Branch Office Vs Representative Office Company in UAE

We have discussed already a number of industries, where there is a high demand and, therefore, entrepreneurs tend to start those specific businesses. But sometimes you already have a business in your home country and you want to establish a representative office or a branch in the UAE. This chapter is then for you, because here we will look as to the requirements, costs and other aspects of setting up a branch or a representative office in Dubai mainland.

If you would like to set up your existing company in the UAE and retain a 100% foreign ownership, it can be done! You will need to decide between the establishment of a branch of your company or setting up a representative office for your company. Deciding between a branch or a representative company may seem confusing, but to put it simply: If you are interested in conducting business in the same manner as in your home country, you will need to set up a branch of your company. If you merely want to gain some exposure and market your company situated in your home country, you only need to set up a representative office.

Both a branch and a representative office will be treated as an extension of the foreign parent company. A representative office would purely be established for you to market and/or promote your foreign company in the UAE. This is due to the fact that a representative office is not permitted to engage in commercial activities or to earn profits in the UAE. The establishment of a branch of your foreign company in the UAE however, permits the branch to conduct business as your company does in its home jurisdiction. Therefore, it is crucial for you to determine, what kind of activities you would like to conduct in the UAE before deciding on which type of extension of your company you would like to open.

The process of establishing a branch or a representative office in the UAE is very similar. For the sake of convenience, it can be broken down into 5 main steps:

- Attestation and Legalization of Parent Company Documents

- Identifying a Local Service Agent (LSA)

- Approval from Ministry of Economy

- Obtaining a License from the Department of Economic Development

- Becoming a Member of the Chamber of Commerce and Industry

Now let’s have a closer look at each of the steps and first we will start with attestation and Legalization of Parent Company Documents.

Please note that all documents of the Parent Company, if company is registered in a foreign jurisdiction, must be legalized. This involves attestation by the Ministry of Foreign Affairs and UAE Embassy in the country, where documents were issued, and further attestation in the Ministry of Foreign Affairs in the UAE. Additionally, all documents need to be translated into Arabic by an authorized translator.

Next you would need to identify a Local Service Agent. A Local Service Agent is there to assist you with administrative aspects of the process. Local Service Agent is not responsible for any of the branch’s or representative office’s operations. A written agreement should be drafted between you and the agent in order for you to come to an agreement on matters such as duties and fees. Once the written agreement has been drafted, it has to be signed by both parties in front of a notary public.

Moving forward, you will need to obtain an approval from the Ministry of Economy. At this stage you will need to submit an application to the Ministry of Economy in the relevant emirate. This application will contain a range of documents, some of which include the following:

- Initial approval and trade name certificate

- Corporate documents of the foreign company

- Power of attorney documents

- Notarized agreements

- Personal Documents

- Bank deposit certificate

You will need to submit the application and all of the needed documents in the form of hard copies to the Ministry of Economy. After you have submitted the application, you will receive initial approval. Initial approval will allow you to reserve a trade name for your branch or representative office. Receipt of initial approval will allow you to submit your requested trade name, which will be reserved and the application process will continue in the Ministry of Economy.

Once your application is approved by the Ministry of Economy, you will be required to submit another application by the DED. This application will contain a lot of the same information and documents, the difference being that this application will require you to also submit the prospective address of the branch or representative office. As soon as your application by the DED has been approved, your license will be issued. You will then be able to proceed with other needed administrative duties, such as obtaining resident visas, applying for bank accounts and occupying the office space approved on the application.

And finally, you will need to register as a member of the Chamber of Commerce and Industry in either Abu Dhabi or Dubai. Once more an application needs to be filled out and some documents will be submitted alongside it. It will then be processed and sent for approval. Once approved, you will officially be a member of The Chamber of Commerce and Industry.

As you can imagine, there is a range of fees that will be associated with the establishment of your branch or representative office. One shall bear in mind, that these fees are subject to change. Additionally, fees may also be amended depending on your circumstances. We have constructed a list of fees applicable to the establishment of your branch or representative office. The fees can be categorized as:

1) Ministry of Economy Fees, where you will pay in total AED 15,000 for application and license issuance AND

2) Department of Economic Development (in Dubai) Fees.

Fees imposed by the DED are dependent on the situation at hand: the office size you will be renting, the trade name you will be choosing and more. Therefore, an exact fee cannot be determined. Based on our experience we have been able to determine a rough estimate of what DED fees could amount to. It can be expected that DED fees may approximately come to a total of 13,000 AED to 15,000 AED. This however, is subject to change and depends on a number of factors, some of them we have already mentioned.

Now you will know, which steps to take, to establish a branch or a representative office of your foreign company.

If you want to know more about Dubai freezone company formation, feel free to get in touch with our professional consultant team and we would be delighted to assist you and help you to compare Dubai freezone company setup costs and help you to find that free zone, which would suit your business needs the most.

Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.

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