Open a Branch Office in Dubai: Procedure & Advantages

Are you a business owner or investor wishing to grow your operations within Dubai’s growing market? Opening a branch office in Dubai can be a strategic move that offers numerous benefits, such as access to a rapidly growing economy, a strategic global location, and a business-friendly environment. In this comprehensive guide, we will walk you through the procedure and benefits of starting a branch office in Dubai, while highlighting the advantages of doing so. Read on to discover how OnDemand International can simplify this process for you.

What is a Dubai Branch Office?

A Dubai branch office, in the context of business and corporate entities, refers to a satellite office or a subsidiary of a company that is located in Dubai, a city and emirate in the United Arab Emirates (UAE). This type of office is typically established by a foreign company that wishes to expand its presence or operations in Dubai or the wider UAE.

Why Start a Branch Office in Dubai?

Opening a branch office in Dubai allows foreign businesses to establish a legal presence in the United Arab Emirates. Unlike a local limited liability company (LLC), a branch office can be fully owned by a foreign company and operates under the same legal status as its parent company. This means that the branch office conducts business activities under the parent company’s name and has the same brand recognition and reputation.

Dubai’s strategic business location also offers numerous advantages for foreign investors. Its proximity to major markets in the Middle East and Africa provides easy access to a wide customer base. Additionally, Dubai’s robust infrastructure, business-friendly regulations, and tax advantages make it an attractive destination for businesses looking to expand their operations.

Types of Branch Offices in Dubai

There are two types of branch offices in Dubai: those located in Dubai Mainland and those located in free zones. Each type has its own set of characteristics and regulations.

Dubai Mainland Branch Office

A Dubai Mainland branch office allows foreign companies to operate anywhere in the city. However, they are required to have a local service agent (LSA), who is an Emirati national or a company fully owned by UAE citizens. The LSA acts as an intermediary between the branch office and the government authorities, assisting with obtaining licenses, permits, and approvals. It is important to note that the parent company will be liable for the debts and obligations of the branch office.

Free Zone Branch Office

A free zone branch office is established within one of Dubai’s many free zones. These zones offer various incentives such as 100% foreign ownership, tax exemptions, and simplified company setup procedures. Free zone branches are required to register with and obtain a license from the relevant free zone authority. They are also limited to conducting their business activities within the boundaries of the free zone.

Procedure to Open a Branch Office in Dubai

Let us now walk you through the steps of opening a branch office in Dubai:

Appoint a Local Service Agent 

The local service agent must be a UAE citizen (Emirati), and they will function as a go-between for you and the necessary governmental authorities. They will get licenses, visas, permits, and permissions on your behalf.
Because many paperwork and official procedures are done in Arabic, international enterprises must designate a Local Service Agent.
If necessary, the Local Service Agent will share business ownership but will not participate in any operational or managerial operations. They will not take a cut of the profits and will just charge a small annual fee.

Submit your application for the establishment of a branch office.

To begin, you must apply to Dubai’s Ministry of Economy. To proceed to the following stages, you must first acquire their consent. That is why you must carefully fill out the application form with accurate and error-free information.
Your local service agent will assist you in filling out the application form to verify that there are no mistakes. A service agent agreement is also necessary to formally indicate that the local service agent will be operating on your behalf to launch the business.

Obtain the necessary licenses from the Ministry of Economy and the Federal Foreign Companies Committee.

To get clearance from the Ministry of Economy, you must submit the necessary documentation. To begin doing business in the UAE, you will also require clearance from the Federal Foreign Companies Committee.
You do not need to worry since the application will be sent to the Federal Foreign Companies Committee by the Ministry of Economy. If all goes well, you will get a permission letter and approval for your branch establishment in Dubai, UAE.

Obtain the DED’s Business Trade License.

The UAE Department of Economic Development is in charge of issuing business licenses to new enterprises in Dubai. After receiving clearance from the Ministry of Economy and the Federal Foreign Companies Committee, you may apply to the DED for a commercial trade license.

Remember that you may only engage in the business activities for which you registered when you applied for the business trade license. As a result, while applying for a trade license, it is advised to carefully identify all-important company operations. The business trade license must be renewed on an annual basis.

Apply to the Commercial Authorities

The last step after successfully registering your branch office and obtaining your business license is to register with the commercial authorities.

Documents Required to Start a Branch Office in Dubai

The list of documents required to open a Dubai Branch Office is mentioned below:

• Filled out application documents for the branch office’s registration.
• The certificate of trade name reservation.
• The Parent Company’s board of directors approved the establishment of a branch office in Dubai, UAE.
• The parent company’s Memorandum of Association (MOA) and Articles of Association (AOA).
• A copy of the parent company’s Certificate of Incorporation.
• Copies of the Company’s Director’s passports.
• A letter of approval from the parent firm.
• A power of attorney for the Branch Office’s director.

Advantages of Opening a Branch Office in Dubai

Before we delve into the steps and requirements, let’s explore the advantages of establishing a Dubai Branch Office:

• Access to a Thriving Economy: Dubai boasts a robust and diversified economy with key sectors like finance, real estate, tourism, and trade. By opening a branch office here, you can tap into a wealth of opportunities and gain access to a vast consumer base.
• Strategic Global Location: Dubai’s strategic worldwide location between Europe, Asia, and Africa makes it a perfect center for enterprises with global ambitions. It offers easy access to emerging markets and facilitates international trade.
• Business-Friendly Environment: The Dubai government has created a conducive business environment with various incentives and policies to attract foreign investors. You can enjoy 100% ownership of your branch office and benefit from tax exemptions.
• Reputation and Credibility: Having a presence in Dubai lends credibility to your business. It signals to clients and partners that you are committed to expanding your operations globally and can enhance your brand’s reputation.
• Strong Infrastructure: Dubai boasts world-class infrastructure, including modern office spaces, reliable transportation, and cutting-edge technology, ensuring your branch office operates smoothly.

Cost to Set up a Branch Office in Dubai

The cost of establishing a branch office in Dubai might vary depending on a variety of factors. The typical cost of creating a branch office is roughly AED 100,000, which includes a refundable beginning charge of AED 50,000. However, it is crucial to remember that these prices are subject to change based on UAE rules and regulations. To correctly assess the cost of opening a branch office in Dubai, it is important to remain up to speed on the newest criteria and rules.

How to Register for a Branch Office in Dubai with OnDemand International

Registering your branch office in Dubai involves liaising with various government departments and complying with specific regulations. To simplify this process, consider partnering with a reputable business setup service like OnDemand International.

OnDemand International specializes in assisting entrepreneurs and investors in establishing branch offices and companies in Dubai. From selecting the proper local sponsor to securing the essential licenses and permits, our expert team will walk you through every step of the process. We simplify the registration process, saving you time and effort while assuring regulatory compliance. 

Conclusion

Opening a branch office in Dubai offers incredible opportunities for business entrepreneurs and investors. You can tap into a thriving economy, benefit from a strategic global location, and enjoy a business-friendly environment. The procedure becomes more manageable and less intimidating with the proper local sponsor and skilled help. OnDemand International is your trusted partner in simplifying the setup of your branch office in Dubai.