Last updated on April 30, 2022
A foreign company is allow for opening a branch company in Dubai; however, the branch office in Dubai is restrict in the events they may conduct inside the U.A.E. (Article 314 of the Commercial Companies Law). Local agents are not involve in the working side of the company, but only help in getting visas; labor cards etc., and is paid a lump sum and/or a percentage of the income or turnover.
Dubai is the best important business and trading center in the Middle East. The region offers great authority to companies and starting a business there can be very helpful for overseas traders. When selecting to conduct economic activities in Dubai, investors must also choose the suitable business method. Two of the most common legal elements for foreigners are the branch and the subsidiary. Each of them has its own importance; and the differences between a company branch and a subsidiary in Dubai; can be related to the business plans of the company. Our agents can help you understand these differences; and see which business method can be beneficial for your branch of a foreign company in Dubai.
Branch of a foreign company in Dubai
Dubai has a number of important free zones; and lots of overseas companies open their branch in this region; because it offers a great deal of profit for foreign investors. A branch of a foreign company in Dubai needs to be register with the Ministry of Economy; and also there are some restricted activities which a branch are not allow to perform; that is commercial agencies or restaurants. Also, the nature of this business allow it to perform only activities identical to the mother company abroad. A branch of a foreign company in Dubai is not a separate legal structure; but it is bound to the parent company. The parent company based abroad is responsible for the branch debts as well as commitments; and will assign a representative in Dubai to take care of the branch’s activities.
Opening a branch company in Dubai
If you decides to opening a branch company in Dubai; you can easily perform the activity in the trade license. However, licensing is run by legal rules as well as regulations. There are some activities, which are only allow to a UAE national; such as banks, finance, insurance and commercial agencies. There are also other licensing processes and conditions that are governing the work of the DED; which issues from time to time various regulations and managerial orders. A foreign company, that opening a branch company in Dubai; may start advertising campaigns for its products and services. The office can also facilitate contracts among the company and its local customers. However, the company is not allow to conduct business procedure; such as gaining credit facilities, making offers, etc.
Type of branch of a foreign company Dubai
There are two leading types of branch of foreign company Dubai representative office and a branch office in Dubai. A representative office is not allow to collect information and solicit orders; and tasks to be done by the company head office. In this concern, representative offices are also narrowed in the number of employees they may promote (typically three or four). A representative office works as an administrative and promoting center for the overseas company. A branch office is a complete business, allow to achieve contracts or perform other activities as mention in its license.
Opening a branch company in Dubai can earn profit and do its activity. The main purpose of the branch is to perform the same activity as allow to its parent company.
A representative office in Dubai is not allow to earn income within the UAE; and the activities it may carry out in the UAE is only marketing; and promote its parent company products and services.
Branch office in Dubai and representative office in Dubai share a lot of similarity; as both work in the power of a commercial registration; and license in the name of the parent company; and both are requires to hire a local services agent, who must be a UAE citizen. The set up process for both are also the same.
Difference between branch and representative office UAE
branch office in Dubai can be open by a parent company in additional city; state, or country and still remain part of that parent company. This fresh entity is still totally under the parent company; and must run under the same name and with the same business activity.
On the other hand, for opening representative office in Dubai each office can have an additional activity; that is for the purpose of marketing. But in this case, it is not allow for that office to trade the mentioned products and services.
Opening a branch company in Dubai is a well known move of a foreign investors. It just means that they have a licensed business in another country that is developing, realization other nations’ attention. The process of opening a branch in Dubai are nearly the same as like other business.
There are organize procedure for setting up a branch of a foreign company in Dubai. This is why looking for the help of an expert advise to guide you over. A consultant can offer you with the information you want; and also he will answer your query that how to set up a representative office in Dubai. They are the folks who can clarify to you in detail the things you need to know; such as UAE foreign investment law, and even other things that you are curious to find out.
Difference between branch and subsidiary in UAE
Various foreign companies desire to have an existence in Dubai; so they open branch office in Dubai or subsidiaries. The key difference between branch and subsidiary in UAE resides in the freedom the subsidiary has. Whereas the branch office is tied to the parent company; and a subsidiary will be capable to conduct its own jobs in Dubai.
Benefits of branch of a foreign company in Dubai
Opening a branch of a foreign company in Dubai has benefits that arise with them. Business man who come here to UAE have their company back in their country; and would like to be in easy range to their customers. It is an advantage in itself to not use more money; and open a branch here that confirms further actual communication with the customers. This is why a lot of international businesses in Dubai are teeming the country. It’s because doing this take a long rewards to their enterprise.
By electing to opening a branch company in Dubai; it can escalate your existence not only in your country but also globally. Your worth will be very much view as you form a better relation with your customers; and also with a new one who have a high ability of becoming one of your clients. The fact that the request of your products and services is being met; that says a lot of good things with respect to your company’s existence in the industry ranking; and also your company practical move which guarantee that the clients are happy. Meeting your clients in the midway is at all times a good move.