Company formation in UAE can include opening a branch or representative office, which the UAE Commercial Company Law allows foreign companies.
A branch office has the same legal identity as its parent company and conducts business under the name of its parent company. Whilst each Emirate has its own licensing rules for branch offices, this type of entity can carry out a variety of activities (as approved by the Department of Economic Development of the relevant Emirate).
A branch office is permitted to perform contracts or conduct other activities as specified on its license but may only engage in activities similar to those of its parent company and is not permitted to import the products of its parent company – a function reserved for local trade agents. In some cases, the branch of a foreign company must obtain an additional license from UAE Ministry of Economy.
A representative office is limited to promoting its parent company’s activities, i.e. gathering information, or soliciting orders and projects to be performed by the company’s head office. Representative offices are also limited in the number of employees that they may sponsor (usually three or four) and are not allowed to enter into business transactions or market products directly.
For both forms of company formation, a wholly owned UAE national company or a UAE national must be appointed as a “service agent.”A service agent is not permitted to own equity in or participate in the substantive management of the branch or representative office.The local agent typically provides specific services, such as assisting in communications with government departments or undertaking other administrative matters. The fees paid to the service agent are a contractual matter between the service agent and the foreign company.
Trinity can assist you in identifying a suitable local service agent and, if required, provide a corporate local service agency managed by Trinity to act as the local service agent of the branch or representative office.
For advice and further information on setting up a business in Dubai, specifically establishing a UAE branch or representative office in Dubai and all other Emirates of the UAE, please contact us through our ONLINE ENQUIRY FORM.
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