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STEPS FOR SETTING UP SUBSIDIARY OFFICE IN THE UAE

A foreign company can establish a branch or subsidiary in the UAE and coordinate its operations with its parent company in its home country.

A foreign company’s branch or subsidiary in the UAE must be registered with the appropriate government authorities.

Branch Office Vs. Subsidiary

A branch office is a division of an existing company, not a separate legal entity from the parent company. Furthermore, Branch Offices are permitted to engage in the same business operations as their parent company in the United Arab Emirates.

A subsidiary company, on the other hand, is considered a legal entity independent from the parent firm. As long as the subsidiary firm has a valid trade license in the UAE, it can engage in whatever activity it wants.

How to Setup a Branch Office/Subsidiary in UAE?

A subsidiary’s business operations must be managed from the UAE, and it bears full responsibility for its actions, business activities, and management.

In the United Arab Emirates, a Branch Office/Subsidiary can be established in two business jurisdictions: the Free Zones and the Mainland.

Steps to Open a Branch or Subsidiary in the United Arab Emirates

The procedure of establishing a branch office/subsidiary is straightforward and painless.

Our crew will help you start a company by compiling the necessary paperwork, liaising with government agencies for permissions, setting up a bank account, and more. 

Document Attestation For Setting Up Branch/ Subsidiary Office in UAE

The attestation of the four major company documents from the UAE Embassy in the parent company’s home country, as well as counter-attestation from the UAE Ministry of Foreign Affairs, is required for the registration of a Branch Office/Subsidiary.

In the United Arab Emirates, attestation fees from the Ministry of Foreign Affairs are around AED 2000 (USD 545) per document.

A similar sum would be necessary for the UAE Embassy in the Parent Company’s home country to certify the parent company’s paperwork.

Documents Required for Setting Up Branch Office in UAE

Documents that must be attested by government officials in both the home country and the United Arab Emirates:

  • 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 documents to be submitted for opening a branch office in the United Arab Emirates, including:

  • 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 appropriate business jurisdiction – Mainland, Free Zone, or Offshore – where the Branch Office will be established.

There is a legal necessity for selecting a Local Service Agent to liaise the administrative works with the Government Authorities when establishing a business on the mainland in the UAE.

2. Identify the Local Service Agent

For an annual fee, the Local Service Agent is assigned for one year. The contract is renewable each year, with the option to switch agents if there is a disagreement.

There is no necessity to nominate a Local Sponsor in Free Zones or Offshore, and the Manager/Director will be the authorized person to handle the Branch Office’s commercial activities.

AURION, an experienced Business Consultant, will help you with documents approvals, visa processing, bank account opening support, and other services.

3. Reserve a Trade Name

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

In the case of Mainland Company, an application must be presented to the Department of Economic Development (DED) to have the name approved. If the investor chooses these jurisdictions for the establishment, an application must be submitted to the corresponding Free Zone/Offshore authorities.

4. Document Attestation from UAE Government Authorities

The UAE embassy in the home country must certify the firm paperwork, which must also be counter-attested by the UAE Ministry of Foreign Affairs.

The following documents must be certified in their home country by UAE authorities and then counter-attested in the 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

To obtain a Branch Office License, submit the certified documents along with the supporting documents to the appropriate government authority.

Along with the submission of the documents, there is a charge that must be paid to the authorities. The Branch Office License will be provided to the investor when the documents have been assessed.

6. Fulfill Administrative Requirements

The investor can now apply for a UAE residence visa, open a corporate bank account, appoint a Director/General Manager, hire workers, process immigration cards and labor contracts, increase office space, and conduct business in the UAE.

Talk to our specialists right immediately if you want to learn more about opening a branch office or subsidiary in the UAE.

Contact us for assistance.

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