How to Start a Branch Office in Dubai, UAE? All You Need To Know

If you already have a fully functional company in another country and you want to enter the Middle Eastern market, then a branch office in Dubai UAE is the way to go. Dubai is like the gateway to the Middle East. Its strategic geographic location allows foreign companies to connect itself to the whole region.

With a branch office in UAE, your company can perform business activities such as marketing products, selling goods and services, entering agreements, carrying out transactions, etc.

However, if the parent company is not allowed to perform a certain business activity, then the branch office in Dubai, UAE cannot perform that business activity as well.

What is a Branch Office in Dubai, UAE?

There are certain characteristics that define a branch office in UAE. Foreign companies that want to establish their presence in the UAE can choose between branch office, subsidiary, and representative office. These are three different company structures with their own characteristics and benefits.

Here are the characteristics of a branch office in Dubai, UAE:

It perform the same activities as the parent company.
The branch office must apply for the respective trade license that allows those business activities.
It is not considered a separate legal entity from the parent company.
The parent company will be liable for the debts and obligations of the branch office.
The branch office will be taxed based on their income in the UAE.
The branch office will have the same name as the parent company.

Procedure to Setting up a Branch Office in Dubai, UAE

You can either setting up a branch office in Dubai, UAE by yourself or with the help of the experts. However, if it is your first time starting any kind of company in the UAE, it is highly suggested that you seek help from professionals.

Any mistakes in the company formation process will cause some expensive backs that will cost you both time and money. As the result, the total cost will exceed the cost of hiring the professionals to start the company for you.

Here are the steps you need to follow in order to branch setup in Dubai, UAE:

1. Appoint an LSA (Local Service Agent)

The local service agent needs to be a UAE national (Emirati), and they will act as the intermediary between the relevant governing authority and you. They will obtain licenses, visas, permits, approvals, etc. for you.

Since a lot of the documents and official processes are conducted in the Arabic language, it is necessary for foreign companies to appoint a Local Service Agent.

If required, the Local Service Agent will share ownership of the company but will not take part in any operational or management activities of the company. They will not take a portion of the profit and will only require a minimal yearly fee.

2. File your branch office formation application

To get started, you need to file an application to the Ministry of Economy in Dubai. You need to obtain the initial approval from them to move on to the next steps. That is why you need to fill the application form carefully with authentic information that is free from any error.