Why Should You Set Up a Branch Office in the UAE?
To mark your presence in the global marketplace, you need to push your business to new heights. One way of achieving this feat is through a branch office that improves your reach and helps secure customers from all over the world. Establishing a representative office in Dubai not only connects with the global audience but also saves you a handful of money in the long run.
The lenient taxation policies, supportive government, and procedural transparency are some of the reasons why investors always prefer Dubai to set up their branch office. Such offices differ in structure, business model, etc., and primarily include corporate shareholding offices, subsidiary firms, branch companies, and more. You can get in touch with business consultants in Dubai to know more about branch offices.
Steps to Set Up a Branch Office in the UAE
Follow the steps mentioned below to form your branch office in Dubai. Ensure that you adhere to the guidelines and fulfill all the requirements within the specified timelines.
1. You need to submit your application for a branch office to get things started. Moreover, you need to partner with a local service agent and mention the same in the application.
2. Once you’re done with the application submission, obtain consent from the DED or the concerned jurisdiction. You have to approach the Ministry of Economic and Commerce for the same.
3. Next, you need to obtain approval from the UAE Federal Foreign Companies Committee. You’ll receive a permit letter from the governing authority if your application goes through.
4. After receiving all the above-mentioned approvals, you can finally get the license to start your branch office. All the permissible business activities for your branch license are mentioned in the same document.
5. When you have the consent of the governing authorities along with the license, you now have to register with the Ministry of Economic and Commerce Companies Register. Registration with the Chamber of Commerce and Industry also needs to be done.
Why to Form a Representative Office in Dubai?
Branch offices in Dubai are a must-have for organizations aiming for global recognition and want to increase their reach. Be it a local firm or a branch of a foreign company in Dubai, all enjoy certain benefits granted by the government. Following are some of the key reasons why you should form a branch office in the UAE:
1. Gets 100% Foreign Ownership
The branch of a foreign company in Dubai is allowed to carry out all the activities similar to its parent company. The representative office would not have a separate identity from the parent company. Rather, it’s considered an extension. The parent company holds a 100% share of its branch office. The service agent charges a fee for his services but doesn’t have the rights to share the profits of the company, giving full ownership rights and freedom to take decisions to the parent company. It reduces the overall cost of setting up a branch office in Dubai.
2. Benefit of The UAE Tax System
One of the biggest advantages of forming a branch office in the UAE is the lenient taxation laws. The UAE doesn’t charge any corporate tax on the profits earned by the branch office of foreign companies. It implies the company will retain all the money earned by them. Apart from this, the profits earned abroad are not taxable in the home country (in most cases), allowing the company to enjoy 0% corporate tax.
3. Rent an Office Anywhere
To form a branch company in Dubai, you can choose any of the several free zones, the Dubai mainland, or an offshore establishment. Branch offices formed in a free zone can rent offices within the free zone. On the other hand, branch companies set up in Dubai mainland can rent offices anywhere in Dubai. You can choose any location that suits the requirements of your business. It helps companies analyze the market conditions of different locations and finally choose the one with appropriate infrastructure and cost benefits.
4. Convenient Administrative Process and Auditing
Forming a representative office in Dubai is an easy and quick process. It only takes a few days to get your things done with a ready premise. Furthermore, the branch office can choose not to set up a finance department as you will not be asked to submit audited accounts in the UAE. But if the parent company wants its book to be audited, then it can opt to do so as all the transactions between the parent company and branch office are legally tracked providing a transparent audit.
5. Global Reach Leads to Global Trade
From a business point of view, the UAE provides a location from where reaching out to clients from Europe, Asia, and Africa is quite convenient. International exposure at such a level is definitely an opportunity for any business. With the assistance of a local distributor, you can also target the local market of Dubai which itself provides ample opportunities. The overall infrastructure and development of Dubai attract businesses from all over the world. You can reach out to any of them to trade and carry out business activities.
Documents Required for Setting Up a Branch Office in the UAE
Here’s the list of all the necessary documents required to set up a representative office in Dubai:
- Registration Certificate/Trade License: the documents should specify all the details related to the company’s trading name, type, date of registration, and authority where the company is registered.
- Board Resolution: it includes the decision of the company to set up a branch office in UAE, and the details of officers, assigned representative, and the signatory of the bank account.
- Certificate of Good Standing: this indicates that the company is sound, valid, and in good standing.
- Article and Memorandum of Association: these documents include the type of business activity, full list of shareholders and partners, type of structure, and powers/authority of directors and managers who have signed the Board of Resolution.
- Certificate of Incumbency/Extract from Registry: it includes the list of current shareholders, directors, secretaries, and officers in the company.
- UBO Declaration Form: it specifies the partners who hold more than 5% share in the company.
Shuraa – Your Business Companion
At Shuraa Business Setup, we simplify business formation for our clients. If you’re looking forward to opening a branch office in Dubai, all you need to do is collaborate with us, and we’ll take care of the rest. Our business experts hold prolific experience in the domain of business establishment in Dubai, and they’ll guide you step-by-step for the hassle-free formation of your representative office. Be it paperwork, certification, rental space, or anything else – we are there for you at all times. Connect with us today to turn your business dream into reality, and we’ll be happy to assist you.
Consult with Shuraa today by calling us on +971 44081900. For chat assistance, send a WhatsApp message at +971 50 777 5554. You can also write to us at [email protected]