For a company headquartered in another country, the UAE company laws allows it to operate in the country in two ways – as a branch of the parent company or have A representative office of the company in the Emirates. The major difference between the two is that, a branch office can do all the business activities same as the parent company but the representative office can be used as a marketing section of the company in UAE. In addition to this There are limitations to the no of employees that can be hired in to representative office. A branch office however has limited regulations and can have 100% foreign ownership, provided there is a local agent appointed for them.
The setting up of a branch office requires the following formalities:
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.
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.
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