Any entrepreneur looking to get a foothold in the lucrative UAE marketplace faces a number of options. There are many options to choose such as free zone or standard mainland setups. If you’re looking for a presence in the local market while retaining 100% ownership of your business, then opt for a free zone business setup.
Opening a branch is just an addition or extension to exiting business. A subsidiary is considered to be wholly separate; a branch office doesn’t have a separate while legal identity from its parent company. While most branch offices are permitted to trade in the local UAE market, they can only conduct similar business activities to the parent company. Starting a branch in a foreign location, would increase the business opportunities by extending their operations into lucrative markets.
Types of company branches that operate in UAE
- Branch company: one of the most common setups a branch can also have a parent company operating either within Dubai or outside. A branch company follows the rule of sole proprietorship.
- representative offices: the most cost effective among all the branch types; representatives’ offices to can have their parent company operating within or outside of Dubai. The major differences between representative office branch from others is that their business activities are limited to promoting and sourcing work for their parent company.
- Subsidiary: operations of companies under subsidiaries branches function in a unique way. These companies are treated as separate legal entities to the parent company and must be arranged within Dubai. The parents of the subsidiaries can either be in or out of UAE, but the management must be based in Dubai.
- Corporate shareholder: the parent company in this category can operate in Dubai or any other location. Company branches which are classified under corporate shareholder allow an individual shareholder to hold a stake with license. it is also possible to have multiple corporate owners.
Procedure to set a branch office in Dubai
Step 1 Identify Local Agents
This is the initial task that’s required to be done and to identify a local agent. It is one of the common tasks that is followed by both branch office and representative office. It is mandatory that the local agent is a UAE national or a company fully owned by UAE nationals.
step 2 Reserve a Trade Name
An application needs to be submitted in Department of Economic Development (DED) stating intent about the trade name reservation and office registration approval.
Step 3 File an application
To start a branch company in UAE an application must be filed out by the investor which will go to the Ministry of Economy and commerce for approval. A service agent is provided during submission which is highly essential for setting up of the business.
step 4 Consent from the jurisdiction authority or economic department
Once you receive the approval of economic department, they will provide agreement. thus, the ministry will send out the application to the local government for consent.
step 5 Get approval from UAE federal foreign company committee
The next approval must come from the UAE federal foreign company committee and the application is then forwarded by the economies department to the committee. This application will also consist of a permit letter from the ministry economic and commerce and the business activity delta by the concerned authority.
step 6 Get license from the Ministry of Economy
post approvals from all the above-mentioned authorities, the ministerial order will be provided to the open the branch. This license will be issued by the ministry of economy and commerce and will comprise of business activities which will be performed by the branch office.
step 7 Obtain your business license
the branch office will be registered under the foreign company registration which will be registered by local economic department. It will be after this step will the branch office obtain a business license.
step 8 Get registered with commercial authorities
Once all the documentation and approvals are taken from the respective authorities, the branch officer can register with commercial authorities in the region to start the business. It is mandatory for branch office in UAE to be registered with the Ministry of Economy.
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if you are looking to setting up a branch or a representative for an extension to the parent company, ultimately helping them to capture the mass market in different regions of the world. Are you planning to set up your business branch in UAE? It’s an excellent decision that will help your business to grow at a faster pace at an international level. We are one of the leading business consultants who understand the setup process and have helped multiple clients to establish their businesses in the UAE. Do contact us for further consultation in UAE.