Branch Office Of Foreign Company

A Branch Office that is legally part of its parent company is permitted to perform contracts or conduct other activities which are specified in its license and are similar to those of its parent company. Each branch can have several sub branches, with the same licensing and registration procedures.On the other hand, a Representative Office is limited to promoting its parent company’s activities, i.e. gathering information and soliciting orders and projects to be performed by the company’s head office. In addition, Representative offices are also limited to the number of employees they may use.

Benefits

  1. Tax Benefit
    This is perhaps the most attractive feature of a branch office setup. UAE corporate tax stands at 0%, making the country very lucrative for establishing a branch.
  2. Audit Stream
    Audit process becomes more complicated when it comes to an international level. Segmenting and establishing a branch office helps to a great extent. The funds that flow between the parent and branch office can be easily tracked and it makes the audit process much easier.
  3. Low Administrative Burden
    Setting up a branch office helps to a great extent as it removes the need for separate finance function and audited accounts need not be submitted.
  4. The Cost-Effective Route into a New Market
    Setting up a representative office normally doesn’t require share capital. Only the standard fees, applications, and initial deposits need to be cleared, which turns out to be quite cost-effective

Required Documents

  • Company registration certificate
  • Company profile
  • Board of Directors’ agreement to establish a branch
  • Copy of Article of Association
  • Power of Attorney to the representative
  • Financial statement of the past two years
  • Contractual agreement with local agent
  • Details of the local representative

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