Types of Branch Offices in Dubai
You may study in detail or discuss with us regarding the type of branch office to set up in Dubai. Our team will extend their knowledge in the field that will enable you to decide on the type of branch office you want in Dubai. With refined and all-encompassing advice from our professionals, the decision will become easy and simple.
It will depend on the type, field, and operational requirements, which type of branch office you want to establish in Dubai out of the 04 types, viz. Corporate Shareholder, Representative Office, Branch Company, and Subsidiary. Your aim and plans also will matter in decision-making.
The process of issuance of the business license in Dubai and other official documentation will be based on the type of branch office. Further, it will be subjected to existing rules, regulations, and policies in the UAE.
Branch Company Setup – A branch company setup follows the rules, regulations, and policies as with the sole ownership. The parent company or organization need not be in Dubai. The parent entity can be in Dubai, any other emirates in the UAE, or anywhere else. The branch setup is the most common type of branch office in Dubai.
Subsidiary – Subsidiary acts as a sole entity even though it has a parent organization. The subsidiary branch office must be located in Dubai with all its management based in Dubai. It is liable for all the business activities and monitoring of regulations and rules of the land. However, the parent entity can be located in Dubai, UAE, or any other region.
Representative Office – The firms, which want to gain a foothold in the Dubai business field, without actually setting up a business entity or any other type of branch office can consider establishing a Representative Office. It is the best option for those searching for a budget-friendly branch office setup. The representative office will act as the outlet of the parent company obtaining orders, enhancing publicity, and acting on behalf of the main organization. Nonetheless, the representative office is not authorized to manufacture or undertake production activities. They can only outsource all the orders, tasks, and assignments to the main entity.
Corporate Shareholder – Individuals or corporate companies can have shares in this type. The parent entity may be located in Dubai or any other place. The shareholder will have shares, as well as, the license of the company.
The process of Setting up a Branch Office in Dubai
The procedure to set up a branch office has been stipulated by the competent authorities in Dubai. The process has been prepared to keep the investor’s ease in mind. Therefore, it doesn’t have any complicated issues that may confuse the entrepreneurs. The steps involved in Setting up a Branch Office in Dubai are discussed in the subsequent paragraphs.
Assign a Local Service Agent (LSA) – An LSA will work on behalf of you for all the administrative formalities, visa requirements, and initial approval for setting up a branch office in Dubai. The agreement with the LSA will specify his role in the initial processing, including initial approval from the Dubai Economic Department (DED) and the Ministry of Economy.
Obtain Initial Approval – As discussed in the previous step, the LSA will process the application for obtaining initial approval for setting up a branch office in UAE. The approval is provided by DED and will be issued in a time-bound manner.
Registering the Trade Name – Once you register the trade name and the same is accepted by the DED, it will be forwarded to the Ministry of Economy for approval. DED issues every approval in concurrence with the Ministry of Economy.
Submission of Application – Post obtaining initial approval, an application has to be submitted to the Ministry of Economy of UAE for final approval for commencing the branch office in Dubai. All the relevant documents and certificates indicating shareholders, company registration details, list of proposed business activities intended in UAE, details of director board, details concerning the general manager in Dubai, and other info sought by the authority.
The documents to be submitted along with the application will include the following-
- Notarized agreement between the firm and the LSA, including the details and identification proofs of the LSA
- Initial approval from the authorities
- Certificate indicating registration of trade name
- Documents indicating legal structure and policies including, Article of Association (AOA) and Memorandum of Association (MOA)
- Passport copy of the assigned general manager in Dubai
- Power of attorney on his/ her name
- Document indicating the parent company’s resolution regarding branch office
- A detailed statement from the main entity concerning the business activities they have been undertaking and the planned activities in Dubai/ UAE
- Audited documents concerning the company’s financial status for the two previous fiscal
Approval from the Federal Foreign Companies Committee (FFCC) – Subsequent to approval from the Ministry of Economy, the approval from FFCC has to be obtained. All the stipulated documents have to be submitted to the FFCC along with the application for the same.
Application to DED for License – The next step involves approaching the DED for issuance of the license. An application has to be submitted to the DED for the same. The application must be accompanied with initial approval and copies of the documents submitted to the Ministry of Economy for the same, approval from FFCC and other relevant departments, a letter from the auditing agency or auditor regarding the correctness of the audit report for the previous two financial years, lease agreement for the premise and other documents sought by DED.
Final Set Up – After receipt of the license, the branch office can start activities towards full-fledged operations according to the approval. This will include administrative arrangements, visas for employees, bank account opening, approaching labor cards for the men, and similar activities.
Registration of Branch Office with Commercial Authorities – The branch office has to be registered with the Dubai Chamber of Commerce and Industry. The data about the branch office and its activities will also be included in the register of the Ministry of Economy.
Documents Required for Setting Up a Branch Office
The essential documents that are required to be submitted to the authorities for setting up a branch office in Dubai are appended below. The certificates, statements, and documents will be necessary during the initial approval stage at various departments and Ministry, in addition to, final business license application.
- Certificate indicating trade name
- Notarized agreement between the entity and Local Service Agent (It must include details and identity proofs of the LSA)
- Article of Association (AOA) of the company
- Memorandum of Association (MOA)
- Power of attorney in the name of the designated general manager in Dubai
- Copy of passport of the general manager
- Parent organization’s resolution about setting up of branch office in Dubai
- Details of intended business activities
- Audited financial records for the previous two financial years for the parent company. (The auditing must be done by an approved auditor)
Kiltons Business Setup Services in was established in 1999 in Sharjah, before expanding our business venture to Dubai. We have a team of proficient professionals well-versed with the activities and procedures for Setting up a Branch Office in Dubai. We will provide you a custom-tailored service according to your requirement. Kiltons became one of the most credible business setup services in Dubai/ UAE through dedicated efforts and trustworthy services.
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