Dubai being a trading port facilitates a lot of trading businesses in the UAE. Dubai has safe investment techniques which makes it easier for foreigners to invest and start their businesses here. There is a wide range of services that can be provided by a trading company in UAE. These may include medical supplies, food supplies, gas products and much more. In Dubai, the trading business can get a huge success because of its strategic location. Dubai, being a hub of various free zones, allows more and more establishment of the trading businesses that leads to more exposure for the people. Trading Business set up in Dubai is encouraged because it helps the businesses in serving the nation without any restrictions.
Opening a Branch Office in Dubai
A lot of businesses these days are going towards branch formation in order to promote their businesses worldwide. A branch office is basically an offshoot of a parent company located abroad. Its basic purpose is the promotion of the parent company and its products and services. For a branch office, any activity outside the range of the parent company is not allowed. Only those activities can be considered, by the branch company, which are already being offered and provided by the parent company. Nothing extra is allowed to be offered by the branch company. For the branch formation of the parent company, there are different rules and regulations that are to be followed by the companies. Anything that deviates from the legal boundary would be considered illegal.
Is there any difference between a parent company and a branch company
An entity other than the parent company is referred to as the branch company. A branch company doesn’t have any legal standing separately. It is present at a different location from the parent company and it can also carry out the activities of a parent company.
The procedure of Setting Up a Branch Office in Dubai
Follow the following steps for the formation of a branch office in Dubai;
- Find a local sponsor or an agent
- Reserve any trade name at the Department of Economic Development (DED) for the branch office and apply for initial approvals from the Ministry of Economy (MOE)
- Apply for a commercial license at DED after getting the initial approval
- Find good office space for branch formation
- Open a bank account and arrange visas and labor cards of your employees
- Become a member of the Dubai Chamber of Commerce and Industry after registration.
Documents needed for a Branch Office
For the formation of a branch company in Dubai, there are different documents needed. These documents are required for different approvals and registration processes. All of these documents should be authentic and they should be submitted as required. This is because delay or carelessness in submitting the right documents at the right time may affect the registration process which may affect the overall formation of the branch company.
For the initial approval from the Ministry of Economy (MOE), the following documents would be required:
- Trade name reservation Proof
- Application forms for registration
- Memorandum of Association and Articles of Association (MAA) of the parent company
- Parent’s company Certificate copy of Incorporation
- copy of the passport of the director
- A no-objection letter allotted by the parent company
- Passport Copies of the local service agent
- Naturalization book of the local service agent
- local director’s power of attorney
- Resolution of the parent company for branch formation in Dubai
After submitting the documents for the initial approval, you further need to submit the documents for obtaining a commercial license from the DED;
- MOE’s initial approval
- A statement having the business activities that can be carried out, issued by the parent company
- financial statements of the parent company for the last 2 years (audited)
- Property lease agreement’s copy of the branch office in Dubai
- Copies of all of the documents submitted for the initial approval
Cost of setting up a branch office
Different ministries have different fee structures. People need to submit the fees with the documents and the forms because without submitting the fees, the application would not be proceeded with.
The fee structure for setting up a branch office in Dubai are as follows;
| Cost of Applying for initial approvals at the Ministry of Economy | AED 5,000 |
| Cost of Registering branch office with the Ministry of Economy | AED 10,000 |
| Cost of Capital deposit with the Ministry of Economy | AED 50,000 |
| Cost of Registering & licensing with the local government | AED 10,000(approx.) |
| Local service agent | AED 15,000(approx.) |
If you want to start your trading business in Dubai, business setup consultants at FAR Consulting Middle East. will be at your help instantly. They provide exposure to the people with a new world of business and help them follow all the steps in a professional manner. FAR aims to provide the best quality services to the people for registering their business and helping them with supporting activities in very less time.
If you find any difficulty during your business formation or branch formation process, contact FAR Consulting Middle East. or visit their office for more guidelines and directions. They will give you the best pieces of legal advice in the UAE and will efficiently set your business.
