Branch Office Setup in UAE

Setting up a branch office in the UAE involves understanding the types of branch offices, the steps to open one, and the advantages it offers. A foreign company can establish a presence in the UAE by opening a branch office, allowing them to conduct business activities. The process involves several steps, including registration and obtaining the necessary licenses. Branch offices offer numerous benefits, such as expanding business operations and accessing new markets.

Open a branch office in UAE by registring with the Ministry of Economy, obtaining the necessary licenses, and appointing a local service agent. Here are the detailed steps to open a branch office in the UAE.

1. Appoint a Local Service Agent

A local service agent, who must be a UAE national or a company wholly owned by UAE nationals, is required to assist with the registration and licensing process.

2. Register with the Ministry of Economy

The branch office must be registered with the Ministry of Economy, which involves submitting the required documents, including the parent company’s documents and a copy of the agent agreement.

3. Obtain a Trade License

A trade license is required to conduct business activities in the UAE. This license is issued by the Department of Economic Development (DED) in the relevant emirate.

4. Register with the Federal Tax Authority (FTA)

Register for VAT with the FTA, if the value of taxable supplies exceeds the mandatory registration threshold of Dhs 375,000.

5. Open a Bank Account

Open a corporate bank account in the UAE.

6. Obtain Visas:

Obtain the necessary visas for employees.

There are two main types of foreign branch offices in the UAE as commercial and representative.

Commercial Branch Office

A commercial branch office engages in activities identical to those of its parent company and can generate revenue.

Representative Office

A representative office is limited to promoting the parent company’s activities and gathering market information, and it cannot engage in direct sales.

Setting up a branch office in the UAE provides several advantages for foreign companies looking to expand their business.

• Market Access: A branch office allows direct access to the UAE market and the broader Middle East region.
• Business Expansion: Establishing a branch office facilitates the expansion of business operations and increases market presence.
• Tax Benefits: The UAE offers a favorable tax environment, which can result in significant cost savings.
• Repatriation of Profits: Branch offices can repatriate 100% of their profits to the parent company.
• Operational Control: The parent company retains full control over the branch office’s operations.