The government has established tax-free policies
and other business advantages, making it an excellent location to start a company.
The Dubai’s strategic position is another crucial reason why businesses see it as a
key to success. It's a fantastic route connecting the major Eastern and Western
countries.
Thus, we at Dhanguard pioneer at providing you with exemplary services and guidance
to help
you setting up your Branch. Do exempt few minutes to read the below mentioned
information which
has been carefully devised by our Experts to provide you up to the mark services.
What is a Branch office?
Many entrepreneurs and investors fail to comprehend the difference between a Branch
and a Subsidiary after
deciding on Dubai as their next company destination. Each of these legal entities
has a distinct role to
play in their different missions. A branch company is one that is not located in the
same city as the company's
headquarters.
As a result, the branch is not a distinct legal entity. It is a subsidiary of a
parent firm that conducts business
under the same name. It is wholly managed by the main corporation. A branch company
typically has a branch manager
who reports to and accepts orders from a member of the parent company's management
team. A subsidiary, on the other
hand, is an independent corporation despite being owned by a parent company. As a
result, a subsidiary can perform
distinct tasks or operate under a different name than its parent company.
Dubai has a number of key free zones, and many foreign corporations establish
branches there, which provide benefits
to foreign investors. A branch in Dubai must register with the Ministry of Economy
and is prohibited from engaging in
certain restricted activities, such as commercial agencies or restaurants
Furthermore, the structure of this business form allows it to carry out only
activities that are similar to those carried
out by the parent firm in another country. The parent business is responsible for
the debts and responsibilities of the branch
and must appoint a representative in Dubai to manage the branch's affairs.
Mainland Company
Mainland Company is an inland company that can conduct business in the local market
in the United Arab Emirates as well as outside the UAE.
In the case of commercial and professional licenses, mainland enterprises have
complete flexibility to operate.
A local sponsor or a UAE national is required for the formation of a mainland
business in Dubai, and the standard shareholding arrangement
for a Dubai mainland company is that the UAE national Sponsor owns 51 percent of the
company and the foreign shareholder (s) owns 49 percent.
The mainland company offers international investors a flexible legal arrangement in
which the local sponsor is paid a yearly fee or a percentage
of sales/profits.
Benefits of a Mainland Company
The following are the benefits of a Mainland Company:
Being able to trade internationally and expand your reach
Registration on Dubai's mainland gives your business the capacity to deal globally,
which is crucial for many businesses in today's increasingly
connected world. It's also a good idea to think about the future of your
organization. Do you plan to expand your business internationally? Do
you want to be able to freely enter important international markets? In today's
fast-changing environment, businesses who can adapt are valued.
Assume you have a product or service that has gained traction in a certain
country.
You must plan the logistics to rapidly enter in such a situation. Having a mainland
Dubai license essentially means having the freedom and flexibility
to expand and operate your business.
Having the ability to grow your product portfolio is a big plus
As the country approaches and beyond 2022, Dubai's smart city infrastructure is
already moving businesses in new directions, and the capacity to
diversify will become increasingly significant. Choosing a mainland Dubai site
allows your company to expand significantly. When compared to your
free zone competitors, obtaining a Dubai mainland license entails a smoother,
speedier, and less restrictive administrative process.
Possibility of launching a flexible business
While starting a company on the mainland of Dubai may appear complicated, working
with the right company formation specialists can give you with a package
that is both swift and comprehensive. When determining who to collaborate with, see
if the bundle includes the following significant benefits:
- Business formation and registration
- Dubai's national sponsorship included automated legal administration
- A dedicated service agency can expedite and reduce the cost of visa and
immigration processing for your company.
In the end, it is easier to establish a mainland firm in Dubai. As a result, you
should review your three-year business strategy to see if
Dubai mainland registration is the best option for you.
Ability to collaborate with the UAE and Gulf Cooperation Council
states (GCC)
Another benefit of registering on Dubai's mainland is that you'll be allowed to bid
for lucrative government contracts. You may be in a strong
position if your startup provides services that are in sync with government
projects. The UAE's government contract work is worth billions
of dollars per year. You'll be able to establish the framework for long-term
commercial networking and success if your company obtains the
trust of Dubai's authorities. Winning official government contracts in the UAE will
surely boost your company's name and prestige both inside
and beyond the UAE.
You have the freedom to grow your business and your staff
Every business wants to grow and develop, and a mainland Dubai registration allows
you to do just that. You will be allowed to apply
for an unlimited number of visas if you use the mainland route. It’s worth
mentioning that applying for more visas will necessitate
more warehouse or office space, which is typically 100 square feet per visa.
The obligation to rent additional office space is often negotiable with the Dubai DED
if you employ many remote workers who do not require
workspace. Having a company incorporated on the Dubai mainland allows you to spread
your operations throughout Dubai and the UAE. If branch
expansion is a priority for your organization, consider obtaining a Dubai DED
license.
There are no restrictions on trade between Dubai and the UAE
If you register as a Dubai mainland company, you have no restrictions on who you can
trade with or where you can trade in Dubai. Setting up shop
on the mainland allows you to plan for any type of trade without worrying about
breaking your UAE trade license. There are several legal
prerequisites for founding a mainland company in Dubai, including the necessity that
it be sponsored by a Dubai national. By hiring professional
assistance from a reputable business setup provider, you may maintain managerial and
financial control of your company.
The Advantages of Opening a Branch Office
COST
In many countries, the overall cost of establishing a new branch is less than the
cost of creating a new corporation. In the UAE, branch offices
are not required to keep audit reports. Using a small office for your Dubai branch
might also help you save money on administrative and operational
costs.
NOVELTY
Establishing a branch office is a straightforward way to enter a new market.
Establishing a branch office in Dubai is less expensive than launching a
new company from the ground up.
PARTICIPATION
By establishing a branch office on Dubai's mainland, the company would be able to
participate effectively in the UAE's local markets. A Branch Office
enables a corporation to do business directly on the mainland of Dubai without the
requirement for a local distributor or agent.
TIME SAVING
Auditing a large firm with daily financial transactions takes a long time. The
creation of a Branch Office will facilitate the legal tracking of all
transactions between the branch and the parent company.
TAX ADVANTAGE
Businesses may take advantage of the UAE's tax environment to the fullest degree
feasible because it has no corporate or income tax. By opening a branch
office in Dubai, the firm can take advantage of the Double Taxation Avoidance
Agreement (DTAA) and save tax in its home country.
Procedure of setting up a Dubai based Mainland Company’s Branch
Below is a list of the basic contents which can assist you in setting up a Branch
Office of your Company-
Choose the best legal jurisdiction for your business
The foreign corporation must decide whether the Branch Office will be located on the
mainland, in a free zone, or offshore. When starting a business
on the mainland of the UAE, there is a legal need to select a Local Service Agent to
coordinate administrative tasks with government authorities.
Find out who your local service agent is
The Local Service Agent is allocated for a year for an annual charge. Each year, the
contract is renewed, with the option to change agents if there is
a disagreement. In Free Zones and Offshore, there is no requirement to name a Local
Sponsor, and the Manager/Director will be the authorized person
to oversee the Branch Office's commercial activities.
Obtain a Business Name
The Branch Office and the Parent Company in the Home Country must have the same name.
In the case of Mainland Company, a name approval application must
be submitted to the Department of Economic Development (DED). If the investor
decides to establish in one of these jurisdictions, an application must
be submitted to the relevant Free Zone/Offshore authorities.
Attestation of documents by the Government of the United Arab
Emirates
The firm paperwork must be certified by the UAE embassy in the home country, which
must also be counter-attested by the UAE Ministry of Foreign Affairs.
The following documents must be certified by UAE authorities in their home country
and then counter-attested in the UAE.
- Incorporation certificate/Memorandum of Association (MOA), Articles of
Association (AOA)
- Parent Company Good Standing Certificate
- Power of Attorney in favour of General Manager granting him the authority to
open/operate/manage bank accounts on behalf of the Parent
Company
Obtain a permit from the relevant government agency
Submit the certified documents, along with the supporting documentation, to the
appropriate government authorities to obtain a Branch Office
License. There is a fee that must be paid to the authorities in addition to the
filing of the documents. When the paperwork has been reviewed,
the investor will be given the Branch Office License.
Ascertain that all administrative obligations are met
The investor can now apply for a UAE residence visa, open a corporate bank account,
hire employees, process immigration cards and labour
contracts, expand office space, and conduct business in the UAE.
Prepare an application for a branch office
One can open a branch office in Dubai by preparing the relevant documents, filling
out the application form, and submitting it to the Dubai
Economy. It's important to remember that a branch office must have a local service
representative. Dhanguard will assess all of your
company's needs in order to assist you in finding the best local service agent for
your branch office.
The consent of the Board of Directors is required
In order to open a branch office, the board of directors must pass a resolution
declaring the opening of a new branch office.
The Board of Directors has the power to appoint one director to set up the branch
company and oversee its operations.
Branch Offices registration
The corporation can begin the process of registering the branch after the board
resolution is accepted. Following the steps
indicated above, the Company can obtain a business licenseand register its branch on
Dubai's mainland. Dhanguard will
provide you with end-to-end business support services to assist you in quickly
registering your company's Dubai branch office.
Documents
- A Know Your Customer (KYC) form must be completed by each shareholder, director,
and manager.
- A copy of each Shareholder's/Director's/Valid Manager's passport is required.
- Suggestions for Business Names
- Application for Registration and Licensing
- The Certificate of Registration of the Parent Company
- A current extract from the Commercial Registrar or a certificate of incumbency
-
A valid business license
- The parent company's original certificate of good standing
-
The Memorandum and Articles of Association of the Parent Company
- Physical proof of the parent company's address
- A vote of the shareholders or a vote of the board of directors
- Each shareholder, director, or manager must produce proof of residency.
- The most recent audited balance sheet of the Parent Company
- Beneficial Ownership Declaration of the Parent Company (List of Shareholders)
- A letter of no objection (NOC) from the current sponsor is necessary for each
Shareholder/Manager.
How can Dhanguard help?
We at Dhanguard endeavor to give you with simple and quick solutions as well as
competent advice so that
you may successfully create your Branches. Please visit our website or call us for
immediate assistance!
