Are you a business owner considering one of the many ways established businesses can enter the UAE market? The easiest way to bring your business to the UAE is by starting a branch or representative office. Foreign companies can simply choose one of the many freezones or even setup a business in UAE mainland. This allows foreign companies to establish a formal presence in the UAE in form of a branch or representative office with minimal investment.
Unlike the case of starting a company in UAE, a branch office of an existing company can be established without Emirati ownership. The branch office can have the same legal identity as the parent company and also conduct business under the name of its parent company. The branch or representative office can be completely foreign-owned but a UAE national must be appointed as the branch’s local service agent.
Branch Office vs. Representative Office:
- A branch office of a foreign company is completely different from a representative office.
- A branch office is free to perform any business activities for which the license is granted.
- The representative office may not carry out business activities.
- It is only authorised to promote products and services provided by the mother company.
- Restricted to activities such as gathering information, soliciting orders, and marketing projects.
- They are also limited in the number of employees.
Requirements For Branch or Representative Office:
Any foreign company which wants to start a branch or representative office is required to provide a bank guarantee from a local bank when engaged in business setup in Dubai or any other Emirate. The amount required may vary based on the location and the type of business but the rules stipulate that the bank guarantee amount must at least be AED 50,000. The firm is also required to provide details of its own market capitalization and good standing, together with its two most recent sets of annual audited accounts.
The company must also submit the following documents to secure the necessary approvals:
- Articles of Association
- Certificate of Incorporation of branch office
- Updated Certificate of Incorporation of the mother company
- Minutes of the meeting that approves the opening of the branch and appoints the manager
- Notarised power of attorney appointing the manager
- Additional documentation for the relevant authorities according to the business sector.
Setting up a branch or a representative office could be the first step in introducing your business to UAE. The branch/representative office can initially serve extension to the parent company, eventually, it can help them capture the mass market in that region and act as the first step to fully setup your company in Dubai or the one of the other Emirates.
Entering the UAE marketplace could be an important step for your business. A new branch/representative office could be the crucial first step in this process. To make the right calls in the UAE marketplace, choose Worldwide Formations Limited as your company formation partner. We can help you create a niche of your own whether you are looking to start a branch office at one of the freezones or in the UAE mainland.