Branch Office in Dubai
A branch office in Dubai is an extension of a foreign parent company that is located outside of the UAE. It is a full-fledged business which can enter into contracts or perform business activities as specified in its license. Not having a separate entity, a branch office distinctly represents its parent company and conducts business under its name.
The purpose to setup a branch office in Dubai is to promote and market the products of parent company, undergo business transactions, forge its agreements with other businesses under the name of parent company and provide services to its customers. A branch office in Dubai is ideal for tightly regulated industries such as Banking, Financial Services and Insurance.
Difference between Branch and Representative Office in Dubai
Often confused with branch offices, there is a key difference that sets them apart i.e. business activity. A branch office in Dubai can freely exercise the activities for which the license is granted and earn profits, a representative office in Dubai however cannot – it must outsource all its work back to the parent company. The role of representative office is limited to promotion of products and services of parent company and is not allowed to conduct business in Dubai.
Features of Branch/Representative Office in Dubai
- Ownership – it allows 100% foreign ownership
- Activities – Branch office shall only be engaged in activities similar to those of its parent company; it cannot perform any activity which its parent company is not allowed. Some activities are restricted (e.g. Trading, you would be required to set up as an LLC).
- Local Sponsor/ Local service Agent – Each foreign office branch in Dubai requires a local service agent.
- Local Service agent has no equity, participation or liability towards the business.
- LSA cannot participate in the matters related to company’s management or activities
- His role is confined in providing services such as obtaining of entry/residence permits for company, assistance in acquiring company’s licenses or facilitating the processing of its transactions with the government authorities
- LSA is remunerated in agreed lump sum for his services rendered to foreign company
- Liability and tax – Branch office is not a separate legal entity hence its foreign parent company is 100% liable for the actions of the branch. Also the revenue of the branch will be taxable (in the country where the relevant foreign parent is resident) as the income of the foreign parent.
- Manager – Only the manager appointed by the BOD of the parent company will be authorized to represent the company in all matters in Dubai.
- Permissions – In certain cases, branch offices are required to seek permission from the Ministry of Economy in order to perform certain functions.
Services Offered by KWS Middle East
- Helping your business find a reliable and suitable Emirati service agent
- Handle all the necessary documentation to establish your business in a timely manner. This includes applying for visas, licenses, obtaining labor quotas, translation services and assistance in the opening corporate bank accounts.
- Assistance in finding suitable office premises
- Through KWS Middle East office, you can get all kind of business support services
- We will offer networking opportunities with key local contacts and government departments.
Our UAE presence allows our clients to start branch/ representative office in Dubai or any other emirate quickly. Check our company formation services for business setup in Dubai or if you are planning to open a branch office in Dubai. We are amongst the most experienced and qualified business setup consultants with high success quotient and affordable fees.