There are several types of company formation in the UAE. One of the most important ones is the branch office setup in Dubai. To Open Branch Office in Dubai is a very popular way for foreign companies to extend their business into other markets as it provides numerous benefits.
Setting up a company in Dubai – Why?
Now we can see the benefits of opening an office in Dubai and in UAE. The overseas company which opens their branch in the UAE. It is allowed to do the actions of its parent organization. While the representative organization can perform promotion exercises for the items and facilities of its parent organization.
The UAE has come a long way, and it is one of the main hubs for conducting business in Dubai. When you opt for a branch setup in UAE, you can get several benefits. Some of the common advantages of branch setup in UAE include the following:
- You will have 100% ownership of the parent company.
- You can consider working with professional business consultants. These local consultants can assist you in the process of acquiring and setting up your branch office. However, they will not have any rights over your branch office.
- To receive the benefits, you need to divide the operational, banking, and managerial powers accordingly.
- The owners will have the flexibility to indulge in transactions and provide high-quality customer services.
- As the branch company, your business will be allowed to provide only company products and services.
1. Hold 100 % Foreign Ownership
The branch office is not considered a separate legal entity, but an extension of the parent company. Therefore, a branch office set up in Dubai allows 100 % foreign ownership and permits to perform all activities similar to the parent company.
A branch office formation in Dubai does not require a 51 % Local Shareholder, but only a Local Service Agent. This so-called Local Service Agent is a UAE National or a company wholly owned by a UAE National. He does not acquire any rights in the branch and only provides services related to authorities, for example, visa applications. The Local Service Agent charges a fixed annual fee for his administrative support, but he does not hold any company shares or receive profit. Therefore, the branch office in Dubai is 100 % foreign-own.
2. Rent an Office anywhere
A branch company formation in Dubai can be done in one of the various free zones or within Dubai mainland. Whereas a branch in one of the several free zones in Dubai needs to rent an office within the free zone area, a branch formed in Dubai mainland can rent an office anywhere in Dubai.
To start your office in Dubai mainland allows you to open an office at the exact location that suits your needs. You can profit from great infrastructure, get more walk-in clients at prime locations or save expenses as rents decrease outside the city center. Therefore, opening an office in Dubai mainland provides you with the advantage to rent an office anywhere in Dubai.
3. Trade with Mainland Companies
In general, branch offices set up in free zones allow trading with other free zone companies or outside the UAE. Consequently, free zone companies are not allowed to directly trade with the local market. However, it becomes possible with the support of a local distributor, who will charge a certain fee for his assistance. However, if you plan a business setup in Dubai to trade with the local market, you could benefit from opening a branch office in Dubai
Opening a branch company in the UAE is a cost-effective means of entering the country. Unlike other business structures, share capital is not normally required to set up a branch company – you simply need to pay the standard fees, applications, and deposits that any business would need to pay. This all makes it significantly more cost-effective to open a branch office in Dubai.
What is the Process of Branch Office Setup in UAE?
Since Dubai is hailed to be one of the best Emirates for branch office setup, you need to consider researching it. The business consultants can help you in the process of branch office setup.
Some of the steps to follow for setting up a branch office in Dubai include the following:
- As the foreign company owner, you should send an application to the Ministry of Economy and Commerce to receive the permit.
- The Ministry of Economy and Commerce would eventually forward the application to the Department of Economics to get the local department’s approval.
- After receiving the approval, the Ministry of Economics and Commerce will provide approval.
- After getting approval from the Federal Foreign Companies Committee, the Ministry of Economy will provide the necessary license. However, you must submit the right documents.
- The branch office will be registered with the Commercial Registry of the Department of Economic Affairs, and they will be responsible for providing you with a valid license.
- The branch office will be finally registered at the Chamber of Commerce and Industry in Dubai.
Documents you Need to Submit for Setting up a Branch Office?
When you plan to a branch setup in UAE, you must submit the right documents. Some of the standard documents that you need to submit for setting up a branch office in Dubai include the following:
- Board Resolution
- Certificate of Good Standing
- Registration Certificate and Trade License
- UBO Declaration Form
- Memorandum of Association
- Extract from Registry
UAE brings in a lot of opportunities for everyone, especially if you’re an entrepreneur. If you are a foreign business owner, you need to speed up the process. To start the company formation in Dubai, several documents from the parent company will be needed, for example, a Memorandum of Association, a Certificate of Incorporation, and a Shareholders Resolution authorizing the branch office setup in Dubai. Our PRO Service in Dubai can assist you with the legalization process. Business Link UAE has years of experience and can help you establish a business. Opting for an end-to-end administrative solution will help to scale your international business. If you want to establish a business, contact us, and we will help you.
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