Branch Office in UAE
Open Your Branch Office in the UAE
A branch office of a foreign company in the UAE can be wholly owned by its parent company. Unlike an LLC, a branch office does not possess a distinct legal identity separate from its parent company. Therefore, the name of the branch office will closely resemble, if not match, that of its parent company. The branch operates as an extension of the parent company, which is based outside the UAE, and must obtain a trade license for its business activities conducted within the UAE.
Given that the branch office is an integral part of the parent company, it should be registered under the same name. The primary objective of a foreign company’s branch office is to promote the products and services of its parent company. Hence, the branch office must engage in the same business activities, or a subset thereof, as its parent company.
Certain business activities are restricted for branch offices of foreign companies in the UAE. For further information on these restrictions, please contact us.
Mainland Company
Sole Proprietorship→
CIvil Company →
Limited Liability Company →
Branch Office →
Representative Office →
How to Set Up a Branch Office in UAE
Before establishing a branch office in the UAE, you must appoint a Local Service Agent, also known as a National Service Agent. This agent acts as an intermediary between your branch office and government agencies, facilitating the acquisition of necessary approvals. The Local Service Agent can either be an Emirati (a UAE national) or a company in the UAE entirely owned by Emiratis.
Next, you need to select a trade name for your branch office. If your chosen company name is already registered by another entity in the UAE, you might consider adding the term “Middle East” to distinguish your branch office. This approach allows your branch office to maintain a name similar to your company’s name while indicating its status as a branch in the United Arab Emirates.
When choosing a trade name for your branch office in the UAE, ensure it doesn’t conflict with existing registrations. If your desired name is already taken, consider appending “Middle East” to differentiate it while maintaining a close resemblance to your company’s name, indicating it as your UAE branch.
You’ll then need to submit a detailed application to the Ministry of Economy, including your company’s global headquarters address, business activities, the nature of the commercial operations your UAE branch will undertake, and the qualifications of your General Manager.
Upon receiving approval from the Ministry of Economy, you, or preferably your Local Service Agent, should submit another application to the Department of Economic Development in the chosen emirate. This submission should include the Ministry of Economy’s approval, a lease agreement for your intended branch office, and an auditor’s statement confirming your company’s existence and financial statements for the past two years.
Once approved by the Department of Economic Development, you’ll receive a Commercial License valid for one year, requiring annual renewal.
Subsequently, you can open a bank account in the UAE. This process is intricate due to stringent anti-money laundering regulations. The bank may require insights into your parent company’s structure, especially if documents are in a foreign language, necessitating translation and legal attestation. Additionally, details of individuals holding more than a 5% stake in your company must be provided
Why Choose an Experienced Business Setup Consultant?
The parent company owning the Branch Office bears responsibility for the branch’s actions. Income generated by the Branch Office is taxable in the parent company’s home country. Additionally, the parent company is required to provide a refundable bank guarantee deposit of AED 50,000 when applying to the Ministry of Economy.
For a comprehensive understanding of these requirements and more when establishing your Branch Office in the UAE, consult with an experienced company formation specialist. At A&A Associate, our dedicated legal team ensures adherence to regulations, and we have registered auditors ready to assist with your Department of Economic Development application for branch office setup in the UAE.
For further details, please get in touch with us.
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