How to Open a Branch Business in the UAE – Complete Guide 2022
Tuesday June 28, 2022
Starting a business in the UAE is simple and fast. Many foreign businesses jump to the opportunity because the government offers many incentives to international investors to start a business there. Foreign companies keen to extend their operations and create a presence in the UAE can choose to open either a branch office, a subsidiary, or a representative office. Most foreign companies prefer to set up branches and subsidiaries in the UAE since they are permitted to engage in commercial activities and make profits while 100% ownership is retained by the parent company.
The branch office is nothing but an extension of the foreign parent company. It must obtain a trade licence to conduct the same business activities as its parent company. Like any other business in the UAE, it must also register with the Ministry of Economy and provide documentation, such as memorandum and articles of association, power of attorney and more. Here is a complete guide on how to open a branch office in the UAE:
Main Steps to Open a Branch Business in the UAE:
Appoint a Local Service Agent:
The first step for the foreign company is to appoint a local service agent to handle the incorporation procedure. The agent also takes care of the trade name registration procedure.
File an Application with the MED:
Once the trade name is reserved, the branch office will need an initial approval from the Ministry of Economy.
For this, the foreign company must submit an application to the Ministry of Economic Development (MED) along with the service agent agreement and other statutory documents.
Obtain Initial Approval from the MED:
Once you get the approval from the Economic Department of the emirate where you want to establish your branch, the UAE Ministry of Economy will issue a formal agreement on your behalf and forward the application to the appropriate local government authority for approval.
Obtain Approval from the Federal Foreign Companies Committee of the UAE:
The next step in the process of opening a branch office in the UAE is get the permission of the Federal Foreign Companies Committee. The application is then submitted to the committee by the Economic Department, along with a permission letter from the Ministry of Economic and Commerce for the company’s commercial activity.
Obtain a Licence from the MED:
After the branch office gets approval from the above authorities, the Ministry of Finance issues a ministerial licence to the company.
The licence issued by the Ministry of Economy also defines the kind of commercial activity the company will engage itself.
Obtain a Business Licence:
The registration process for a foreign business looking to open a branch office in the UAE begins at this stage. Once the branch office gets registered with the local Economic Department of the emirate, a Business Licence is issued to the company. A branch can obtain a general trading licence, a commercial licence, or an industrial licence.
Register with Regional Commercial Authorities:
Once you have obtained the necessary papers and permits from respective departments, you can register the branch office with the appropriate regional commercial authorities and start your operations.
If you are a foreign company looking to open a branch business in the UAE, our experienced business setup consultants at Creative Zone can help. You can rely on us for complete registration services towards opening a branch in the UAE as soon as possible. Please call us at 800 LICENCE (5423673) to learn more about setting up a branch office in the UAE.
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