If you’ve spent any time researching company formation in the UAE, you’ll know that the most popular setup options are in the mainland and in free zones.
Both offer many incredible benefits. Mainland companies can trade from anywhere in the UAE and take on potentially lucrative government contracts. Free zone companies, on the other hand, can take advantage of capital and profit repatriation, customs tax exemption, and a lack of currency restrictions.
But while both are excellent options for entrepreneurs new to the UAE, they are not the only ones. If you already own a business elsewhere, it can be much faster and more cost-effective to open a foreign branch office.
You can run this branch office just as you would your existing business. It is simply an extension of your company, with no separate legal entity. It is permitted to carry out the same business activities that you trade in elsewhere, but right here in the UAE. It also trades under the same name as your existing business.
And with the help of Creative Zone, setting up a foreign branch office is easier than ever.
In this article, we will dive into:
- The difference between branch and representative offices in the UAE
- The steps to starting a foreign branch office in the UAE
- The cost of starting a foreign branch office in the UAE
The difference between branch and representative offices in the UAE
While they are certainly similar, branch offices are not to be confused with representative offices.
When you open a branch office, it is permitted to trade and earn a profit in the UAE –provided it only carries out the same activities as its parent.
A representative office on the other hand is not permitted to earn a profit in the UAE. It can only promote and drive business to its parent company.
The steps to start a foreign branch office in the UAE
Two of the early steps when incorporating a new business in the UAE are choosing a company name and outlining your business activities. However, as a branch operates in the image of your existing business, these steps are not necessary.
For that reason, the branch office company formation process is even more straightforward – with the right support, of course. Creative Zone can guide you through the following process.
Step 1: Appoint a service agent
All branch offices require a service agent. The agent is responsible for registering your trade name and will manage the approval and application processes on your behalf. However, agents have no stake or control over your business.
Step 2: Apply for your branch license
This is a two-step process. First you must gain approval from the UAE Ministry of Economy (MoE). If successful, you will be issued with a letter of approval to submit when you make your license application.
Your license application is made to the Department of Economic Development. At this stage, you will also be required to submit some or all of the following documents:
- Proof of ID and address for directors and shareholders
- Passport copies for shareholders and directors
- Copy of trade name confirmation
- Memorandum of Association (MOA)
- Articles of Association (AOA)
Step 3: Find an office
Every branch needs an office, so you’ll need to secure a premise in the UAE. Once you have signed on the dotted line, your lease must be submitted to the MoE.
Step 4: Visa and bank account applications
There are two final applications to make before you can start operating your branch office in the UAE. The first is to apply for your visa. As part of this process, you will need to submit biometric information and undergo a medical exam.
You can also sponsor your dependants for their visas, such as your parents, spouse or children.
Finally, you will need a corporate bank account to trade in the UAE. Creative Zone can assist with this process too, understanding your requirements before advising on the most suitable options.
How much does it cost to open a foreign branch office in the UAE?
Without a clear understanding of the nature of your business, it is difficult to offer an estimate of the cost of setting up a foreign branch office the UAE.
For a full breakdown of the costs involved, get in touch with Creative Zone to arrange a free consultation.
How to open a foreign branch office in the UAE with Creative Zone
All businesses require a license to trade in the UAE – even foreign branches. And while the steps required are not too complicated, a certain amount of prior knowledge is required. Specifically, it is vital to ensure that your applications for your business license and visa are all completely free from mistakes.
This can be somewhat stressful, so as we have advised throughout this article, the fast-track to getting up and running is through working with a company formation specialist.
Here at Creative Zone, we offer you the best solutions to start your company in the UAE. You get fast, reliable and unbiased advice on your unique business setup requirements. We can help you choose the right kind of license for your business activity and take you through the entire process from start to finish.
You can let us deal with the hassle of registering a company while you focus on your business. And working with us means you get the best budget friendly and cost-effective solution to help make your business dream a reality.
Over 10 years, Creative Zone has helped more than 36,000 entrepreneurs set up their businesses. Whether it is a mainland business setup, offshore company setup, free zone company setup, or the issuing of trade licenses and any related activity for registering a company, Creative Zone is your one-stop-shop.
Our customer-first focus and our staff who speak 22 languages mean you get a tailored package to suit your specific needs. We have worked with clients from around the world, setting them up in over 200 different business activities.
Let Creative Zone make your journey into business ownership quick and hassle-free.