A representative office is an extension of an existing foreign business. They are distinct from foreign branch offices. A foreign branch office can conduct business in the UAE and earn a profit, a representative office in the UAE cannot. The representative office should farm out all its work back to the parent company.
Benefits of Setting Up a Representative Office in Dubai UAE
Many foreign companies opt to test the UAE market by setting up a representative office since running costs are often lower. For many entrepreneurs, opening a representative office acts as a steppingstone to understand their prospects in the UAE. It can serve as a great opportunity to make local contacts. There has been a surge in representatives’ offices in the lead up to Expo 2020 in Dubai.
Freezone jurisdictions require no share capital to open a representative office which can be a big plus point. Even in non-freezone jurisdictions, you can maintain 100% ownership since it is treated as an extension of the foreign parent company. Depending on the jurisdiction of the parent company, you may be able to take advantage of the UAE’s corporate tax rate on sales linked to the UAE. Please speak to a tax specialist in your home jurisdiction.
Representative Office Business Setup Process
The process for setting up a representative office is like the usual process for UAE mainland businesses with minor amendments. You will need an Emirati national to acts as your “Local Services Agent” (LSA). They will act as your representative in all dealings with the UAE authorities. A business setup consultancy such as ours can help you acquire an LSA if you don’t have one.
You will need your parent company documents notarised, attested and translated into Arabic to submit a formal application to the UAE Ministry of Economy and the local Department of Economic Development (DED).
Required Documents for Representative Office
The required documentation for registration and approval of a representative office will include but is not limited to:
- Certificate of incorporation, memorandum, and articles of association, and a certificate of good standing from the parent company’s home jurisdiction;
- A board resolution to authorize the opening of the representative office, explain the company’s main business activities, appoint a general manager and grant a power of attorney to the general manager. Your board resolution will need to confirm that the company accepts responsibility for the liabilities of the office when established in the UAE. And also authorizes the company to open and operate a local bank account;
- Audited accounts of the parent company;
- Passport copy for the General Manager;
- Proof of address for the General Manager
As far as getting a physical site, many representative offices choose to set up within a business centre as they can cater to all their needs for a fixed cost. It also allows them to scale up if there are a lot of international staff from the parent company traveling in and out of the UAE.
Once incorporated, setting up a representative office allows companies to apply for residence visas. The number of visas depends on the jurisdiction and is linked to the size of your representative office premises. Just like other residence visas, you will be able to sponsor dependents if you can meet the standard requirements.
Note: We can help you get employees or family visas through our PRO services.Let Us Help You
Currently, we have helped many international companies set up their representative office in Dubai. We can streamline the process so you can focus on making your business a success. Speak to us for a free consultation. We don’t just focus on the incorporation process; we can put you in touch with other businesses that will make your UAE business launch a success.
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