The United Arab Emirates (UAE) has developed into one of the most significant nations in the world for international trade in recent years, having previously only existed as a trading zone. Numerous thriving businesses, including technology, tourism, healthcare, hospitality, manufacturing, and trading, are based here.
The nation’s ascent to prominence as a corporate hub has been fuelled by several factors, chief among them being its very alluring no-to-minimum taxes. This makes the UAE an attractive opportunity for foreign companies to open their branches or franchises. This blog will serve as a guide on how to register a branch of a foreign company in Dubai and the UAE.
What is a Foreign Branch Company?
An extension of the overseas parent firm, a registered company is known as a foreign branch office in the UAE. The international branch office’s mission is to provide its clientele with services and merchandise from the parent firm.
It is required that the commercial activities of the foreign branch must continue to be the same as those of the foreign parent company since it is not a different legal entity from it. The branch office in Dubai is required to apply for a trade license that matches the parent company’s name and the permitted operations.
Steps to Register a Foreign Company in Dubai and the UAE:
A foreign corporation establishing a branch office in the UAE may own 100% of the business. Below is the detailed procedure for opening a foreign branch office in the UAE. Gatestone Group will assist you with the following steps:
1. MOE’s approval:
The first step is getting approval from the Ministry of Economics (MOE). Gatestone Group will collect the following information before applying for MOE’s approval:
- The name of the general manager in the UAE
- The type of business
- The share capital
- The head office location
2. Obtaining a Commercial License from DED:
Once approved, the Ministry of Economy (MOE) will issue an initial approval letter, which will then be forwarded to either the Abu Dhabi Department of Economic Development (ADDED) or the Dubai Department of Economic Development (DED), depending on your chosen business location. In addition, below are some of the documents that must be submitted:
- The Memorandum of Association (MOA) and Article of Association (AOA) of the parent company
- Certificate of Incorporation of the parent company
- The Good Legal Standing of the Parent Company Certificate Board Resolution establishing the establishment of a Branch Office
- Power of Attorney in the General Manager’s favour, granting him authority to conduct business and oversee bank accounts on the parent company’s behalf.
The Abu Dhabi Department of Economic Development (ADDED) or the Dubai Department of Economic Development (DED) will get the first authorisation letter from the MOE. The necessary documents are:
- An approval from MOE
- Copies of the materials that MOE received
- Tenancy contract (referred to as “Ejari” in Dubai and “Tawtheeq” in Abu Dhabi)
- An engagement letter from a UAE auditor registered locally attests to the company’s existence and provides the parent company’s two-year financial results.
The DED issues a one-year business license that is renewable.
3. Post-incorporation steps:
Once all approvals are secured, the business can move forward with securing an office space. After DED issues the commercial license, employee visas and labour cards can also be obtained. Once the company formation process is completed, business owners should also consider opening a corporate bank account in the UAE.
An additional point to note is that all foreign documents that are intended to be used within the UAE must be translated, authenticated, and legalised, with renewals required annually. Gatestone Group can assist you with document attestation and drafting services in the UAE.
4. MOE’s Registration:
Foreign branch offices established in the UAE require MOE registration. Upon receiving the Foreign Branch Trade License from DED, the entire registration process with the MOE, including payment of necessary registration costs, must be completed to obtain the MOE License within one month. Failure to complete MOE registration within this timeframe may result in a fine of up to AED 1,000 per month, capped at a maximum of AED 10,000 annually.
Gatestone Group will assist in the MOE registration process, which includes creating a login and a secure password. Among the essential conditions for the MOE registration procedure are the following:
i. Bank guarantee: A bank guarantee deposit of AED 50,000 is required for each foreign branch and must be done via a regional UAE bank.
ii. Selecting a local auditor Renewing with the Ministry of Economy requires a UAE-based certified accountant to prepare the branch’s yearly financials and balance sheet. The auditor must provide a unified balance sheet if the foreign company has many branches.
Conclusion
Businesses may find it appealing to establish a foreign branch office in Dubai and the UAE, but the process can be difficult, time-consuming, and complex. Furthermore, it could be an expensive mistake to leave the process unfinished. For this reason, it is advisable to look for expert assistance from reputable business setup consultants like Gatestone Group.
We provide a hassle-free option by handling the procedures and paperwork needed to open a foreign branch office in the UAE. Feel free to reach out to us at either +971 52 410 0849 or +971 4 450 1023 to schedule a meeting with one of our company setup experts. We are here to assist you in any way we can!
FAQs
Foreign businesses are permitted to conduct business anywhere in the city with a branch office within Mainland Dubai.
Non-residents can fully own their businesses in free zones without the requirement for a local partner, guaranteeing complete control. Also, free zones frequently allow business owners to operate without a residency visa, making them available to entrepreneurs based outside of the UAE.
