Foreign companies are allowed to conduct business operations in the UAE by opening a branch or representative office in accordance with article 313 of the Companies Law. However, there are significant differences between branches and representative offices. Foreign companies that opens a branch in the UAE may freely operate and conduct the business activities for which they are licensed for.
On the other hand , a representative office may only practice promotional activities for products and services provided by the original parent company. Unlike a foreign branch, a representative office cannot conduct business operations . In order to be permitted to open a foreign branch in which business operations can be conducted, the parent company should obtain a license from the Ministry of Economy prior to obtaining the license from the Department of Economic Development (DED).
However recently, it has been allowed for foreign professional and service companies to open their branch in Dubai without a Ministry of Economy Registration whereas foreign companies registering their presence as a representative office must register with the Ministry of Economy. The main condition for opening a representative office or a branch of a foreign company in the UAE is to appoint an agent that should be a UAE National. A foreign company is required to submit the following documents to the concerned authority’s and obtain necessary approvals for registering the branch in Dubai . A list of the required documents can be found below:
- Memorandum of Association
- Certificate of Incorporation
- Good legal standing certificate- showing the parent company is legally existing in the country of registration
- Board Resolution requesting the opening of the branch and appointing the manager
- Power of Attorney to the Manager .
Additional documentation may be asked by relevant authorities depending on the activities and market the business plans to operate in.
Conditions and Requirements
Below are conditions and requirements as per the government website of the UAE regarding the opening of a foreign branch in the UAE:
- Ensure that the company has no branches registered with the Ministry of Economy, so that the company’s branches in the UAE are registered under a single number.
- The company must access the MoE’s website and register itself within one month from the date of issuing the license by the concerned authority, and submit all the required documents to MoE.
Steps and Procedures of Registering a Branch of a Foreign Company
- Access the eSystem of foreign establishment branches and offices at (http://services.economy.ae//MOEinteranet)
- Enter the required information , attach the requested documents and validate their accuracy.
- The request is accepted upon ensuring payment of the required fees- or rejected – while sending a message to the establishment via the eSystem clarifying the reasons for this
- A registration certificate is issued and is valid for one year, this has to be renewed annually
Steps and Procedures of Licensing a Branch of a Foreign Company
- Access the eSystem of foreign establishment branches and offices
- Enter the information, attach the required documents and validate accuracy
- The request is accepted upon ensuring payment of the required fees- or rejected- while sending a message to the establishment via the eSystem clarifying the reasons for this
- Initial approval is issued to be submitted to the concerned authority, as per the MoE’s prescribed form, provided that it is valid for 4 months . If expired and the establishment does not obtain the license from the concerned authority , a new license fee must be collected.
Documents required for the Licensing of a Branch of a Foreign Company
- True copy of the trade name reservation certificate/initial approval certificate of the competent authority indicating the activity of the branch.
- Official certificate from the concerned entity of the country in which the company is established; indicating the date of incorporation, name, legal form, name of proprietors, activity practiced and capital.
- Decision by the establishment’s administrative board to open the branch or office and engage in the activity; and the authorization issued to the establishment’s representative submitting the request.
- True copy of the agency contract concluded between the establishment and the national agent.
- True copy of the agent’s ID – if he is a natural person or the owner of an individual institution. If the agent is a legal person, the following must be attached: copy of the establishment’s commercial license, name and nationality of partners as issued by the concerned authority at the emirate in which the establishment is registered.
Steps and Procedures For Modification of the Registration of a Foreign Company Branch
- Access the eSystem of foreign establishment branches and offices
- Enter the information, attach the required documents and validate accuracy
- The request is accepted upon ensuring payment of the required fees- or rejected- while sending a message to the establishment via the eSystem clarifying the reasons for this
- Re-print the registration/renewal certificate if it is needed
- If the modification involves the name of the establishment, then an announcement must be published in a local paper issued in Arabic for one time only.
- The request is accepted in the registry following one week from the date of publication
- If the bank guarantee is changed, this shall be done pursuant to a letter direct to the issuing bank, to be delivered to the establishment’s representative, along with the original bank guarantee.
Documents Required for Modification of the Registration of a Foreign Company Branch
Below is the documents required for Modification of the Registration of a Foreign Company Branch:
Name of Establishment:
- Trade name reservation certificate from the concerned authority
- Official certificate from the concerned authority of the country in which the establishment was incorporated
- Appendix of the amendment to the agency contract
- Approval of the Central Bank of the UAE for banks and financial institutions
- Approval of the Insurance Authority for insurance companies and related professions
- Statement by the bank issuing the bank guarantee amending the name of the establishment or issuing a new bank guarantee
Legal Form:
- Certificate or transcript from the concerned authority of the country in which the establishment was incorporated
- Approval of the Central Bank of the UAE for banks and financial institutions
- Approval of the Insurance Authority for insurance companies and related professions
- Establishment’s address in the country of origin:
- Certificate or transcript from the concerned authority of the country in which the establishment was incorporated
Address of the establishment’s branch in the UAE:
- Lease contract (the establishment shall be exempted from submitting the amendment request if the name of property owner is changed)
Bank Guarantee:
- New bank guarantee from a bank operating in the UAE
Activities of the branch (addition, deletion, change):
- Approval of the concerned authority in the emirate
- Approval of the Central Bank of the UAE for banks and financial institutions
- Approval of the Insurance Authority for insurance companies and related professions
Capital:
- Certificate or transcript from the concerned authority of the country in which the establishment was incorporated
National Agent:
- True copy of the agency contract concluded between the establishment and the agent
- True copy of the agent’s ID – if he is a natural person or the owner of an individual institution. If the agent is a legal person, the following must be attached: copy of the establishment’s commercial license, name and nationality of partners as issued by the concerned authority at the emirate in which the establishment is registered.
- Agreement termination/letter of termination from the previous agent
Names of establishment owners:
- Commercial registration, articles of incorporation or company statute, as the case may be
Establishment Branch Manager or Regional Manager:
- Authorisation issued from the mother company to the new Manager
- True copy of passport
- Approval of the Central Bank of the UAE for banks and financial institutions
- Approval of the Insurance Authority for insurance companies and related professions
After going through all these procedures, businesses are free to open up a branch in the UAE and conduct business operations in the country . In order to ensure that this process goes smoothly, you need the assistance from experienced legal consultants to make sure that these branches are set up properly from a legal standpoint with little to no problems.
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