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Dubai is the Middle East's most major business and commerce center. The emirate provides significant tax benefits to businesses, and overseas traders may find it attractive to establish a firm there. Investors must choose the suitable business form when conducting economic activity in Dubai. Dubai has grown to be one of the most well-known and developed locations on the planet. Dubai is a terrific destination to do business because of its superb facilities, infrastructure, and work-friendly climate. Millions of business minds from around the world have been drawn to the open economic system to take their companies to the next level.

When it comes to beginning a business, the Middle East's local market provides a lot of promise and possibility for success. Many foreign firms have genuine paying clients in Dubai, and they use their parent company to commence business before deciding to grow their influence in the UAE market by building a branch, according to our experience. Having a branch in the same location as your new and existing clients will offer value to your products/services, help your company earn market trust, and make your operations faster and more efficient.

It serves as a hub for both import and export operations, making it a worthwhile investment of time and money. The advantageous time zone combines Eastern and Western business hours, giving customers access to 2.2 billion people.

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Branch of Dubai Based Company Formation in Dubai, UAE

The government has established tax-free policies and other business advantages, making it an excellent location to start a company. The Dubai’s strategic position is another crucial reason why businesses see it as a key to success. It's a fantastic route connecting the major Eastern and Western countries. Thus, we at Dhanguard pioneer at providing you with exemplary services and guidance to help you setting up your Branch. Do exempt few minutes to read the below mentioned information which has been carefully devised by our Experts to provide you up to the mark services.

What is a Branch office?

Many entrepreneurs and investors fail to comprehend the difference between a Branch and a Subsidiary after deciding on Dubai as their next company destination. Each of these legal entities has a distinct role to play in their different missions. A branch company is one that is not located in the same city as the company's headquarters.

As a result, the branch is not a distinct legal entity. It is a subsidiary of a parent firm that conducts business under the same name. It is wholly managed by the main corporation. A branch company typically has a branch manager who reports to and accepts orders from a member of the parent company's management team. A subsidiary, on the other hand, is an independent corporation despite being owned by a parent company. As a result, a subsidiary can perform distinct tasks or operate under a different name than its parent company.

Dubai has a number of key free zones, and many foreign corporations establish branches there, which provide benefits to foreign investors. A branch in Dubai must register with the Ministry of Economy and is prohibited from engaging in certain restricted activities, such as commercial agencies or restaurants

Furthermore, the structure of this business form allows it to carry out only activities that are similar to those carried out by the parent firm in another country. The parent business is responsible for the debts and responsibilities of the branch and must appoint a representative in Dubai to manage the branch's affairs.

Mainland Company

Mainland Company is an inland company that can conduct business in the local market in the United Arab Emirates as well as outside the UAE. In the case of commercial and professional licenses, mainland enterprises have complete flexibility to operate.

A local sponsor or a UAE national is required for the formation of a mainland business in Dubai, and the standard shareholding arrangement for a Dubai mainland company is that the UAE national Sponsor owns 51 percent of the company and the foreign shareholder (s) owns 49 percent.

The mainland company offers international investors a flexible legal arrangement in which the local sponsor is paid a yearly fee or a percentage of sales/profits.

Benefits of a Mainland Company

The following are the benefits of a Mainland Company:

Being able to trade internationally and expand your reach

Registration on Dubai's mainland gives your business the capacity to deal globally, which is crucial for many businesses in today's increasingly connected world. It's also a good idea to think about the future of your organization. Do you plan to expand your business internationally? Do you want to be able to freely enter important international markets? In today's fast-changing environment, businesses who can adapt are valued. Assume you have a product or service that has gained traction in a certain country.

You must plan the logistics to rapidly enter in such a situation. Having a mainland Dubai license essentially means having the freedom and flexibility to expand and operate your business.

Having the ability to grow your product portfolio is a big plus

As the country approaches and beyond 2022, Dubai's smart city infrastructure is already moving businesses in new directions, and the capacity to diversify will become increasingly significant. Choosing a mainland Dubai site allows your company to expand significantly. When compared to your free zone competitors, obtaining a Dubai mainland license entails a smoother, speedier, and less restrictive administrative process.

Possibility of launching a flexible business

While starting a company on the mainland of Dubai may appear complicated, working with the right company formation specialists can give you with a package that is both swift and comprehensive. When determining who to collaborate with, see if the bundle includes the following significant benefits:

  • Business formation and registration
  • Dubai's national sponsorship included automated legal administration
  • A dedicated service agency can expedite and reduce the cost of visa and immigration processing for your company.

In the end, it is easier to establish a mainland firm in Dubai. As a result, you should review your three-year business strategy to see if Dubai mainland registration is the best option for you.

Ability to collaborate with the UAE and Gulf Cooperation Council states (GCC)

Another benefit of registering on Dubai's mainland is that you'll be allowed to bid for lucrative government contracts. You may be in a strong position if your startup provides services that are in sync with government projects. The UAE's government contract work is worth billions of dollars per year. You'll be able to establish the framework for long-term commercial networking and success if your company obtains the trust of Dubai's authorities. Winning official government contracts in the UAE will surely boost your company's name and prestige both inside and beyond the UAE.

You have the freedom to grow your business and your staff

Every business wants to grow and develop, and a mainland Dubai registration allows you to do just that. You will be allowed to apply for an unlimited number of visas if you use the mainland route. It’s worth mentioning that applying for more visas will necessitate more warehouse or office space, which is typically 100 square feet per visa.

The obligation to rent additional office space is often negotiable with the Dubai DED if you employ many remote workers who do not require workspace. Having a company incorporated on the Dubai mainland allows you to spread your operations throughout Dubai and the UAE. If branch expansion is a priority for your organization, consider obtaining a Dubai DED license.

There are no restrictions on trade between Dubai and the UAE

If you register as a Dubai mainland company, you have no restrictions on who you can trade with or where you can trade in Dubai. Setting up shop on the mainland allows you to plan for any type of trade without worrying about breaking your UAE trade license. There are several legal prerequisites for founding a mainland company in Dubai, including the necessity that it be sponsored by a Dubai national. By hiring professional assistance from a reputable business setup provider, you may maintain managerial and financial control of your company.

The Advantages of Opening a Branch Office

COST

In many countries, the overall cost of establishing a new branch is less than the cost of creating a new corporation. In the UAE, branch offices are not required to keep audit reports. Using a small office for your Dubai branch might also help you save money on administrative and operational costs.

NOVELTY

Establishing a branch office is a straightforward way to enter a new market. Establishing a branch office in Dubai is less expensive than launching a new company from the ground up.

PARTICIPATION

By establishing a branch office on Dubai's mainland, the company would be able to participate effectively in the UAE's local markets. A Branch Office enables a corporation to do business directly on the mainland of Dubai without the requirement for a local distributor or agent.

TIME SAVING

Auditing a large firm with daily financial transactions takes a long time. The creation of a Branch Office will facilitate the legal tracking of all transactions between the branch and the parent company.

TAX ADVANTAGE

Businesses may take advantage of the UAE's tax environment to the fullest degree feasible because it has no corporate or income tax. By opening a branch office in Dubai, the firm can take advantage of the Double Taxation Avoidance Agreement (DTAA) and save tax in its home country.

Procedure of setting up a Dubai based Mainland Company’s Branch

Below is a list of the basic contents which can assist you in setting up a Branch Office of your Company-

Choose the best legal jurisdiction for your business

The foreign corporation must decide whether the Branch Office will be located on the mainland, in a free zone, or offshore. When starting a business on the mainland of the UAE, there is a legal need to select a Local Service Agent to coordinate administrative tasks with government authorities.

Find out who your local service agent is

The Local Service Agent is allocated for a year for an annual charge. Each year, the contract is renewed, with the option to change agents if there is a disagreement. In Free Zones and Offshore, there is no requirement to name a Local Sponsor, and the Manager/Director will be the authorized person to oversee the Branch Office's commercial activities.

Obtain a Business Name

The Branch Office and the Parent Company in the Home Country must have the same name. In the case of Mainland Company, a name approval application must be submitted to the Department of Economic Development (DED). If the investor decides to establish in one of these jurisdictions, an application must be submitted to the relevant Free Zone/Offshore authorities.

Attestation of documents by the Government of the United Arab Emirates

The firm paperwork must be certified by the UAE embassy in the home country, which must also be counter-attested by the UAE Ministry of Foreign Affairs. The following documents must be certified by UAE authorities in their home country and then counter-attested in the UAE.

  • Incorporation certificate/Memorandum of Association (MOA), Articles of Association (AOA)
  • Parent Company Good Standing Certificate
  • Power of Attorney in favour of General Manager granting him the authority to open/operate/manage bank accounts on behalf of the Parent Company

Obtain a permit from the relevant government agency

Submit the certified documents, along with the supporting documentation, to the appropriate government authorities to obtain a Branch Office License. There is a fee that must be paid to the authorities in addition to the filing of the documents. When the paperwork has been reviewed, the investor will be given the Branch Office License.

Ascertain that all administrative obligations are met

The investor can now apply for a UAE residence visa, open a corporate bank account, hire employees, process immigration cards and labour contracts, expand office space, and conduct business in the UAE.

Prepare an application for a branch office

One can open a branch office in Dubai by preparing the relevant documents, filling out the application form, and submitting it to the Dubai Economy. It's important to remember that a branch office must have a local service representative. Dhanguard will assess all of your company's needs in order to assist you in finding the best local service agent for your branch office.

The consent of the Board of Directors is required

In order to open a branch office, the board of directors must pass a resolution declaring the opening of a new branch office. The Board of Directors has the power to appoint one director to set up the branch company and oversee its operations.

Branch Offices registration

The corporation can begin the process of registering the branch after the board resolution is accepted. Following the steps indicated above, the Company can obtain a business licenseand register its branch on Dubai's mainland. Dhanguard will provide you with end-to-end business support services to assist you in quickly registering your company's Dubai branch office.

Documents

  1. A Know Your Customer (KYC) form must be completed by each shareholder, director, and manager.
  2. A copy of each Shareholder's/Director's/Valid Manager's passport is required.
  3. Suggestions for Business Names
  4. Application for Registration and Licensing
  5. The Certificate of Registration of the Parent Company
  6. A current extract from the Commercial Registrar or a certificate of incumbency
  7. A valid business license
  8. The parent company's original certificate of good standing
  9. The Memorandum and Articles of Association of the Parent Company
  10. Physical proof of the parent company's address
  11. A vote of the shareholders or a vote of the board of directors
  12. Each shareholder, director, or manager must produce proof of residency.
  13. The most recent audited balance sheet of the Parent Company
  14. Beneficial Ownership Declaration of the Parent Company (List of Shareholders)
  15. A letter of no objection (NOC) from the current sponsor is necessary for each Shareholder/Manager.

How can Dhanguard help?

We at Dhanguard endeavor to give you with simple and quick solutions as well as competent advice so that you may successfully create your Branches. Please visit our website or call us for immediate assistance!


Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

Dhanguard provides the company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free offshore company formation services and company formation services in Mainland and Freezone in UAE.

Branch of Dubai Based Companies FAQs

  • How can I open a Foreign Company’s Branch office in Dubai?

    1. Select the Most Appropriate Business Jurisdiction
    2. Determine who the Local Service Agent is
    3. Make a Trade Name Reservation
    4. Government of the United Arab Emirates attestation of documents
    5. Obtain a license from the appropriate government agency
    6. Meeting Administrative Requirements is a must

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