A branch of a foreign company can carry out activities which are similar to those of its parent company. However, the activities that may be carried out through a branch of a foreign company are limited to those permitted by the UAE Ministry of Economy from time to time.
The Commercial Companies Law covers the formation and regulation of branches and representative offices of foreign companies in the UAE and stipulates that they may be 100% foreign owned, provided a local agent is appointed.
Local agents – also sometimes referred to as sponsors – are not involved in the operations of the company but assist in obtaining visas, labour cards, etc and are paid a lump sum and/or a percentage of profits or turnover. In general, branches and offices of foreign commercial companies are not licensed to engage in importing activity except for re-export or in the case of products of a highly technical nature.
The difference between a representative office and a branch office is that a representative office is limited to gathering information and taking orders and projects on behalf of the parent company. We can also say that a representative office works as an administrative and marketing office for the foreign company. By contrast a branch office is a full-fledged business, which can perform all contracts or activities as specified in the license.
Documents required for opening a Professional Firm
- Parent Company registration certificate duly attested from the UAE embassy in the home country of the parent company
- Board resolution for establishing a branch and to appoint the manager for the same
- Attested copy(from UAE Embassy) of company’s memorandum / articles of association
- Financial statements for the last two years
- Local service agency agreement duly noterised in the UAE courts
- Passport copy of the local service agent
- Passport copy of the Manager
- Company profile
- NOC letter in favor of the Manager from the sponsor company if he is a resident of the UAE