A foreign firm can exercise its main activity in the UAE by opening a branch or a representative office, according to Article 313 of the Company Law. The distinction between the two is that a foreign firm that creates a branch in the UAE can engage in any activity for which it has been licenced, whereas a representative office can only engage in promotional efforts for the parent companys products and services. A representative office, unlike a foreign branch, is unable to do business or sell its goods. Before engaging a foreign branch to conduct business in Dubai, the company must first get a licence from the Ministry of Economy, followed by a licence from the Department of Economic Development. Each of these legal structures grants the corporation varying degrees of access to the local market.
Foreign corporations wishing to establish a branch of a foreign company (foreign branch office) in Dubai, Abu Dhabi, Sharjah, or the UAE have two choices under UAE Commercial Law. The first is a full branch of a foreign firm in the Dubai that may perform the same functions as the parent company. A Representative Office, on the other hand, is a marketing office that cannot trade commercially. Both allow international corporations to set up shop in the UAE while maintaining full ownership. As a result, the branch serves as an extension of the parent corporation and has no legal identity of its own. As a result, the parent firm is fully responsible for any operations carried out under this licence. A local service agent is required for both legal forms of international company registration in Dubai.
Foreign professional and service companies can now open a branch in Dubai without having to register with the Ministry of Economy, whereas foreign companies operating as a Representative Office must register with the Ministry of Economy. The major need for establishing a foreign companys representative office or branch in the UAE is to select a Service Agent who must be a UAE national. Standard Documentation Requirements for a Foreign Company Branch Registration For registering a branch in Dubai, a foreign firm must submit the following documents (standard) to the relevant authority(s) and acquire the appropriate approvals.
In the United Arab Emirates, a foreign company can open a branch.
Setting up a foreign branch office in the UAE allows you to participate in all of the parent companys activities. This is contingent on the Ministry of Economys acceptance of the operations indicated in the licence at the time of incorporation.
Establishing a Representative Office in the United Arab Emirates allows you to advertise the parent companys services or products. In the UAE, a representative office is unable to trade commercially or sign contracts.
Incorporating a Branch or Representative Office (RO), which allows 100 percent ownership by the parent company, is a frequent strategy for international enterprises to retain foreign ownership under the UAEs Commercial Company Law. Because these forms lack a separate legal existence, they are viewed as an extension of the foreign corporation, which is nonetheless responsible for their actions.
A Branch is allowed to engage in commercial activity and earn profits in the UAE. It is only permitted to engage in activities that are identical to those carried out by the foreign firm in its home jurisdiction, as stated in its commercial licence.
An RO is not allowed to make a profit in the UAE, and its operations are restricted to marketing and promoting the products and services of its foreign parent firm.
Both Branches and ROs are needed to operate under the authority of a commercial registration and licence in the name of the foreign firm.
The following are some of the advantages of establishing a branch or representative office in the United Arab Emirates:
The following are some of the disadvantages of establishing a branch or representative office in the United Arab Emirates:
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