Opening a new branch of business is one of the things that businessmen conduct here in the UAE. More often than not, business owners carry out a business setup in Dubai and expand into the free zones to do business in there. However, there is quite a confusion between branch office and representative office.
Difference Between Branch & Representative Office
A parent company can set up another entity that is registered to that state or country and under it jurisdictions but is still considered as part of the aforementioned parent company. The ownership still belongs to the parent company of the branch that should be licensed with the same name and activity.
On the other hand, a representative office is defined as an activity of a branch that is for the sole purpose of marketing the products and services of the company; however, delivery and trading cannot be done by this office. Anyone who wishes to establish a representative office in Dubai needs to go to the UAE Ministry of the Economy and Dubai Department of Economic Development to be registered.
Opening a branch company in Dubai simply means that a person already has a licensed organization in the UAE (outside the free zones) and would like to cater to other and potential clients inside those zones. Almost the same procedure of choosing an office, warehouse, and location is applied when you set up a branch of a local company. In addition to this, you would need a national service agent when you set up a branch. This agent must be either an individual who is a UAE national or a company that is owned by UAE nationals. It should be noted, however, that this agent will not have any rights on the branch that is set up. This is only done because the federal and local government requires this so.
There are additional steps to be done and procedures to follow when starting a business in Dubai, which is basically a branch. For this reason, a consultant is advisable to be sought for further information for your guidance. A consultant can definitely answer your question of how to open a branch office in UAE, giving you a detailed explanation and step-by-step process so you will grasp the pros and cons of doing so. You can find out from them the cost of setting up branch office in Dubai as well so that you can be financially prepared when you enter this venture. Opening a new branch of business may not be a simple task but it is something that can be done systematically, adhering to the laws of the land, when the right people do it on your behalf.
Whether you are after a company formation in Dubai, setting up a branch, or setting up a representative office in Dubai, your consultant can help you decide and weigh in things. The information that you need to know will be provided by them, such as if you set up a branch, you are definitely allowed to do the same activities that your parent company does.
As with any other business setup, advantages do go alongside setting up a business in Dubai and a branch as well. More often than not, businessmen who already have their organizations in the UAE want to cater their customers in other parts of the country by setting up another branch to ensure that the demand for their products and services is met. This is a great way to meet their clients halfway and even established a better rapport than what’s already been established between them and the consumers.
Moreover, with this kind of expansion, the name of the company also has the opportunity to be known by other consumers and might even catch a new target market that they can add to their potential clients. This will also give the organization a strong presence in the country as it slowly works its way up to the notable names in its industry.
Setting up a branch gives a raise for the revenue of the entire enterprise. Aside from this, the people will see how solid a foundation your company has that it has managed to expand into somewhere else. So to say, when done right and executed correctly, it will give positive effects to the whole organization as a whole.
This is considered to be a common procedure that a local company does when they have already formed a strong relationship with a number of clients or consumers. A study should also be done before going forward with this decision as it can be risky if you don’t have any figures to base on for taking this venture.
The good thing about getting a national service agent is that they deal with the government authorities. They take care of all the requirements that need to be done or processed for your branch setup to get started.
The business activity of a branch that will be set up should be the same as its parent company’s business activity.
MAF Consulting Middle East is one of the business consultants in Dubai that has helped businessmen answer the question “how to open a branch office in UAE” and set up businesses in the nation and neighbouring countries as well. Our experience of more than 30 years makes us distinct from others.
Once you give us the opportunity to work with you, we can provide the following services:
- Applying and following up on behalf of the client until the collection of the Certificate of Business Registration (Trade License)
- Representing the client in front of the authorities
- Assisting the client in bank account opening
- Assisting the client in account opening with the Ministry of Labour
- Assisting the client in account opening with the UAE immigration
- Assisting the client in leasing a premise as an address for the business
The procedure of processing the business setup would range from 2 to 4 weeks.
- Passport copies for the shareholders
- Passport copies and CV (resume) of the manager—the manager must have a university degree.
- Personal information sheet for each shareholder and manager (template will be forwarded by Farhat Office & Co.)
- Proof of trade name reservation for the new branch (Farhat Office & Co.’s task)
- Proof of initial approval for the activities for the new branch (Farhat Office & Co.’stask)
- Memorandum of Association of your existing main branch at the place of origin—this must be notarized by the UAE notary public.
- Article of Association of your existing main branch at the place of origin—this must be notarized by the UAE notary public.
- Board resolution to be resolute by the board of directors of your existing main branch at the place of origin expressing their intent to establish a branch of your existing entity (template will be forwarded by Farhat Office & Co.).
- A valid Certificate of Registration/trade license of your existing main branch company/entity
- A valid Chamber of Commerce certificate of your existing main branch
- Notarized Power of Attorney appointing Farhat Office & Co. as your legal representative in order for them to act on your behalf/on behalf of the shareholders (template will be forwarded by Farhat Office & Co.)
- Lease agreement (documents) as proof of a physical address of your new branch—the minimum space required is 550 sq. ft. (around 60 sq. m.). Your registration agent, Farhat Office & Co., can assist you in searching for your physical address.
- Your main branch company profile
Third Official Parties Approvals
In some business activities, such as health care, law firm, education training, transportation, construction and contracting, engineering consulting, etc., no objection and permission will be required as mandatory requirements. If your business requires such approvals, no objection letter and/or permission, there will be an additional cost and an additional professional fee for Farhat Office & Co.
Cost of Setting up a Branch Office in Dubai
Below is a table that consists the cost of setting up a company in Abu Dhabi, including the Abu Dhabi trade license fees. You can contact us for further information or clarification.
|Cost of Setting Up Branch Office in Dubai and other Emirates in the UAE|
Table of Estimated Government Cost and Professional Fees
|Trade License Option/Activity||Cost in USD||Cost in AED|
|Application for the Ministry of Economy (UAE Government)||1,350||5,000|
|Registering with the Ministry of Economy (UAE Government)||2,700||10,000|
|Deposit with the Ministry of Economy (refundable) to be submitted in a bank guaranty format (our firm can manage)||13,600||50,000|
|Registering and licensing with the local government (approximate)||2,700||10,000|
|Local Citizen—service agent fees (maximum)||4,100||15,000|
|Our Firm’s Professional Fees||6,000||22,000|
ATTENTION – NOTE