Branch Office of Foreign Company

What is a branch office?

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.

How can a Branch office of a foreign Company be set up in UAE?

The setting up of a branch office requires the following formalities:

  • Appoint a local service agent – a UAE national or 100% national owned company as
  • Apply for Approval from the Ministry of Economy
  • Submit necessary documents to get a trade licence from the Department of Economic Development
What are the benefits of setting up a Branch Office of Foreign Company in UAE?
  • Tax Benefit
  • The most attractive feature of a branch office setup is the absence of corporate taxes.
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.

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.

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

What are the documents required to set up a branch of foreign company?
  • 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