Are you thinking about expanding your business to Dubai? Opening a branch of your foreign company in Dubai is a great way to grow and tap into the booming market here. Whether you're selling products, offering services, or just want to promote your company, Dubai offers multiple options for you. Sounds exciting, right?
In this article, we’ll guide you through how to open a branch of your foreign company in Dubai, how much is the license cost, and the process for getting approvals from Ministry of Ecocomy, UAE. Let's dive in!
What is a Branch of a Foreign Company?
A branch office in Dubai is an extension of your foreign company, not a separate legal entity. This means that your branch will carry out the same business activities as your parent company back home. The parent company remains fully responsible for the branch’s operations, liabilities, and obligations. So, if you're a foreign business owner looking to establish a presence in Dubai without setting up a completely new entity, a branch office might just be the perfect solution for you.
Key Note: The branch office can be 100% foreign-owned - no need for local ownership! How cool is that?
What is a Representative Office?
Now, here's something to keep in mind: there’s also the option of setting up a representative office. But wait! It’s a bit different from a branch office. A representative office is all about marketing and promotion; it’s only here to create brand awareness. It cannot sell products or offer services directly. It’s like a megaphone for your parent company’s brand!
How to Set Up a Branch of a Foreign Company in Dubai Mainland
Step 1: Get NOC from the Ministry of Economy (MoE)
The first step is getting a No Objection Certificate (NOC) from the UAE Ministry of Economy. This is a green light from the government, and it's mandatory for all foreign branches.
Documents Required:
(i) Attested copy of your parent company’s incorporation documents
(ii) Business plan for the branch in Dubai
(iii) Attested Memorandum of Association (MOA) and Articles of Association (AOA)
Cost: The NOC fee is AED 7,500 (about $2,000). Once you have the NOC, you're ready to move to the next step!
Step 2: Register Your Company in Dubai Mainland
Now that you have your NOC, you need to register your branch with Dubai's Department of Economic Development (DED). This process is quite similar to setting up any other company in Dubai. Here’s a step-by-step breakdown:
(i) Choose a Trade Name:
Here in the case of branch office, your parent company name will be used.
(ii) Get Initial Approval:
This is the preliminary approval to proceed with your branch setup.
(iii) Draft the MOA:
Your Memorandum of Association (MOA) should align with Dubai laws and your parent company’s objectives.
(iv) Pay the License Fee:
The license fee for a branch office ranges between AED 20,000 to AED 25,000 (around $5,500). Please remember that fees may vary, so get in touch with us to know the latest fee.
Important Tip: You’ll also need to pay a voucher fee, which is 5% of your office lease in Dubai. If you're registering in another emirate, the voucher fee goes up to 10%.
Step 3: Register Your Company with the Ministry of Economy
Congrats! You’ve got your branch registered with DED, but the journey doesn’t stop here. Now, you need to register your branch with the Ministry of Economy. This is a must.
Documents Required:
(i) All incorporation documents of your branch office
(ii) Attested parent company documents
(iii) A refundable bank guarantee of AED 50,000 (or $13500) in favor of the Ministry of Economy. This acts as security and must be issued by a bank operating in the UAE.
Once all the documents are in, your branch will officially be registered. This process typically takes 8-14 days if you’re setting up in Dubai Mainland.
Need help with all this paperwork? Our team at CSPzone is here to assist! With 15 years of experience, we’ll handle the documentation and make the process smooth and stress-free. Contact us today!
Setting Up a Branch Office in a Dubai Free Zone
Did you know? Dubai offers a variety of Free Zones, each with its own set of rules and regulations. Free zones can be a great option if your business is specific to industries like tech, media, or trading. The process and costs are usually lower than the mainland setup, but it all depends on your business activity.
Free Zone Setup Timeline:
Registering a branch office in a Dubai based free zone can take around 10-12 days. Below are some of the Free zone where you can register your branch company.
Dubai Internet City (DIC)
Dubai Internet City (DIC) is perfect for tech companies and IT service providers. Setting up a branch office here can take around 25-30 days. DIC is the hub for tech innovation and digital businesses in Dubai, making it an attractive spot for tech-savvy companies looking to grow.
Jebel Ali Free Zone Authority (JAFZA)
If you’re into trading, logistics, or manufacturing, JAFZA might be the right choice for your branch. With its strategic location near the port, JAFZA offers seamless logistics and trading benefits. The registration process for a branch here can take around 25-30 days. You can read more about JAFZA company formation guide here.
Dubai Multi Commodities Centre (DMCC)
For businesses involved in commodities trading, financial services, and related industries, DMCC is the place to be! DMCC has its own jurisdiction and offers plenty of incentives for international businesses. The registration process here can also take around 25-30 days.
Important Points to Remember
Before we wrap up, let’s go over some key points about opening a branch office of a foreign company in Dubai, UAE:
1. The branch office must perform the same business activities as the parent company. You can’t stray from the business model.
2. Your parent company is responsible for obtaining the necessary licenses from Dubai authorities.
3. A branch is not a separate legal entity from the parent company, so all liabilities fall on the parent.
4. The branch will be taxed on the income earned in the UAE. Be prepared to meet the local tax requirements.
In Conclusion
Opening a branch of your foreign company in Dubai is a fantastic opportunity for growth. The process may seem a bit complex, but with the right guidance and preparation, it’s absolutely easy. Whether you’re setting up business in Dubai Mainland or a Free Zone, it’s important to follow each step carefully to ensure a smooth registration process.
Need expert assistance? CSPzone is here to help you every step of the way! Get in touch with us today, and we’ll make sure your Dubai branch setup is a breeze.
