Branch Of A Foreign Company

A foreign company wishing to carry on consultancy-related activities in Dubai can establish a Branch and obtain a Professional Licence from the Dubai Economy (DED), the local licensing authority in that Emirate, and a Commercial Registration Certificate from the Ministry of Economy (MOE).

In order to establish a Branch in ‘mainland’ UAE, the foreign parent must appoint an Emirati individual, or company wholly owned by Emiratis, as its National Agent (more commonly referred to as a Local Sponsor). The Local Sponsor, who is appointed by an agreement signed before a UAE court notary public, provides local services to the Branch, such as facilitating residency visas and work permits for Branch employees and their families, and assisting with the renewal of the Branch Licence and Commercial Registration Certificate each year in return for an annual services fee. The Local Sponsor does not assume any financial or legal liability for the Branch.

A Branch does not have a separately legal personality and therefore its foreign parent retains full legal ownership and management control. A Branch is managed by a General Manager who must be, or become, locally resident in the UAE.

Establishment of a Branch

In order to register a Branch in the Emirate of Dubai, an application must be submitted to the Dubai Economy, in Arabic, to reserve the Branch’s trade name which should be similar to that of its foreign parent. Given the number of businesses operating in Dubai, applicants are advised to provide at least 3 different options/variations of the proposed Branch name.

Following reservation of the Branch trade name, an application must be made to the DED to obtain initial approval to the business activities to be carried out by the Branch, which must be selected from a list of business activities published by the DED. It is important that these reflect the objects contained in the foreign parent’s Memorandum and Articles of Association (or other byelaws). The approval of an external Government authority may be required for some activities, such as, education and training.

The above applications must be supported by notarized, attested and translated copies of the corporate documents of the foreign parent, including its memorandum and articles of association (or other byelaws), a board resolution resolving to establish the Branch and a power of attorney authorizing someone in Dubai to handle the establishment formalities on its behalf.

At this stage, the Local Sponsor is appointed pursuant to a National Agency Agreement signed by the parties, in English and Arabic, before a Dubai court-notary public.

An application must then be made to the MOE to obtain the Commercial Registration Certificate for the Branch. To obtain this, the foreign parent must provide a bank guarantee (issued by a UAE based bank) of AED 50,000, which must remain in place throughout the duration of the Branch.

The foreign must enter a lease of suitable commercial premises at this stage from which to operate the business, and obtain an Ejari certificate from the Landlord (an official summary of the lease terms issued by the Real Estate Regulatory Authority in Dubai).

Once the above documents have been reviewed by the DED, a payment voucher (invoice) will be generated. The Professional Licence will be issued on settlement of the payment voucher and is renewable each year.

Given that the Branch formation process involves two separate Government authorities and a local bank, the establishment of a Branch can sometimes take anywhere between 3 and 6 months.

For information on how we can assist with your Branch establishment, please contact enquiries@cbddubai.com