Start a Representative Office in Dubai

Dubai is a popular trade hub of the world. There is enormous business opportunity in the city of Dubai. Large Multinational Companies have their head office in Dubai. At the same time, there are numerous small and medium companies in the region showcasing positive growth rates. 

Starting a representative office in Dubai is a lucrative business opportunity for foreign investors who have a strong business background in their home country. Representative Office can be seen as a strategic way to expand the business to new geographies easily without incurring much expense. 

This article highlights the characteristics of a Representative Office in Dubai and how to open one for your foreign company. The article also touches base on the scope of a Representative office in Dubai.

What is a Branch Office and Representative Office in UAE?

So, let’s delve into the understanding of what a representative office is in the UAE. A representative office is an extension of the parent company entity into a new market. It is part of the same entity and not considered as an independent entity. 

A Representative Office cannot sell or indulge in any profit-generating activities. It can be only an office with staff that will outsource all the sales to the head office or the parent company. The representative office will be for liaising and building client relations only. 

So, technically a branch office and a representative office are two different types of company structure. In the section below we will look at the major differences between the two business entities. 

Differences between a Branch Office and a Representative Office in UAE

The major difference between a Branch Office and a Representative Office in UAE is the functioning. The modus operandi of both entities are distinct. A Branch Office is treated as a separate independent entity and a profit centre. They can conduct business, hire employees manage the book of accounts, operate independently and handle additional responsibilities. 

Whereas, a representative office is an extension of the parent company. It is not a profit centre but an expense. There is no revenue generation in a representative office.

They outsource the work to the parent company. The Representative office is for customer service and liaising and no actual sale is happening via a representative office. 

Why Set up a Representative Office in UAE/ Dubai?

The Representative Office in UAE/Dubai will help the foreign investor easily expand their business to new geographies. It is a gateway to new business opportunities. The parent company that is based in a foreign country can easily enter into the UAE’s market landscape with minimal investment.

They can test the market, conduct market research, perform marketing activities, gain contacts, and more.

Most of the investors based in Dubai, UAE prefer to associate with a brand or company that has a local presence in the region. So, the Representative Office can act as a liaison office where the investors can visit and learn more about the processes and functioning of the parent company.

In a representative office, there are marketing staff and a Director who represents the company. All queries regarding the company’s operations would be addressed by the representative office. So, opening a representative office in Dubai has many business advantages for the business owner.

What are the Advantages of a Representative Office?

Following are the advantages of opening a Representative Office in Dubai. The strategic location of Dubai makes it a business centre. The convenient time zone for doing business with the West and Asia makes Dubai a top choice for establishing a company. 

Similarly, The stable economy, growing business opportunities, and 100% foreign company ownership in the Mainland and Free Zone attract many foreign business investors to the UAE. Furthermore, the tax exemptions and simplified business setup processes are other major reasons many investors choose Dubai to incorporate their company.

Additionally, the business-friendly government and state-of-the-art infrastructure, Airport and Seaport, etc., make UAE a perfect trade and logistics hub. So, establishing a presence in Dubai, UAE is highly beneficial for the companies.

By being in UAE, the company can expand their trade operations to international markets easily. Also, there is an availability of a diverse workforce in the region. Furthermore, the high standard of living and lifestyle attracts a lot of international talent to the city of Dubai.

Similarly, there is a vibrant business community ideal for networking, partnerships, and collaborations. Also, there are year-round trade fairs and exhibitions for business promotion in the region.

Steps to Set up a Representative Office in Dubai

There are various steps to follow for setting up a representative office in Dubai. To start the operations in Dubai, the business owner must legally get a trade license from the Dubai Economy or the respective Free Zone.

As the first step, they must attest the parent company documents from the UAE Embassy in the home country. Then, counter-attest the documents from the Ministry of Foreign Affairs in UAE.

Now choose the same trade name as the parent company for the representative office. Add the list of legal business activities they can continue to operate as a representative office.

Then, Submit the parent company documents, and attested board resolution stating the appointment of a Company Director with full power to operate and manage the representative office in UAE.

Also, make the fee payment for the trade license of the representative office in UAE to the licensing authority.  Once the trade license is obtained, start operating the representative office in full swing by adhering to the legal scope. 

Cost of Representative Office setup in Dubai

The Cost of a representative office setup in Dubai on the mainland is approx. around AED 30,000 for a virtual office and 1-year trade license. When more visas and physical office space are required, then, the cost adds up. 

Similarly, in the Free Zone, the representative office can be set up with a virtual office and 1-year trade license at approx. AED 14,900. Again, as we add office space and more visa quotas, the cost will go up accordingly.

Aurion will guide the investors throughout the process of establishing a representative office in the UAE. The team is here to clarify all your queries regarding the set-up of the company. Connect with our expert team to learn more about the things to consider before setting up a Representative Office in UAE.