What does branch registration mean?
Branch registration allows foreign companies to operate within the UAE while maintaining complete control over international operations. The two most popular types of branch office are branches in mainland UAE and branches in Free Trade Zones. Each option has its benefits, depending on your industry and how you would like to operate your business. Mainland UAE and Free Trade Zones have separate business authorities, and where you open your branch will affect the regulations you need to follow.
There are several structures that are similar to registering a branch, including subsidiary and representative offices. Each of these options have their advantages, but branch offices are the most common because they allow more independence. A branch office can carry out commercial activities, but is subject to licencing regulations and must have the same name as its parent company.
What are the benefits?
The benefits of registering a branch in the UAE depend on the area in which you register; e.g. Dubai, a Free Trade Zone. However, there are several benefits that branch offices provide in any location:
- Ability to take part in profitable activity, including trading and entering into contracts
- Ability to conduct any and all activities that the parent company is permitted to do
- No currency restrictions
- 100% repatriation of profits and capital
- No personal income or corporate tax
- Profit share can be kept at 100%
- Less local and national involvement than other company forms, such as an LLC
- The branch office will be connected to a parent company in another country
- Access to the highly skilled UAE workforce
You may be unsure whether your company would benefit more from a branch office in a Free Trade Zone or mainland UAE. Contact Charterhouse Lombard to discuss branch registration and learn which structure would benefit your company most.
Who can register a branch?
Branch registration is available to foreign investors who wish to trade in the UAE while maintaining links to a parent company overseas. Registering a branch office requires compliance with the Department of Economic Development and the Ministry of Economy.
Charterhouse Lombard can organise and submit all of the documentation required to follow the relevant government regulations. We offer ongoing administrative management, including applications, licence procurement, translations, and notarisations.
How to register a branch in the UAE – A step by step guide
Registering a branch office in the UAE requires a level of know-how, as it can be complicated. Here’s how it works:
- Appoint a Corporate Service Provider, like us. We’ll handle the process for you, including appointing the right Local Service Provider as a sponsor.
- Register your trade name. Once we’re appointed, you’ll need to reserve your branch office’s trade name. This is carried out via the DED (Department of Economic Development).
- Gain initial approval. The next step is to apply for an initial approval from the MOE (Ministry of Economy). This requires quite a lot of documentation to be filed, which can get confusing (however, we’re here to assist throughout the process).
- Apply for a licence. Once you receive approval from the MOE, you’ll be able to apply for a licence (through the DED). This licence will need to be renewed each year.
- Establish a physical presence. You’ll then need to finalise arrangements for your physical office space, and open your business bank account too. Now is also the time to arrange visas and labour documentation for all your employees.
What documents will you need?
It’s important to note that your documents must be legalised and attested in your home country via the UAE Embassy / Consulate, then stamped at the Ministry of Foreign Affairs. After this, they need to be translated into Arabic, then stamped again, this time at the Ministry of Justice. If this all sounds complicated, don’t panic; we’re here to assist throughout.
You’ll need the following documents to register your branch:
- The completed application forms
- Proof that you’ve reserved the trade name
- The Memorandum and Articles of Association
- A copy of the director’s passport
- Copies of the LSA’s passport (and their naturalisation book)
- A power of attorney for the local director
- A copy of the Certificate of Incorporation
- A letter provided by the parent company, stating that they have no objection to the registration of the branch
If you’re applying for a commercial licence, you’ll also need:
- A document listing your business activities (provided by the parent company)
- MOE initial approval
- The parent company’s audited financial statements for the last 2 years
- A copy of the office lease agreement
- Copies of all the documents required to get initial approval
Branches can be registered for foreign companies in almost every industry, though there are some limitations in certain Free Trade Zones. Branch offices must have one of three types of licence, depending on the type of business they conduct.
- Trade licence- required for all trading activities within the UAE. You will need a trade licence if your business will be transporting or storing goods.
- Industrial license- required by any business that wishes to invest in natural resources or process raw materials. This licence covers manufacturing, packing, and distribution of finished products.
- Professional licence- required for service-based activities such as consulting, financial, medical, or educational services.
In addition to the above, Charterhouse Lombard can help you to open a UAE international business bank account.
Frequently asked questions
What does it cost?
Costs vary, depending on numerous factors. There are a variety of different fees to consider; for example, the LSA fee varies according to the LSA selected, and the capital deposit required by the MOE is AED 50,000. Get in touch with us today to find out more about the costs involved.
Can I set up a branch without an LSA?
No, having an LSA is a legal requirement.
Do I have to have physical premises for my business?
A branch office in the UAE needs to be a physical building – again, this is a legal requirement. You’ll need to provide proof that you have a physical office (by supplying a copy of the lease agreement).
Can I register the branch on my own?
Registering a branch office can be complex. As such, it’s recommended that you work alongside an expert, who will streamline and simplify the registration process considerably.
How can Charterhouse Lombard help?
Charterhouse Lombard offer comprehensive advice to foreign investors who wish to learn if registering a branch in the UAE is the right step for their business. Our years of working in the UAE have given us a thorough knowledge of the regulation requirements and local business structures.
Our procedural management services can organise all the relevant documentation and application processes for your branch, growing your company swiftly and without obstacles. Our experience covers branch registration across the UAE, including in Dubai and the Free Trade Zones. Our business consultants can advise you on the best procedure for your company, ensuring you reap all the advantages the UAE market has to offer.
If you would like to learn more about how Charterhouse Lombard can help you register a branch, you can schedule a call with us to discuss the future of your business.
