Opening a branch office in Dubai provides foreign investors with a gateway to expand their business in the Middle Eastern market. A branch office allows foreign companies to carry out activities such as marketing and selling products, conducting transactions, and promoting services. Interestingly, even if the parent company is restricted from performing certain activities in its home country, these can be undertaken in Dubai. Setting up a branch office involves steps like appointing a Local Service Agent (LSA), submitting an application, and obtaining the necessary approvals. This article explains the concept of a branch office, its benefits, and the process of establishing one in Dubai. Expand your foreign company to Dubai seamlessly with a branch office through Auriga Accounting pvt. ltd.
What Is a Branch Office in Dubai?
A branch office in Dubai acts as an extension of your existing foreign company within the emirate. Unlike a separate legal entity, it operates under the parent company’s name, regulations, and liability, allowing you to establish a physical presence and conduct business activities permitted by your trade license.
Key Features of a Dubai Branch Office:
Extension of the Parent Company: Operates as part of the parent company, inheriting its name and responsibility for debts and obligations.
Licensed Business Activities: Must obtain a trade license specifying permissible business operations.
UAE Taxation: Profits generated in Dubai are subject to UAE taxation.
Strategic Market Entry: Provides a cost-effective way to enter the Dubai and UAE markets, leveraging its business-friendly environment.
Understanding these characteristics helps you determine if a Dubai branch office aligns with your business expansion plans.
Why Establish a Branch Office in Dubai?
Advantages of a Dubai branch office include:
Streamlined Market Entry: Grants a legal presence in the UAE, allowing access to the Middle Eastern market.
100% Foreign Ownership: Unlike a local LLC, branch offices allow full ownership by the foreign parent company.
Simplified Setup: Faster and easier to establish than a new company, enabling quicker operations.
Leverage Brand Recognition: Operates under the parent company’s name, enhancing credibility.
Operational Flexibility: Can conduct business as per the trade license, tailored to market strategy.
Tax Advantages: Typically exempt from corporate income tax; free zones provide additional benefits.
Strategic Location: Dubai’s position facilitates trade with neighboring regions and global expansion.
Pro-Business Environment: The UAE encourages foreign investment with streamlined regulations and efficient infrastructure.
Documents Required for a Branch Office in Dubai
1. Application Forms: Obtain and complete the latest forms from the Ministry of Economy (MoE).
2. Parent Company Documents:
Certificate of Incorporation or equivalent proof of legal existence.
Memorandum and Articles of Association (MOA & AOA).
Board Resolution approving the establishment of a branch office.
No-Objection Certificate (NOC) from the home country government (if required).
3. Local Service Agent (LSA) Documents:
Passport copy and valid Emirates ID of the LSA.
LSA trade license copy (if applicable).
Power of Attorney authorizing the LSA to act on behalf of your company.
How to Open a Branch Office in Dubai
Step 1: Understand Legal Requirements
A branch office requires a Local Service Agent (LSA), a UAE national or a company wholly owned by UAE nationals. The LSA helps with visas, work permits, and government approvals. Register the branch with the Dubai Department of Economic Development (DED) and obtain a trade license.
Step 2: Choose a Location
Options include mainland Dubai or free zones.
Mainland: Access to the local market and operations across UAE.
Free Zones: Tax exemptions, 100% foreign ownership, and simplified registration.
Step 3: Appoint a Local Service Agent (LSA)
Hire a reliable LSA through a professional firm or directly. The LSA helps navigate legal and regulatory requirements.
Step 4: Obtain Initial Approval
Submit documents to the Ministry of Economy and Federal Foreign Companies Committee, including:
Parent company incorporation certificate
Notarized board resolution
LSA agreement
Once approved, proceed with branch registration.
Step 5: Get the Trade License from DED
Submit the required documents, including initial approval and LSA agreement. The DED reviews the application and issues the trade license.
Step 6: Obtain Visas and Work Permits
After registration, apply for employee visas and work permits. The LSA assists with approvals from the General Directorate of Residency and Foreigners Affairs.
Cost of Setting Up a Branch Office in Dubai
The average initial cost for a branch office is around AED 100,000, which includes a refundable startup deposit of AED 50,000. Costs may vary depending on regulations and specific business requirements.
This version is structured into clear sections, highlights benefits, and simplifies the process steps for better readability.
If you want, I can also create a concise checklist version of the Dubai branch office setup process so it’s easy for readers to follow step by step.
About the Author
Dakesh
Dakesh simplifies complex legal regulations into practical, actionable guidance, enabling entrepreneurs to stay compliant while growing sustainable and scalable businesses.
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