Home – Branch Business Setup in Dubai
Starting a branch office in Dubai, UAE, is quick and easy with expert help. It is the easiest way for foreign companies to enter the Middle Eastern market, as Dubai is the gateway to the region. With a branch office, a company can perform various business activities such as marketing, selling goods and services, entering into agreements, and conducting transactions. However, if the parent company cannot perform certain business activities, the Branch Business Setup in Dubai, UAE.
A Branch Office in Dubai, UAE, is a secondary setup created by a leading company in a free zone or the Dubai Mainland to save costs, gain tax advantages, or explore new markets. The rules for setting up a branch vary depending on the location. The branch must perform the same activities as the parent company, apply for the appropriate trade license, and be a separate legal entity. The parent company is responsible for the branch’s debts and obligations, and the branch office is taxed based on its income in the UAE.
Starting a branch office in Dubai, UAE, can be done independently or with professional help. For first-time entrepreneurs, it’s advisable to seek professional help to avoid costly mistakes and ensure the total cost of the company formation process exceeds the cost of hiring professionals.
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1. Appoint an LSA (Local Service Agent)
An Emirati local service agent (LSA) is appointed as an intermediary between the relevant governing authority and foreign companies, obtaining licenses, visas, permits, and approvals. They are necessary for foreign companies due to Arabic language-based processes. If necessary, the LSA shares ownership of the company but does not participate in operational or management activities and requires a minimal yearly fee.
2. File your branch office formation application
To start a branch office formation in Dubai, you must apply to the Ministry of Economy and obtain initial approval. Fill out the form carefully with authentic Information and ensure no errors. Your local service agent will assist in completing the form, and a service agent agreement is required to declare their role in starting the company.
3. Get required approvals from the Ministry of Economy and the Federal Foreign Companies Committee
To start a business in the UAE, you must obtain approvals from the Ministry of Economy and the Federal Foreign Companies Committee. The Ministry of Economy will forward your application to the Committee, and if everything is satisfactory, a permit letter will be sent, allowing you to establish a branch in Dubai.
4. Obtain the Business Trade License from the DED
The UAE’s Department of Economic Development (DED) is responsible for issuing business licenses to new businesses in Dubai. Applicants can apply for a business trade license after receiving approvals from the Ministry of Economy and the Federal Foreign Companies Committee. It’s crucial to select relevant business activities and renew the license annually.
5. Register with the Commercial Authorities
After registering your branch office and obtaining a business license, foreign branch companies must register with commercial authorities, such as the Dubai Chamber of Commerce and Industry and the Ministry of Economic Development.
Ownership
The Old Company retains 100% ownership of the branch or representative office, which must operate under the same name and conduct the same business as the managing Audit firms in Dubai, there is no separate legal identity.
A branch or representative office must appoint a local services agent without rights, interests, or financial involvement. The agent must be a UAE national or a company owned by one or more UAE nationals who will manage all the necessary government and administration procedures.
Activities
The branch office in Dubai can operate the same activities as the parent company does.
The branch office also conducts commercial activities.
The branch office also has the same government and Dubai laws rights as the parent company in Dubai.
Dubai presents international businesses with various opportunities for different activities and operations.
Including:
Here are the Documents you need to procure to start your branch office in Dubai, UAE:
The cost of opening a branch office in Dubai is typically around AED 100,000, including a refundable startup payment of AED 50,000. However, due to UAE laws and regulations, these costs are subject to change, so it's crucial to stay updated on the latest requirements and guidelines.
Questions and Answers on Branch Business Setup in Dubai
A branch office in Dubai is an extension of a foreign company that allows it to operate in the UAE market. It can engage in commercial activities similar to its parent company’s, but it is not considered a separate legal entity.
The primary benefits include 100% foreign ownership, access to a growing market, the ability to leverage the UAE’s strategic location, and the potential for tax advantages while enjoying a robust infrastructure and business-friendly environment.
Key requirements include obtaining a trade license from the Department of Economic Development (DED), appointing a local service agent (if applicable), providing proof of the parent company’s registration, and submitting a detailed business plan outlining proposed activities.
No, a local partner is not required to establish a branch office in Dubai. The branch can operate 100% under the foreign parent company’s name, but appointing a local service agent for administrative support is advisable.
The timeline for setting up a branch office in Dubai varies but typically takes 1 to 3 months, depending on the completeness of the application and approval from various government authorities.
The process includes selecting a business name, obtaining initial approval from the DED, preparing legal documents, applying for a trade license, and securing relevant approvals from other governmental bodies, such as the Dubai Chamber of Commerce.
Yes, branch offices must maintain accurate financial records, submit annual financial statements, and comply with local regulations, including renewal of the trade license and obtaining necessary permits for any new activities.