How to start a branch office in Dubai?

A branch office is basically a legal extension of its parent company. It is 100% owned by the parent company, operates under the same name, organizational structure and conducts the same business activities. It is important to note that in order to commence business as a branch office, it is required to adhere to certain statutory guidelines. There are a few simple steps to register a branch of a company in the Dubai mainland or free zone:

Secure Business Premise and Consultant

Companies prefer to locate in the mainland or free zone area like Meydan which offers benefits like 100% exclusion from taxes and full foreign ownership. Apart from helping out with branch registration, employment visas, setup costs, and license applications and relevant authorities, the consultants at Meydan Free Zone could support you with everything your branch office requires.

File An Application

Meydan Free Zone simplifies the whole application process for companies wishing to open a branch within its premises. All they need to do is register on its award-winning portal which allows end-to-end application, permission and transactions. They have a 100% paperless environment that has been recognized by Global Business Outlook (GBO) as the ‘Best 100% Digital Free Zone’ in the UAE.

Get Your Trade License

At this stage, you can compile all the necessary documents of the parent company attested and submit them to DED. Depending on the parent company’s business activity, obtaining DED approval would be easily determined. Meydan Free Zone would resolve and verify all your paperwork and documentation, in order to make sure receiving your trade license is first priority. Once you receive it, you can freely commence business operations in your branch office.

Open A Bank Account

Submit all necessary documents and receive bank consultation to open up your bank account and go ahead with any necessary transactions.

Register With Commercial Authorities

The final step guarantees verifying your branch office’s position in the market. Authorities like the Dubai Chamber of Commerce and Industry, require registration and here onwards, you can start your business activity.

For the initial setup of a branch office, the following documents are required;

• Copy of parent company’s Trade License

• Certificate of Incorporation

• Audited statements of the past year/years (if not a start-up)

• Notarized Memorandum of Association of parent company

• Notarized Board Resolution of parent company

• Certificate of Incumbency

• Passport copies of manager/owner/director

• Proof of a tenancy contract

• Power of Attorney

• Share certificate

Types of Branches You Can Operate In UAE

The UAE has two main economic jurisdictions to set up your business in—either a branch office in the mainland or a free zone. The difference between the two is quite straightforward. For instance, a business that chooses to operate in a free zone, may be subjected to the licensing and registration requirements posed by the free zone authority, whilst mainland setup is governed by the UAE’s requirements.

If you decide to set up your branch office in the free zone, there is a zero capital requirement, allowing lower expenditure for setup costs in addition to reducing financial risks in the future. When operating in a free zone, the branch office in Dubai can access the local market due to the given permission of trade.

Meydan Free Zone offers easy bank setups and compliance with regulatory requirements. For instance, Meydan Pay provides instant banking solutions that make payment processing easier along with free zone benefits. It is possible to access a wide range of customers through both mainland and free zones, although with the nurturing business environment of a free zone, trading with the local customers would be more opportune.

Benefits of Opening A Branch Office in Dubai

Foreign companies can successfully set up their businesses by embracing Dubai’s tax-free and low-cost environment. Here are some of the benefits from opening up a branch office in Dubai.

1. Low-cost entry to the market

Considering the minimum capital requirement, tax flexibility and scalable infrastructure, branch offices can operate with lower costs more efficiently. Setups only consist of standard fee, application fee, and deposits. With Meydan Free Zone, you can calculate your setup costs with ease and scale your trade license amongst many factors, such as visa requirements among others.

2. Favourable business environment

The thriving emirate of Dubai boasts a 0% corporate tax on profits earned by branch offices of foreign companies, meaning all your profits are retained without any deductions, allowing the parent company to largely benefit from this. Along with the luxurious hotels and amenities available all around, your business will definitely be considered all the more attractive.

3. Cost-effective

Rather than setting up a new company as a whole, opening up branch offices could incur lower costs than expected. For example, the costs allocated to auditing will be reduced as the branch office can handle and track their transactions, which would also be legally liberating. In addition to this, opening up another branch is significantly less costly than going to lengths of launching a new company.

4. Strategic location

As discussed earlier, the branch office can be established in either mainland or a freezone, and per the requirements of the shareholders and company memorandum, the business can be set up just about anywhere. Dubai mainland is prone to offering lower rent costs, and with many other businesses operating around you, competition and lower operational costs will act as cost-efficiency drivers. On the other hand, free zone areas deliver a plethora of benefits that include its diversified transport links for better supply chain, technology-infused infrastructure and processes which will gradually lead to a lower set-up cost.

At Meydan Free Zone, the bustle of the city centre and close proximity to the airport, definitely allow easier access to transport systems and ease for employees to travel to offices for work. Not to mention, the speedy access to regional markets and different countries opens up a lot of room for growth potential.

Cost To Open Up a Branch Office in Dubai

Calculating the specific set up cost for a branch office varies depending on the type of business you run, business activity of the parent company, as well as the number of employees. In comparison to a local business, a branch office incurs more set up costs because of the bulkier registration process. At Meydan Free Zone, a new business with no visas required starts at AED 12,500 minimum, while companies that need up to six visas amount to a fee of AED 23,600.

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At Meydan Free Zone, we can advise you on the best option for your company to #GrowFromDubai.

Get in touch today!