applicable. Additionally, Profound settles the required fees and registers the company for membership with the Dubai Chamber of Commerce and Industry (DCCI).
Drafting and Signing a Local Agent Service Agreement in the Dubai Courts
Profound assists the Client in fulfilling the requirement of signing a Local Service Agreement with a local agent, who is a UAE national. This agreement is essential for the branch registration, license renewal, and employment visas related to the foreign company. Profound provides the Client with a list of preferred local agents along with their annual fees. After the Client selects an agent, Profound proceeds to draft the Local Agent Service Agreement. To ensure legal validity, the agreement is signed in the presence of the Dubai Courts.
Securing Business Premises
In Phase 3, the Client provides Profound with a 12-month lease agreement for their office premises. If assistance is needed, Profound will support the Client in finding suitable office space that meets their requirements. This involves identifying potential locations and negotiating a lease agreement with a landlord. Subsequently, Profound will submit the lease agreement for Ejari attestation, which is a registration process with the Dubai Land Department.
Obtaining Initial Approval with the Ministry of Economy
Profound takes the necessary steps to obtain initial approval from the Ministry of Economy. This involves settling the required fees with the ministry. Once the fees are paid, Profound proceeds with the application process and submits the necessary documents. After review and verification, the Ministry of Economy issues an initial approval certificate for the Branch of Foreign Facilities, confirming the legal establishment of the branch entity. This certificate signifies the compliance of the branch with the relevant regulations and allows it to operate within the jurisdiction.
Trade License Application
After submitting the application, Profound secures the trade license approval from the Department of Economic Development (DED). The Client applies for either a commercial license (trading business), an industrial license (manufacturing business), or a professional license (services such as accountancy and consultancy), in compliance with Dubai law.
Corporate Bank Account Opening
Profound prepares a comprehensive and high-quality business plan. This plan serves as supporting documentation for the account opening procedure. Profound collaborates with leading local banks such as Emirates NBD, Emirates Islamic, First Abu Dhabi Bank, and others to secure a multi-currency corporate bank account for the Client.
Company Registration Finalization
The Client deposits the required statutory amount into the local bank account. The bank issues a Bank Guarantee Letter, which is essential for securing branch registration approval from the Ministry of Economy.
Why should I choose Profound for my branch establishment in the UAE?
Profound specializes in helping companies expand and thrive in the UAE. With extensive knowledge of local laws, regulations, and business practices, we provide tailored solutions to meet your unique needs. Our experienced team simplifies the entire process, ensuring a smooth and hassle-free branch establishment experience.
What are the key benefits of setting up a branch in the UAE?
Setting up a branch in the UAE offers several advantages, including access to a dynamic and diverse market, tax benefits, the ability to bid for government projects, increased credibility and presence, and the opportunity to build strategic partnerships with local entities.
What are the legal requirements for branch establishment in the UAE?
The legal requirements for setting up a branch in the UAE may vary depending on the business activity, location, and other factors. Generally, you will need to submit necessary documents, such as a board resolution, a copy of the parent company’s certificate of incorporation, a letter of undertaking, and a local service agent agreement.
Do I need a local partner to establish a branch in the UAE?
No, you don’t need a local partner to establish a branch in the UAE. However, you are required to appoint a local service agent who will facilitate government interactions and ensure compliance with local laws and regulations.
How long does it take to establish a branch in the UAE with Profound's assistance?
The timeline for branch establishment can vary depending on the nature of your business and the efficiency of government procedures. Generally, with Profound’s expertise, we aim to complete the process as swiftly as possible. However, it’s essential to understand that certain external factors may influence the overall duration.
Can Profound help with post-establishment services for my branch?
Yes, Profound offers comprehensive post-establishment services to ensure your branch’s smooth operation. These services include visa processing, accounting and bookkeeping, tax compliance, legal assistance, HR support, and more.
How can I get started with Profound's branch establishment services?
To get started, simply contact us through our website or by phone. Our expert consultants will discuss your requirements, provide guidance, and initiate the process to establish your branch in the UAE. Let Profound be your partner in expanding and thriving in this vibrant market.