Contact us today for a free, no obligation consultation
As one of the company structures available to foreign investors looking to establish a presence in Dubai, the foreign branch office is often a popular choice.
Unlike a local branch office, which allows a foreign company with an established presence in one of the Emirates to set up in another of the Emirates, a foreign branch office is designed to allow foreign companies without a UAE presence to establish themselves here.
Opening a foreign branch office can often seem attractive to foreign investors, as it is regarded as an extension of its parent company, so does not require a local partner, like a limited liability company (LLC).
In this way a foreign branch office structure is similar to a representative office structure, in that it remains wholly owned by its parent company – but, the foreign branch office is often more appealing, as it allows for a greater range of activities.
There are no minimum capitalisation requirements for a foreign branch office, although the parent company must provide a bank guarantee from a local bank in a specified amount to show proof of its own capitalisation and good standing.
It is worth noting that a foreign branch office must have a specified business activity that has been approved in advance by relevant local authorities. This activity must be the same activity undertaken by the parent company establishing the branch.
As for trading activities, a foreign branch office is not permitted to deal in or trade in goods within the UAE, other than those goods manufactured by its parent or parent’s group. It is permitted to render maintenance and repair services to customers of its parent company.
The law also required that a foreign branch office must engage the services of a UAE national to act as its local service agent to handle all sponsorship and government paperwork. This can include obtaining its requisite license, and complying with visa and labour formalities.
On top of that, foreign branch offices are limited in the number of foreigners they can employ under their business license, and the parent company will generally be taxed on the profits of its branch.
Registering a foreign branch office and obtaining a license also means dealing with a significant amount of red tape, necessitating lengthier procedural requirements than the LLC.
As your local partner, Fusion Middle East is excellently placed to offer the support and guidance your foreign branch needs to thrive in its new home in the UAE.
Providing a trustworthy and transparent service, we leave the day-to-day running of the branch up to you, using our local skills and expertise to act as your local service agent in handling all government applications and paperwork.
To find out more about the extensive range of services we offer, contact us today on 00 971 4381 7333 to arrange your free, no-obligation consultation.