The United Arab Emirates’ most populous Emirate Dubai, significantly contributes to the country’s strong and expanding economy. With two of the world’s largest ports and an international air cargo hub, the city has emerged as a trading hub in the country and across the globe. Logistics, real estate, tourism, and final services are core sectors of Dubai’s growth story.

For foreign investors and established businesses seeking to develop and expand their businesses in the UAE, setting up a branch office in Dubai is the quickest and most advantageous course of action. The business specialist at Future Dream will assist you in establishing a branch office in the Emirates by handling all your business needs. This article will provide a thorough guide that will help you understand the requirements, benefits, and steps involved in this process.

A Step-by-step Guide to Set Up a Branch Office In Dubai, UAE

What is a branch office in Dubai, UAE?

A branch office is a parent company’s establishment or secondary office that is located somewhere other than the company’s main location. Establishing a business setup in the UAE can help foreign investors or business owners expand their businesses within the country. Also, it helps them create a legal presence as the branch office has the same legal standing as its parent business and can be established with 100% ownership from a nation other than the UAE.

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Characteristics of a branch office in Dubai

Liability: As the branch office is not a distinct legal body, the parent firm is solely accountable for the conduct of the branch office.
Trade License: A trade license outlining the kinds of commercial operations the branch office is allowed to conduct must be obtained.
Local Service Agent: The LSA must be a UAE national or a corporation inherited by a UAE national. The local service agent oversees the company’s licensing obligations and government-related issues.
Taxation: A branch office established in UAE is subject to the taxation rules and regulations on profits generated within the emirate.
Registration: The branch office must be registered with the same name as the parent company under the Dubai Chamber of Commerce and Industry. Also, it must carry out the same tasks as the parent company,
Audit: A statutory audit is mandatory for all types of companies in the UAE.

Types of branches you can set up in Dubai, UAE

Mainland Dubai: Permits companies to operate throughout the United Arab Emirates and gives them access to the local market. To open a branch in mainland Dubai, there is no requirement for a minimal share capital.
Free zone branches: The authority in which it operates imposes registration and licensing requirements in addition to specific share capital requirements. They offer tax exemptions, 100% foreign ownership, and streamlined registration processes but are restricted to completing their activities in the free zones they’re registered.

Steps to start a branch office in Dubai, UAE

The following are the steps involved in company formation in the UAE;

Choose a business activity and location:

With their advantages, Dubai offers you two choices for opening a branch office: the mainland and the free zone. Determine your business requirements and specific business activities your branch will conduct, and decide on a suitable location for your office space in Dubai.

Appoint a local service agent:

As per UAE regulations, it’s mandatory to appoint a UAE national or company as an LSA which will facilitate the setup process, including obtaining licenses, visas, permits, etc. for your branch office in Dubai. Foreign enterprises must designate a Local Service Agent because many governmental procedures and paperwork are conducted in Arabic. Therefore, it’s very important to appoint a trustworthy and experienced LSA who can assist you in the setup process.

Obtain an initial approval:

You must apply for pre-approval from the Federal Companies Committee and the Dubai Ministry of Economy to start the process of business setup in the UAE. You need to submit the necessary documents, along with an application form filled with authentic information about the parent company. You also need to provide a service agent agreement to officially declare that the LSA appointed by you will work on your behalf to set up a branch office in Dubai. Submit your application with the LSA to the DED, along with the required fee.

Obtain Business License from DED:

Business license UAE legalizes your presence and business activities in the county. You can apply to the Department of Economic Development (DED) for a commercial trade license after receiving permission from the Federal Companies Committee and the Ministry of Economy. Always remember that you’re limited to conducting business activities in your branch office for which you registered when requesting a business trade license. Therefore, while applying for a trade license, it is advised to carefully consider all the parent company activities. The business trade license will be renewed every year.

Obtain visas and work permits:

Once the registration process of your branch office is completed, apply for the UAE business visa or work visas and work permits for your investors or employees who will be working at the branch office. LSA can assist in the visa application process for your investors and employees.

Open a corporate bank account:

Open a corporate bank account for your branch office in Dubai, to set a financial clarity between the personal and business finances. A business bank account also provides a professional image to an organization and facilitates international transactions easily and efficiently.

Register with commercial authorities:

After obtaining a UAE company license and obtaining all the necessary paperwork, register your branch office with the Dubai commercial authorities. Both the Ministry of Economic Companies Register and the Dubai Chamber need the branch office in the United Arab Emirates to be registered.

Documents required to open a branch office in Dubai

Application forms: Application forms for branch office establishment are available from the Ministry of Economy (MOE). The most recent versions must be obtained and completed.
Parent company documents:

The incorporation certificate
Articles of Association and Memorandum (AOA & MOA)
Board of Resolutions approving the branch office’s opening

Local Service Agent (LSA) documents:

A legitimate Emirates ID card and a copy of the LSA’s passport
A copy of the trade license held by the LSA, if relevant
A Power of Attorney granting the LSA permission to represent your business during setup

Other documents:

Proof of trade name reservation
Parent’s firm LNO
Branch manager passport
Branch manager visa
Copy of the lease agreement of the premises

Benefits of opening a branch office in Dubai

Dubai has no income or corporation taxes, and businesses can benefit from the Double Taxation Avoidance Agreement (DTAA) to reduce their taxes in their home country.
100% foreign ownership is provided to foreign investors and business owners starting their business setup in the UAE.
The Dubai location is perfect to set up a branch office here as it’s located between Asia, Africa, and Europe and has easy access to their markets.
Opening a branch office in Dubai is a cost-effective way for businesses to enter the country because of the tax flexibility, scalable infrastructure, and minimum capital required in this process. Only the normal fee, application cost, and deposits are included in setups.
The Dubai government has embraced technology to streamline the company registration procedure and make it easier to launch a firm.

Conclusion

With rewarding advantages, Dubai is a perfect destination for foreign businesses to establish a business setup in the UAE that will ensure a successful expansion of their businesses in the UAE. However, you need to understand the documentation and legalities required in the procedure to open a branch office in Dubai. It could be difficult for foreign expats to do this on their own. But don’t worry. Partner with the best business setup advisors in Dubai to simplify your company setup in the United Arab Emirates. A comprehensive range of services, such as business registration, trade license acquisition, PRO services, and more, are provided by their committed team of specialists.

How to Set Up a Branch Office in Dubai, UAE