How to establish representative office of foreign company in the UAE?

How to establish representative office of foreign company in the UAE?

A representative office is basically an extension of an existing foreign branch, however, they are different from foreign branch offices in the way that the foreign branch offices can conduct their business and can earn profit from it, but a representative office cannot do so, it has to farm out all its profit and work back to the parent company, which can be concluded that a representative office helps to capture the mass market in different parts of the world. Focusing on UAE, it gives out plenty of tax advantages and setting up representative offices there will have limited tax liabilities and a 0% corporate tax rate. Along with that no minimum capital is required for the setup and foreign companies experience great global expansion through representative offices in UAE

The following are the necessary requirements for setting up a representative office in UAE:

Reliable Local Agent

Firstly, one needs an Emirati national to act as his/her LSA (Local Service Agent), who is your representative in the dealings with UAE authorities.

Trade Name Reservation

Next, get the documents of your parent company notarized, attested and translated into Arabic in order to submit an official/formal application to the UAE Ministry of Economy and local DED (Department of Economic Development) to reserve the trade name for the foreign or parent company.

Initial Approval

After submitting the parent company papers, preliminary documents and the passport copies of investors, the DED (Department of Economic Development) has to provide an initial approval/pre-approval to set up the representative office in UAE.

Ministry of Economy (MOE)

The Ministry of Economy is required to provide an application that must consist various details regarding the parent company or foreign company (nature of business, the address of the head office, share allotment and the likes). The approval from the Ministry of Economy is very necessary for setting up the representative office.

DED License

The approval from the Ministry of Economy has to be submitted to the Department of Economic Development (DED) in order to further the proceedings for setting up the representative office in UAE. Furthermore, an added documentation has to be also submitted to the DED concerning the nature of the representative office and this would finally lead to issuing of a commercial license by DED.

Next, is a detailed list of the various mandate documents of the Parent or Foreign Company that has to be submitted:

  • Trade name reservation and initial approval forms.
  • Certificates of Memorandum of Association (MOA), Incorporation and Articles of Association (AOA)
  • Power of attorney favoring the General Manager
  • Passport copy of the director
  • Resolution by the board authorizing the opening of the branch office and also a certificate of good standing
  • Audited accounts of the parent company concerning the last two years
  • Notarized agreement with the local agent.
  • Statement stating the company’s established aim, and main activities of operation.
  • Government’s approval
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