Branch or Representative Office in UAE
A branch is a legal entity that is separately registered but considered as part of a parent company. A parent company holds 100% ownership of a branch, which has to have the same name and conducts the same business activities as its mother company does. For example, a parent company is engaged in trading business, so its branch in the UAE shall be licensed to do the same type of trading. The branch must have its own budget and profit/loss statement.
Local Service Agent
A branch has to appoint a local services agent, who is a UAE national and has no authority or financial interests in the branch’s business. Local service agent can be an individual or legal entity fully owned by a UAE national. The primary role of a local service agent is to be a liaison between the branch and the government departments. For instance, the local service agent applies for various approvals, work permits, employment visas etc. on behalf of the branch. The relationship between the branch and the local service agent is regulated by an agency agreement. Local service agents usually charge a yearly lump sum payment for being an agent.
Ministry of Economy Registration
The requirements and steps for registering a branch in Dubai differ depending on the activity of a parent company. If a parent company is involved in trading, commercial or industrial activities, then the branch of such company shall be registered first with the UAE Ministry of Economy (MOE) and then with the Department of Economic Development (DED). MOE registration is not required if the activity of a parent company is professional services.
A representative office is not a separate entity but a business activity that a branch can have. The purpose of a representative office is to promote and market the parent company’s products or services but not to trade or deliver services on its own. A representative office must be registered with the UAE Ministry of the Economy along with the Dubai Department of Economic Development.
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