Because opening a subsidiary or a branch of your company in the United Arab Emirates is rather simple and because such a move would be fiscally beneficial, we suggest that you give this idea some serious consideration. The UAE offer multiple business advantages indeed. At the same time, it is a legal process and any legal process has certain specifics that need your attention. Below we discuss how you can set up a subsidiary (a branch or a representative office) of your company in the UAE.
Tasks that a subsidiary in Dubai can help to solve
The main objective of opening a branch in Dubai is to expand the existing business into a promising well-developed market. There are no requirements as to the charter capital but regular audits are obligatory if the branch is registered in the mainland UAE. If the branch is registered in a free zone, an audit is required to extend a trade license.
The main tasks that a branch of your company in Dubai can help to solve:
- Administration. Dubai is a wonderful place for business administration. Comfortable offices are readily available there and you can easily find highly qualify administrators in the emirate.
- Representation. The UAE offers all kinds of instruments for business development, an active business environment, and multiple opportunities for establishing new business contacts. A subsidiary in the UAE can represent your company in the region.
- Promotion. Major industry events regularly take place in the country. You can attend various forums and exhibitions to promote your products and services and to find new partners and clients.
- Finance. The fiscal burden is small in Dubai and secure investment objects are plentiful. You will have a lot of space for maneuvers if you set up a branch in the UAE.
- Banking. A stable banking system in the country and a high level of confidentiality provide wonderful opportunities for investments and capital accumulation. It is important to know that banks in the UAE do not exchange the account holders’ information with the fiscal authorities of their home countries.
- Logistics. Dubai is the center of transportation and logistics in the UAE. A network of well-paved highways, the largest seaport in the region, and several airports allow transporting your goods in multiple ways.
- Manufacture. It can be highly beneficial to put manufacturing facilities in some Free Economic Zones. You can process raw materials, manufacture component parts for import, or have a full-cycle manufacturing enterprise.
Advantages of registering a branch in the UAE
Registration of a branch in the UAE and in Dubai in particular makes good sense in many respects. The main advantages that you can gain by establishing a subsidiary there include the following ones:
- Tax benefits. Even though a corporate profit tax has been introduced earlier this year, its rate is comparatively low. The UAE remains a low-tax country anyway.
- Low cost of energy resources. This fact can be of great importance for manufacturing companies.
- Highly qualified personnel. You can find specialists from Europe, Great Britain, the USA, Canada, and other countries in the UAE. Besides, many local residents have attended top western universities.
- Low cost of labor. Immigrants from India, Pakistan, and the Philippines have good qualifications but their services do not cost too much.
- Beneficial geographical location. The UAE sits right in the center: you can access many markets from there. An advanced logistic infrastructure adds value to the good location.
- Rapidly developing economy. The economy of the UAE has been steadily growing for many years. The Sheiks have a clear intention to keep developing the country and when the economy is growing, business opportunities are plentiful.
Your branch in the UAE could make substantial profits due to the facts specified above. There are no restrictions in the country on capital withdrawal so you can use the income generated in the UAE to finance other business projects of yours. Registering the branch in a Free Zone would be especially beneficial if you are planning to work with foreign customers (those located outside the UAE).
Where to register a company in the UAE
First, you have to decide if your branch is going to carry out operations in the mainland UAE. If it is, you should register the branch outside the Free Zones. Involving a local person is not necessary but you might consider this opportunity because it would simplify communication with the state agencies in the UAE. On the other hand, registering a company in a Free Zone is easier and you will find even more tax benefits there.
The process of registering a branch of your company in Dubai
When you have decided on the location, you have to attend to other organizational issues. You have to find out about the required registration documents, have the documents in your native language translated into Arabic, and legalize the translations. After that, you can submit the documents for company registration and apply for a license. Please note that a business license is required in the UAE regardless of what type of business activities you carry out.
Conclusion
Opening a subsidiary or a branch in Dubai allows obtaining resident visas for the director and key company officers. Besides, it allows finding new business partners in foreign countries, entering new markets, and scaling your business efficiently. The process of registering a subsidiary is less demanding than starting a company from scratch in Dubai. In addition, it is going to cost you less money.
The only difficulty that you may face in the Emirates is connected with the banking services. Bank administrations in the country meticulously check every prospective client before opening an account for him or her. Setting up a corporate bank account in the UAE can be an even more challenging procedure.
If you have succeeded in opening a bank account for your subsidiary company in the UAE, you cannot start living a carefree life. If the bank finds an incoming or an outgoing payment suspicious or extravagantly large, your account may be blocked in an instant. The bank officers have to clearly understand what your business is and what financial operations are required to carry it out. Please bear this fact in mind.
No country is perfect for doing business there and the UAE has its minuses too. However, the pluses that the jurisdiction offers are much greater and establishing a branch of your company in Dubai or in another Emirate would be a very good idea. You can overcome all possible obstacles in the process if you seek professional advice.
