Dubai is considered the land of fortune hunters. Rightly to be called so, when we look into the number of people and businesses who have gained after commencing their operations in Dubai. The laws of the land in the UAE have been fertile for business firms to grow immensely without much difficulty. All it necessitated was the willingness to persevere and dedication. Globalization has opened up countless opportunities for those searching for new markets. In this article, we will be elaborating on the topic how to start a branch office in UAE for your business.
Setting up a branch office in Dubai for your business can put you on the business map of the UAE. The regions in the country are flourishing and it will be advantageous for you in several ways. The business owner can hold 100% of shares and obtain a trade license to carry out all the business operations in the UAE. An ideal move that will be instrumental in nurturing your business remarkably.
The government promotes the setting up of businesses in the country. The regulations and policies are supportive of establishing every kind of legal business. Awareness about the procedure will be beneficial for you whilst proceeding with starting a branch office in the UAE.
The Types of Branch Offices in UAE
There are 4 types of branch offices viz. Corporate Shareholder, Representative Office, Branch Company, and Subsidiary. The business owner can choose which type of branch office he or she wants to commence in UAE. The decision could be based on the business objectives, operations you want to undertake, and the plans.
The branch office must obtain a trade license after submitting the application in the prescribed format. It will have the same title as the parent organization. The office must abide by the rules and regulations stipulated by UAE and file tax depending on the profit earned in each fiscal.
Let’s see each type of branch office in detail.
Branch Company Setup – This has been one of the most common types of branch setup followed in Dubai. The parent company can be in Dubai/ UAE or anywhere else. The branch company follows the rules stipulated for sole ownership.
Subsidiary – This is a very different type of branch office. It is liable for its own actions and performs as an independent body from the parent organization. The parent entity can be in UAE or any other part of the world. The rules necessitate the management team of the subsidiary must be based in Dubai for it to operate in the subject region.
Representative Office – It is an effective way to promote your business without spending much. The representative office will act as if the mouthpiece of the parent organization. The main company may be located in Dubai/ UAE/ any other country. The representative office will promote the business, publicize the activities of the firm, and obtain orders for the business. However, they are not authorized to undertake work or make a profit.
Procedure to Start a Business Office in UAE
The authorities have laid down a procedure for starting a branch office in UAE. By following the stipulated process, you can establish a branch office without much hassle.
Submit Application to the Ministry – The Ministry of Economy and Commerce in the UAE provides initial approval for starting a branch office. It is mandatory to have a UAE national as your service agent and the service agent agreement is concluded prior to submitting the application.
Approval from the Economic Department – The approval from the local economic department, where the branch office will be set up, is a prerequisite. Therefore, the ministry will forward the subject application to the relevant department.
FFCC Approval – The approval from the Federal Foreign Companies Committee (FFCC) is necessary. The department will put up your application to the committee for perusal and approval, along with a letter from the ministry.
Issuance of License – Subsequent to approval by the above-mentioned departments and committee, the Ministry of Economy and Commerce will issue an initial license to start a branch office. The type of office and the business activities it can undertake will be specified in the license.
Get a Business License – The local economic department (in the case of Dubai, Dubai Economic Department) will register the foreign company. The business license to commence operation of the branch office will be issued by the economic department of the area.
Register Your Branch Office with Commercial Authorities – After completing all the formalities, you can register the branch office with the commercial authorities and start full-fledged operations as stipulated by each type of branch office.
Establishing a branch office in Dubai/ UAE will be the most rewarding decision. It will boost your business to reach greater heights. Assistance from well-established and reputed business setup services in Dubai will help you to steer through the process without complications. And commence the business operations at the earliest.
Kiltons Business Setup Services, Dubai has been extending credible services to business firms across the UAE. In addition to aiding the commencement of branch office in Dubai, you can contact Kiltons for various types of company formation in UAE. It is one of the most renowned organizations in Dubai, providing premium sponsorship from the Royal ruling family.
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