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How to Start a Branch Office in Dubai: A Comprehensive Guide

How to Start a Branch Office in Dubai: A Comprehensive Guide

ReCorporate Dubai By  0 617

Introduction

Foreign companies looking to expand their operations into the UAE often consider establishing a branch office in Dubai. Due to its strategic location, advanced infrastructure, and business-friendly environment, Dubai offers a plethora of opportunities for businesses to grow and thrive.

This article will guide you on how to start a branch office in Dubai, providing insights into the benefits, types, and procedures involved in setting up your branch in this vibrant city.

Benefits of Establishing a Branch Office in Dubai

There are several advantages to setting up a branch office in Dubai. Some of the key benefits include:

Strategic Location

Dubai’s geographic position makes it a strategic location for businesses to access markets in Asia, Africa, and Europe. This advantage enables companies to expand their reach and tap into new client bases.

Business-Friendly Environment

Dubai offers a pro-business environment, with streamlined procedures and minimal bureaucracy for starting and operating a business. The government also provides various incentives, such as tax exemptions and flexible visa policies, to attract foreign investment.

Legal Presence in the UAE

By establishing a branch office in Dubai, foreign companies can create a legal presence in the UAE, allowing them to engage in business activities without the need for a local partner.

100% Foreign Ownership

Access to a Skilled Workforce

Dubai is home to a diverse, highly skilled workforce, with professionals from various industries and backgrounds. This makes it easier for companies to find the talent they need to grow their business.

Types of Branch Offices in Dubai

In Dubai, there are two main types of branch offices:

Mainland Branch Office

A mainland branch office is established in the non-free zone areas of Dubai and operates under the jurisdiction of the Department of Economic Development (DED). These branch offices can engage in business activities both within and outside the UAE.

Free Zone Branch Office

A free zone branch office is set up within one of Dubai’s designated free zones, which offer various incentives, such as 100% foreign ownership, exemption from corporate and personal income taxes, and streamlined business setup processes. These branch offices are only allowed to conduct business activities within the free zone or abroad.

Understanding UAE Company Setup

To start a branch office in Dubai, foreign companies must follow specific guidelines and meet certain requirements. Key characteristics of UAE company setup include:

Branch Offices as Fully Functioning Enterprises

Branch offices in the UAE are considered fully functioning enterprises, capable of carrying out transactions and engaging in activities detailed in their license.

Licensing and Registration

Foreign companies need to obtain the necessary licenses and registrations from the relevant authorities, such as the DED for mainland branch offices and the respective free zone authority for free zone branch offices.

Local Service Agent Not Required

Branch offices in Dubai used to appoint a UAE national or a company wholly owned by UAE nationals as their local service agent – BUT NOT NOW. The agent was / used to be responsible for facilitating administrative tasks, such as obtaining visas and licenses, but had no direct involvement in the business operations.

But this is long gone. Now you do not need to have a Local Service Agent to start a branch office in Dubai. Local Service Agent is Not Required Now for a Branch Office.

How to Start a Branch Office in Dubai: The Process

Setting up a branch office in Dubai involves several steps. The following is a step-by-step guide to help you navigate the process:

File an Application

To start a branch office in Dubai, the foreign investor must submit an application to the UAE Ministry of Economy. The application should include a service agent agreement, demonstrating the appointment of a UAE national or a company wholly owned by UAE nationals as the local service agent.

Obtain Consent from the Ministry of Economy

The Ministry of Economy will review the application and, if approved, forward it to the local government body (DED for mainland branch offices or the respective free zone authority for free zone branch offices) for further consent.

Read: How to Start an E-Commerce Business in Dubai

Get Approval from the Federal Foreign Companies Committee

The Federal Foreign Companies Committee must approve the application before the branch office can be established. The committee will review the application and issue a permit letter if the business activities align with the UAE’s economic and commercial interests.

Obtain the License from the Ministry of Economy

Once the necessary approvals have been obtained, the Ministry of Economy will issue a ministerial license, detailing the business activities the branch office is allowed to engage in.

Register with the Local Authorities

After obtaining the ministerial license, the branch office must register with the local authorities, such as the DED for mainland branch offices or the respective free zone authority for free zone branch offices. Upon successful registration, the business license will be issued.

Register with the Commercial Authorities

Finally, the branch office must register with the UAE Ministry of Economic Companies Register and the Dubai Chamber of Commerce and Industry. This registration allows the branch office to start conducting business activities in the region.

Cost of Setting Up a Branch Office in Dubai

The cost of setting up a branch office in Dubai depends on several factors, such as the type of branch office (mainland or free zone), the business activities, and the required licenses.

On an average, the cost of establishing a branch office in Dubai ranges from AED 100,000 to AED 150,000, which includes a refundable startup deposit of AED 50,000. Note that these costs may vary based on changes in the UAE laws and regulations.

Legal Requirements and Documentation

To start a branch office in Dubai, foreign companies must comply with the UAE’s legal requirements and submit the necessary documentation. Some of the key documents required include:

These documents must be notarized in the country of origin and then attested by the UAE Embassy or Consulate in that country. Finally, the documents must be translated into Arabic and attested by the UAE Ministry of Foreign Affairs.

Read: Start a General Trading Company in Dubai (Step-by-Step Guide)

Opening a Bank Account for Your Branch Office

After successfully setting up your branch office in Dubai, you will need to open a corporate bank account to manage your business finances. To open a bank account for your branch office in Dubai, follow these steps:

Hiring Staff and Obtaining Visas

To operate your branch office in Dubai successfully, you will need to hire staff and obtain the necessary visas and work permits for your employees. The process for obtaining visas and work permits varies depending on the type of branch office (mainland or free zone) and the employee’s nationality. Some of the key steps involved in hiring staff and obtaining visas for your branch office in Dubai include:

Once these steps are completed, your employees will be able to work legally in the UAE under your branch office.

Conclusion: Is Starting a Branch Office in Dubai Right for Your Business?

Establishing a branch office in Dubai offers numerous benefits, such as a strategic location, access to a skilled workforce, and the ability to maintain 100% foreign ownership.

However, navigating the process of setting up a branch office in Dubai can be complex, involving various legal requirements, documentation, and steps.

By following the comprehensive guide outlined in this article, you can better understand how to start a branch office in Dubai and make an informed decision about whether this business expansion strategy is suitable for your company.

As you embark on this journey, consider seeking professional advice and support from business setup consultants to ensure a smooth and successful process. Please feel free to contact us anytime to start a branch office in Dubai. Our highly experienced business setup experts will guide you through the same.

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