How to open Branch of a Foreign Company in Dubai?

Branches and Representative Offices of Foreign Commercial Companies 

The Commercial Companies Law also covers the formation and regulation of branches and representative offices of foreign companies in the UAE and stipulates that they may be 100% foreign owned, provided a local agent is appointed.

Only UAE nationals or companies 100% owned by UAE nationals may be appointed as local agents (which should not be confused with the term "commercial agent"). Local agents - also sometimes referred to as sponsors are not involved in the operations of the company but assist in obtaining visas, labour cards, etc and are paid a lump sum and/or a percentage of profits or turnover. In general, branches and offices of foreign commercial companies are not licensed to engage in importing activity except for re-export or in the case of products of a highly technical nature.

To establish a branch or representative office in Dubai, a foreign commercial company should proceed as follows:

+ Apply for a license from the Ministry of Economy and Commerce, submitting an
agency agreement with a UAE national or 100% UAE owned company. Before
issuing the licence, the Ministry will:

+ forward the application to the Department of Economic Development to obtain the approval of the Dubai government;

+ forward the application specifying the activity that the office or branch will be
authorised to undertake in the UAE, to the Federal Foreign Companies
Committee for approval;

+ Once this has been done, the Ministry of Economy and Commerce will issue the required Ministerial licence specifying the activity to be practiced by the foreign company;

+ The branch or office should be entered in the Economic Department's Commercial Register, and the required licence will be issued;

+ The branch or office should also be entered in the Foreign Companies Register of the Ministry of Economy and Commerce;

+ Finally the branch or office should be registered with the Dubai Chamber of Commerce and Industry. read moreFor Company formation procedures, call
 
Qusais (Al Nahda-2): 04-239 1302, 055 273 2295, 055-345 7829

+ Branches and Representative Offices of Foreign Professional Companies
Branches and representative offices of foreign professional firms may be 100% foreign owned provided UAE nationals or 100% UAE owned companies are appointed as local agents. Such agents are not involved in the operations of the firm but assist in obtaining visas, labour cards etc and are paid a lump sum as remuneration. The Department of Economic Developmentt is the authority in charge of licensing such branches or representational offices. 
Branch Office of a Foreign Company
Under Commercial Companies Act Number 8 of 1984 and Ministerial Decision Number 69 of 1989, a branch office of a foreign company does not have a separate entity. It merely represents the parent company and carries on business under its name. Usually, a branch office may promote and market the products of the parent company, enter into transactions and conclude agreements in the name of the parent company, and offer services to its customers. 

With the exception of foreign companies licensed to operate from the free zone in the UAE, a foreign company may carry on its main activity or business in the UAE or establish an office or branch after a license is issued by the Ministry of Economy and Commerce. The license specifies the object or objects which the company is permitted to carry on. For the license to be granted the company must appoint a UAE national or a corporate body, the partners or shareholders of which are all UAE nationals, as agent of the company (a term which, under the Commercial Companies Act, does not include commercial agency). The duties of such agent to the company and third parties are limited to rendering the service necessary to the company without undertaking financial liability in respect of the business or activity of the company in the UAE or abroad; the agent is not entitled to claim any rights or authority in the business of the company. His rights in consideration of his services are determined by agreement. 

The applications to set up a branch in the UAE must contain the trade name, legal form, address of headquarters of the foreign company and the country where it carries its activities, nature of activity intended to be exercised in the UAE, name of national agent (if the agent is a legal entity, then its legal form), capital, names of partners, their nationality, and addresses. The following documents are required: 

+ Certificates of registration of the foreign company; 

+ Resolution adopted by the authorized body in the parent company to set up a branch in the UAE; 

+ Power of attorney for the company's representative who submits the application; 

+ Original copy of the articles of association of the parent company, legalized by the competent authorities; 

+ Balance sheet of the parent company for the last two fiscal years and auditor's report; and 

+ Notarized copy of agreement between the parent company and the agent. 
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Are you planning to Set-up your business in Dubai? Call us for Setting up new business, LLC Formation, Amendment in existing license, PRO Service and Translation. +971 55-273 2295, 055-345 7829, 04-239 1302 or mail your queries to visaprocess.ae@gmail.com
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