Foreign Branch Company in Dubai

April 17 2019

In some instances, such as specialised activities like Engineering Consultancy or Banking activities, the DED allows for the setup of a representative office or a foreign Branch Company in Dubai.

The main difference between a foreign Branch Company and a representative office is that the representative office can only be used for market promotion activities, and hence cannot invoice customers. These companies can bid for Government contracts, as opposed to free zone companies, which are usually not allowed to do so. 

Businesses can be registered anywhere in the mainland; a wide range of choice – from the lanes of old Deira to the shining towers of Business Bay.

What activities can be carried out by the Foreign Branch Company in Dubai?

A foreign Branch Company can apply for specific professional activities, commercial and industrial activities.

An additional approval is required from the Ministry of Economy, which is a UAE Federal Ministry.

Who is the owner of a foreign branch company, or representative office?

A foreign Branch Company is100% owned by the foreign parent company.

A Branch of Foreign Company also requires a UAE National to act as the local service agent, who liaises with the Government authorities, including the Ministry of Labour. The local service agent does not have any shares in the branch company.

Does the Foreign Branch Company need to appoint a manager?

A foreign Branch Company must have a manager to represent the foreign company. The name of the manager will be on the license and he/she is responsible for the day-to-day activities of the company.

A foreign Branch Company can be registered on a desk space as well. However the desk space allows for only one employee visa. Most startup licenses prefer to start initially with a desk space, and then shift to a full office once the business is more well established. 

Click here to enquire about desk space packages for professional licenses in Dubai. 

Trade names

The trade name of a foreign Branch Company in Dubai will have to be the same as the parent. A suffix ‘Dubai Branch” will be added to this name. 

Advantages of setting up a foreign branch company in Dubai mainland

Easy setup– The license can be setup within a few days, once the attested corporate documents are ready. You can set up an foreign branch with a desk space, unless more visas are required.

Cost-effective– Unlike many free zones, setting up in Dubai mainland is economical, since you do not need to commit to a large office space in the first year.

Flexibility of doing business– Unlike free zone companies, foreign branch companies in Dubai can do business anywhere in the UAE, and in other countries as well. The branches can also enter into trade agreements with Government entities.

Range of locations– Unlike a free zone, which is a designated area, you can set up an branch company in any area of Dubai, including Deira, Bur Dubai, Business Bay and anywhere else on the Dubai mainland.

Options for multiple visas– Branch companies can apply for unlimited visas when setting up on the mainland. The number of visas allowed depends on the office space taken, which is usually calculated at 80 square feet per visa. In some cases, the DED is flexible on this allocation, for example in instances where the Dubai branch company has a large outdoor sales force, or cleaning services.

Sponsor of dependents– The foreign branch in Dubai can apply for multiple visas for their employees, and the shareholders and employees can sponsor visas for their dependents – spouse, child, parents, maid, cook etc.

A foreign Branch Company can open bank accounts anywhere in the UAE and operate in a tax-free environment, with 100% repatriation of profits.

You can open a branch of a Dubai-based company, a free zone-based company, a UAE-based company and a GCC based company as well.

How to apply for a foreign Branch Company in Dubai?

The process of applying for a Branch of a Foreign Company in Dubai is as follows:

  • Select business activity – this should be the same activity as the parent company.
  • Find a UAE National to act as local service agent.
  • Submit an application to the UAE Ministry of Economy
  • Reserve of a new trade name. Click here to know more details on acceptable trade names.
  • Sign the Local Service Agent Agreement in the Dubai Courts. Click here to access a draft Local Service Agent Agreement.
  • Rent office space in Dubai. You can choose from business centre desk options as well.
  • Pay the DED fees and obtain the trade license.
  • Submit the license to the UAE Ministry of Economy and obtain the required permit.

Costs of a foreign Branch Company in Dubai

The cost starts from AED 25,000, and depends on the activity chosen, and office space that the company rents. Foreign Branch Companies now have the option of setting up such a license with a desk space as well. Additional costs include the registration of the company with the Ministries of Immigration and Labour and visa costs.

Click here to download a factsheet that details the main details and costs incurred in setting up a Branch Company in Dubai mainland.

Advantages of setting up a foreign Branch Company in Dubai

Easy setup – The license can be setup within a few days, sometimes even in a few hours, if you meet the required criteria. You can set up such a license with a desk space, unless more visas are required.

Cost-effective – Unlike many free zones, the Dubai company is economical, since you do not need to commit to a large office space in the first year.

Flexibility of doing business – Unlike free zone companies, Dubai branch companies can do business anywhere in the UAE, and in other countries as well. The company can also enter into agreements with Government entities.

Range of locations – Unlike a free zone, which is a designated area, you can set up a Dubai Branch Company in any area of Dubai, including Deira, Bur Dubai, Business Bay and anywhere else on the Dubai mainland.

Options for multiple visas – Dubai companies allow for unlimited visas when setting up on the mainland. The number of visas allowed depends on the office space taken, which is usually calculated at 80 square feet per visa. In some cases, the DED is flexible on this allocation, for example in instances where the Dubai company has a large outdoor sales force.

Sponsor of dependents – The branch company can apply for multiple visas for their employees, and the shareholders and employees can sponsor visas for their dependents – spouse, child, parents, maid, cook etc.

A mainland company in Dubai can open bank accounts anywhere in the UAE and operate in a tax-free environment, with 100% repatriation of profits.

We provide turnkey solutions for setup in Dubai, including providing a UAE National service agent and desk/office space options.

Speak to one of our experts who can guide you through the process of setting up a foreign Branch Company in Dubai, today!