Federal Branch (Branch)
A foreign company wishing to carry on professional activities in Dubai must establish a Branch of its parent company and obtain a professional licence from the Dubai Department of Economic Development (DED) and Commercial Registration Certificate (CRC) from the Ministry of Economy (MOE), which requires the Branch to have business premises in Dubai.
Features of a Branch
A Branch does not have a separate legal personality from that of its parent. To establish a Branch, the parent company must appoint a UAE national, or company wholly-owned by UAE nationals, as its National Agent.
The National Agent is appointed pursuant to a National Agency Agreement and provides “local services” (such as facilitating the issuance of residency visas and work permits for your employees, and handling the renewal of the professional licence each year) in return for an annual services fee.
The National Agent does not, however, assume any financial or legal liability for the Branch. The foreign investors maintain full ownership and control of the business which is operated through a general manager who must be, or become, locally resident in the UAE.
There are no capitalisation requirements, but the parent is required to show details of its own capitalisation and good standing. However, a bank guarantee of AED 50,000 must be deposited with the MOE throughout the lifetime of the Branch. Profits of the Branch can be repatriated without deduction.
Summary of registration and licensing formalities
This is a two-stage process involving the DED and MOE. An application first be made to the DED to seek initial approval to establish the Branch and for registration of its business name. The Branch’s professional activities must reflect those of its parent company. The application must be supported by the parent company’s corporate documents, which must be notarised, attested and translated into Arabic.
Then an application is made to the MOE to obtain the CRC. In addition to payment of the MOE’s fees (see below), the applicant must submit a bank guarantee to the MOE in the sum of AED 50,000, which must remain in place throughout the duration of the Branch.
The Branch must enter into a lease of suitable premises from which the LLC’s business may be operated and obtain an Ejari certificate from the Landlord (an official summary of the lease terms issued by the Real Estate Regulatory Authority in Dubai).
Provided the supporting documents are prepared swiftly, and the lease terms have been agreed in principle at the outset, it should take between 2 to 3 months for the Branch to be established.