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 a branch is a very popular way for foreign companies to extend their business into other markets as it provides numerous benefits.
Start Branch Office in Dubai – Why?
Now we can see the benefits of opening a branch office in Dubai and in UAE. The overseas company which opens their branch in the UAE 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.
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 setup 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 owned.
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 branch 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, to open a branch 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 are only permitted to trade 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
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. All the corporate documents of the parent company need to be fully legalized up to the UAE embassy. Our PRO Service in Dubai can assist you with the legalization process. Business Link UAE, your experienced Business Setup Consultants in Dubai, is looking forward to assisting you with your branch office formation in Dubai.