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July 10, 2013
The Commercial Companies Law covers the formation and regulation of Branches and Representative Offices of foreign companies in the UAE, and stipulates that they may be 100% foreign owned provided that a local service agent is appointed.
A Branch Office that is legally part of its parent company is permitted to perform contracts or conduct other activities which are specified in its license and are similar to those of its parent company. Each branch can have several sub – branches, with the same licensing and registration procedures.
On the other hand, a Representative Office is limited to promoting its parent company’s activities, i.e. gathering information and soliciting orders and projects to be performed by the company’s head office. In addition, Representative offices are also limited to the number of employees they may use.
Documents required to set up a Branch/ Representative office:
- Company registration certificate
- Company profile
- Board of Directors’ agreement to establish a branch
- Copy of Article of Association
- Power of Attorney to the representative
- Financial statement of the past two years
- Contractual agreement with local agent
- Details of the local representative
A license application must be submitted to the Ministry of Economy. If the application is approved it is sent to the Economic Department of the emirate in which business is to be undertaken. The time required to form a Branch/ Representative Office of a foreign company is approximately 4 weeks.