Start a branch of a foreign company in Dubai, UAE: Step-by-step
If you’re looking to start a business in Dubai and the wider UAE, you are faced with a few options. The most common is to apply for a DED license and open a business in the mainland. This option allows you to set up and trade freely throughout the Emirates.
Another popular option is the free zone business. In this case, you would need a local agent to trade directly with the UAE market, but you benefit from 100% customs tax exemption, zero currency restrictions, and the freedom to repatriate your capital and profit.
If you already have a business elsewhere and wish to gain a presence in Dubai, another option is the foreign branch office.
The branch office acts as an extension of your existing company. So, while branches are permitted to trade freely in the UAE, they can only conduct the same activities as the parent company.
They are a popular choice with foreign entrepreneurs as they can be 100% foreign-owned, benefit from the UAE’s 0% tax rate, and allow you to get a foot in the door without starting a whole new business.
If this sounds like a good option for your current business, below is everything you need to know to get up and running with a foreign branch in the UAE.
What is the difference between branch and representative office in the UAE?
Branch offices are often confused with representative offices. And while there are some similarities, there are also a few key differences. Most notably, branch offices are permitted to operate and earn a profit in the UAE, whereas representative offices must outsource all work back to its parent.
But while a foreign branch is an extension of the foreign company and not a separate legal entity, it must still apply for a trade license in the UAE.
How can I open a foreign branch in Dubai?
With decisions like choosing a company name and selecting business activities not necessary, the whole foreign branch set-up process consists of just five simple steps.
Step 1: Appoint a National Service Agent
The first step is to appoint a National Service Agent (NSA). This is a requirement of operating a foreign-owned branch in the UAE. The agent then fronts the trade name registration and application on your behalf.
It is important to stress that you always retain 100% ownership of the branch. The NSA has no equity in the business nor any say in management or decision making.
Step 2: Apply for your license
Your service agent will handle this process for you. It involves the issuing of approval letters from the Ministry of Economy (MoE) and a trade license by the Dubai Department of Economic Development (DED).
Your application should include details on the nature of your business, head office address, share capital arrangements, and the name of the general manager appointed to run the branch office.
Step 3: Office space
With your license approved, you will need to secure an office location in the UAE. Details of the lease should then be submitted to the MoE.
Step 4: Visa
As well as your corporate services license, you will also need a residency visa to work in the UAE. The visa application process consists of several steps, including biometric scanning, a blood test, medical test, and a chest x-ray.
As the holder of a corporate services license, you can also sponsor others for their visas too. This could be a spouse, parent or child, or a domestic worker such as a housekeeper.
Step 5: Corporate bank account
Finally, you will need a corporate bank account to trade in the UAE. Unfortunately, it is not always easy for non-GCC citizens to secure banking services, so it is once again a good idea to partner with a local expert at this stage.
Business Incorporation Zone (BIZ) can help with all of the above steps, acting as your agent and managing the license, visa, and bank account opening applications on your behalf.
Cost of setting up a branch office in Dubai
The total final cost of opening a foreign branch in the UAE will depend on where you set up and the nature of your business activities. However, as a general guide, you should probably expect to spend in the region of AED 30,000-50,000.
For a full and personalised quote, contact the expert team at BIZ.
Are you ready to open your foreign branch in Dubai?
Hopefully, this guide has made clear that if you’re armed with the right knowledge, setting up a foreign branch in Dubai doesn’t have to be overly complex.
That being said, it does require a level of prior knowledge of the process. What’s more, it is important to note that the application process is only straightforward if your license application is complete at the time of submission and free from errors.
To help you ensure that this is the case, it’s a good idea to work with a company formation specialist such as Business Incorporation Zone (BIZ) when establishing a new company in the UAE.
We are a team of company registration professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.
As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.
We also offer visa and immigration services and can handle all government formalities, permissions, work permits and visa applications that are required to trade in the UAE.
In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with running your business.