Opening a Branch Office in Dubai comes with several benefits for the investors. It helps overseas investors as well as Free Zone companies to expand to the local UAE market by setting up a branch in the Dubai Mainland.
Investors globally prefer UAE to establish their branch company to drive the local market penetration. Large companies with a global presence choose UAE for setting up their branch office to tap into the UAE and Middle East region.
Steps Involved in Opening a Branch Office in Dubai
To start a branch office in Dubai of a Free Zone Company or Mainland Company, there are a few steps to be followed. For opening a branch of a foreign company the procedures and steps vary slightly.
To know more read: Subsidiary Company in UAE.
1. Prepare an Application to Open the Branch Office
One can set up a Branch Office in Dubai by preparing the required documents, filling the application form, and submitting it to the Dubai Economy.
It is important to note that for a branch office there is a mandatory requirement of having a local service agent.
Aurion will assist you in finding the right local service agent for your branch office by assessing all your business requirements.
2. Obtain the Required Permits
There are few permits to be obtained to start a branch office in Dubai for selected business activities such as Healthcare, Electronics (Mobile) Trading, Education, etc. The Ministry of Economy has to approve the application by assessing the requirements and nature of business activities.
For a foreign company branch, the process includes further attestation from the Embassy of UAE in the parent company’s home country. Also, a clearance from the Ministry of Foreign Affairs in UAE.
3. Secure the License from the Ministry of Economy
Upon submitting the required documents to the Ministry of Economy and paying the required fee, the branch office license will be issued.
4. Register with the Chamber of Commerce
Once the branch office license is obtained, register the company with the Chamber of Commerce in the UAE.
Procedure to Open a Branch Office of a Free Zone or Mainland Company in Dubai
1. Approval from the Board of Directors
To open a branch office, the board of directors must pass a resolution stating the opening of a new branch office.
The Board of Directors can appoint one director to carry out the setting up of the branch company and oversee the operations.
2. Branch Office Registration
Following the board resolution, the company can proceed with branch registration. The Company can follow the above-represented steps to secure its business license and register the branch in mainland of Dubai.
Aurion will assist you with end-to-end business support services to register your company’s branch office in Dubai in the most comfortable way.
For a Free Zone Company with a service License category, the cost of setting up a branch office in Dubai is Approx. AED 30,000. The branch office will have the same name as the Parent Company with ‘Branch’ as the Suffix. It is entitled to conduct all the business activities of the parent company.
Why Start a Branch Office in Dubai?
1. Get 100% Foreign Ownership
The branch office is not considered a separate legal entity but as an extension of the parent company.
Hence enjoy 100% ownership in the branch office and conduct the same business activities as the parent company.
2. Rent an Office Anywhere in UAE
The branch office can be established anywhere in Dubai as per the business requirements of the company shareholders.
The company can opt for renting office space at a lower cost in Dubai Mainland to keep the administrative cost low. For organizations that do not require an office space at the center of the city, they can opt for offices with low rent anywhere in UAE.
3. Trade-in Mainland of UAE
Setting up a branch office in the mainland of Dubai enables the company to actively trade-in the local markets of UAE.
Branch Office allows a business to trade in the mainland of Dubai directly without the requirement of a local distributor, or agent.
4. Tax Benefits
UAE has Zero Corporate and Income Tax, and Companies can gain maximum benefits out of this tax regime.
By setting up a Branch Office in Dubai, the company can leverage the Double Taxation Avoidance Agreement (DTAA) and save tax in the home country.
5. Audit Report Requirement
Auditing a large company with daily financial transactions is tedious. Setting up the Branch Office will help in legally tracking all the transactions between the branch and the parent company.
6. Low Administrative Cost
The overall cost of opening a new branch is lower than setting up a new company in multiple countries.
In UAE there is no requirement for branch offices to maintain audit reports. Also, taking a small office for your branch in Dubai will keep the administrative and costs low.
7. Cost-Effective Route to New Markets
Setting up a Branch Office provides an easy way to enter a new market. The running cost of a branch office in Dubai is relatively lower than setting up a new company as a whole.
Documents Required for Opening a Branch Office in Dubai
- Trade name Approval Certificate
- Parent Company Documents – Memorandum of Association, Articles of Association, Certificate of Incorporation, and Certificate of Good Standing
- Board Resolution for setting up a branch office in Dubai
- Power of attorney for the General Manager
- General Manager’s Passport copy
- 2-Year Audited financial statements of the parent company
- List of major business activities and trade activities that will be carried out in Dubai
- Local Service Agent Agreements and identification documents copy.
Opening a branch office seems to be a feasible option for free zone companies or other mainland companies for their expansion into the UAE local market more aggressively and exploring new business opportunities.
To know more about opening a branch office in Dubai, talk to our expert consultants right away!
Contact: Aurion Business Consultants