How to Setup a Foreign Company Branch/Subsidiary in UAE?

A Foreign Company can open a Branch / Subsidiary in UAE and coordinate the business operations with the Parent Company in the home country.

The Branch/Subsidiary of a foreign company in UAE must be registered with the respective Government authorities in UAE.

Branch Office Vs. Subsidiary

Branch Office is an extension of an existing business and is not a separate legal entity from the Parent Company. Also, the Branch Offices are eligible to conduct the same business activities as of their parent company in UAE.

On the other hand, a Subsidiary company is considered to be separate from the Parent Company as a legal entity. The subsidiary company is eligible to conduct any desired activities as per their trade license in the UAE.

How to Setup a Branch Office/Subsidiary in UAE?

The business operations of a subsidiary company must be carried from UAE and it has 100% liability for its actions, business activities, and management.

A Branch Office/Subsidiary can be formed in two of the business jurisdictions of UAE – The Free Zones, & Mainland.

The setting up process of a Branch office/Subsidiary is a simple and hassle-free process.

Our team will assist you in the company formation by preparing the right documentation, coordinating with the Government authorities for approvals, arranging for bank account opening, and more.

Document Attestation For Setting Up Branch / Subsidiary Office in UAE

The registration of Branch Office or Subsidiary Office requires attestation of the 4 main company documents from the UAE Embassy in the home country of the parent company as well as counter-attested from the Ministry of Foreign Affairs in UAE.

The attestation fees from the Ministry of Foreign Affairs per document is approximately AED 2000 (USD 545) per document in UAE.

The equivalent amount would be required for attesting the parent company documents from the UAE Embassy in the home country of the Parent Company.

Documents Required for Setting Up Branch Office in UAE

Documents that must be Attested by the Government Authorities in the Home Country and UAE

• Certificate of incorporation/ Memorandum of Association (MOA), Article of Association (AOA)
• Board Resolution stating the formation of a Branch Office/Subsidiary
• Parent Company Good Standing Certificate
• Power of Attorney in Favour of General Manager giving him the rights to open/operate/Management Bank Accounts on behalf of the Parent Company

Supporting Documents Required for Branch/Subsidiary in UAE

There are a few more mandatory documents required to set up a Branch Office in UAE which are:

• Trade Name Reservation Application Form
• Director/Investor/Manager Passport Copy
• Audited Accounts of the parent company for the last two years
• A statement listing out the company’s business objectives, plan, major operation activities
• Attested agreements with the Local Service Agent (LSA)
• Required Government Approvals (if any)

Benefits of Establishing a Branch/ Subsidiary in UAE

• 100% ownership to foreign investors
• Tax savings as there is no corporate/income tax in UAE
• UAE Resident Visa and corporate/personal bank account
• Confidentiality in business
• Very low import duty (5%) in the mainland of UAE
• Reduce the administrative burden of managing a large multi-national company
• Separate auditing, bookkeeping, and decentralize global offices for enhanced management
• Cost-effectively enter new market territories. There is no share capital requirement for a Branch Company in UAE. hence, investors can grow their business with a minimum upfront cost.

How to set up a Foreign Company Branch in UAE? – Steps Explained

1. Choose the Right Business Jurisdiction

The foreign company must choose the respective business jurisdiction – Where the Branch Office needs to be setup – Mainland, Free Zone, Offshore.

For setting up in the mainland in UAE, there is a mandatory requirement of appointing a Local Service Agent to liaise the administrative works with the Government Authorities.

2. Identify the Local Service Agent

The Local Service Agent is appointed for one year for a yearly fee. The contract is renewable every year with a provision to change the agent in case of any disagreement.

For Free Zones and Offshore, there is no requirement of appointing a Local Sponsor, and the Manager/Director will be the authorized person for conducting the business activities of the Branch Office.

An experienced Business Consultants such as AURION will assist you with the documentation approvals, visa processing, bank account opening assistance, and more.

3. Reserve a Trade Name

The Branch Office must have the same name as the Parent Company in the Home Country.

To get the name approved, the application has to be submitted to the Department of Economic Development (DED) in the case of Mainland Company.

The application must be submitted to the respective Free Zone/ Offshore authority if the investor is choosing these jurisdictions for the setup

4. Document Attestation from UAE Government Authorities

The company documents must be attested by the UAE embassy in the home country and also counter-attested by the Ministry of Foreign Affairs in the UAE.

The following documents are to be attested by the UAE Authorities in Home Country as well as counter-attested in UAE.

• Certificate of incorporation/ Memorandum of Association (MOA), Article of Association (AOA)
• Board Resolution stating the formation of a Branch Office/Subsidiary
• Parent Company Good Standing Certificate
• Power of Attorney in Favour of General Manager giving him the rights to open/operate/Management Bank Accounts on behalf of the Parent Company

5. Obtain License from Respective Government Authority

Submit the attested documents along with the supporting documents to the respective Government Authority for obtaining the Branch Office License.

There is a fee to be paid to the authorities along with the document submission. Post assessment of documents, the Branch Office License will be issued to the investor.

6. Fulfill Administrative Requirements

Now, the investor can apply for a UAE residence visa, open a corporate bank account, appoint Director/General Manager, recruit employees, process immigration cards, Labour contracts, expand office space, and conduct business in the UAE.

To know more about Opening a Branch Office/Subsidiary in UAE, talk to our expert Business Consultants right away!

Contact: Aurion Business Consultants