company law.
There is a difference between the
corporate structures of a branch company
and representative office of a parent
company (based abroad). A branch fffice
that is legally part of its parent company
is permitted to enter into legally binding
contracts or carry out activities that
are specified in its commercial license
and are similar to those of its parent
company. Each branch can have several
sub-branches, with the same licensing
and registration procedures. On the other
hand, a representative office is limited to
promoting its parent company's activities,
i.e., gathering information and soliciting
orders and projects to be performed by
the company's head office. In addition,
representative offices are also limited to
the number of employees they may use.
In other words, activities are limited to
promotion and enhancing business of the
parent company.
taxes on corporate profits or personal
income except for oil companies that pay
a flat rate of 55 percent and branches of
foreign banks that pay a flat rate of 20
percent on net profit generated within
Dubai. Customs duties are low at 4
percent with many exemptions. A branch
office is not otherwise subject to any
direct or indirect taxes.
Businesses can avail 100 percent
repatriation of capital and profits. There
are no foreign exchange controls, trade
quotas or barriers. A stable exchange
rate exists between the US Dollar and the
UAE Dirham (US $1.00 = AED 3.678).
Liberal visa policies permit easy import
of expatriate labour with various skills
and expertise.
Requirements
or a representative office, a license
application must be submitted to the
is approved, it is then sent to the
Economic Department of the emirate in
which the application is filed. The time
required to form a branch/representative
office of a foreign company is
approximately four weeks.
Documents such as board resolution
of shareholders of parent company,
articles of association, memorandum of
association, commercial license must be
submitted to the Economic Department.
Authorized representative of parent
company must file these documents at the
appropriate department. It is advisable
to appoint a law firm to ensure that
all documents are filed properly at an
appropriate department to avoid delays.