Establishing a Branch Office in Dubai

Any entrepreneur looking to carve a niche in the lucrative marketplace of UAE is faced with a lot of options. There are many who choose the free zone or standard mainland setup. However, a branch office is a wonderful alternative if you’re looking for a presence in the local market while retaining 100% ownership of your business.

There are abundant reasons that favor the establishment of a company branch office – from favorable tax treatment to gain a point of entry in a new market. But first, let’s look at the different types of branch office you can set up in Dubai.

Types of branch office:

The four most common types of branch office to consider will be based on your needs and will also depend on your business activities, your company setup and a few other essential factors.

1. Corporate shareholder: In this case, the parent company can either be based in the UAE or abroad. Corporate shareholder offices permit an individual shareholder to hold a stake in the business in addition to the license.   
2. Branch Company: As the most common setup in the UAE, the Branch companies are different from corporate shareholder offices as the parent company remains the sole owner. For this reason, there is no share capital required to open a branch office.   
3. Representative Office: The most cost-effective of all branch types, the Representative Offices are limited to promoting and sourcing work for the parent company. Representative Offices are not permitted to make a profit in the UAE and are mandated to outsource all work back to the parent company.
4. Subsidiary: As the most unique of the branch types, the Subsidiaries are considered a separate legal identity to the parent company and have to be managed from within the UAE. 

Benefits of setting up a branch office in Dubai:

Besides the ability to trade in the local market and maintain 100% ownership of your business, there are several other reasons to set up a branch in the UAE. Here are the top factors:

• Tax benefits: Discussing the benefits of setting up any type of company in the UAE is impossible without mentioning the country’s incredible tax rules. According to the jurisdiction and country of origin, parent companies of branches can capitalize on the UAE’s 0% corporate tax rate.  
• Audit trail: It’s a big challenge to audit multi-national companies. Setting up a branch office is quite helpful in solving this problem. All the monetary transactions between the parent and branch company are legally tracked. 
• Low administrative burden: The complexities of running offices across multiple countries can be avoided when running a branch office. As the UAE branch offices are not required to submit audited accounts, there is usually no need for a separate finance function. 
• Cost-effective route into new markets: Entering new markets overseas can be costly. But that is not the case in the UAE. In the absence of share capital requirement, branch offices offer entrepreneurs a wonderful opportunity to grow their business without high upfront costs. Furthermore, as branch offices are often smaller than standalone organizations, running costs are usually quite low.  

If you’re looking to get a foothold in the UAE and are convinced of the benefits of a Branch of a Foreign Company in Dubai the good news is that it’s incredibly straightforward to set up. Just get in touch with a professional business setup consultation firm and start your journey towards success.