Essential Requirements for Setting Up a Branch of a Local Company.
What is a Branch of a Local Company?
A branch of a local company refers to a separate office or facility established by an existing business that is already licensed to operate in the UAE but located outside of Free Zones. This setup serves as an expansion of the local business into a Free Zone, enabling the company to conduct its operations within that area. The process for acquiring office or warehouse space in a Free Zone is quite similar to obtaining an initial business location.
To officially establish this branch, the existing trade license must be amended to reflect the new business location. It's crucial for business owners to verify that their proposed activities comply with the specific zoning regulations of the Free Zone. Typically, this can be confirmed through a straightforward call to the Planning Department of the Department of Economic Development.
Once the branch receives approval from the Free Zone Authority, it is granted the same authority for business activities as the parent company, in accordance with the existing license. However, it’s important to note that the regulations governing Free Zones are self-regulating; therefore, the licensing and authorization from Mainland UAE do not automatically apply to the new branch. Instead, the local branch must obtain its own license from the Free Zone authority where it intends to operate.
To officially establish this branch, the existing trade license must be amended to reflect the new business location. It's crucial for business owners to verify that their proposed activities comply with the specific zoning regulations of the Free Zone. Typically, this can be confirmed through a straightforward call to the Planning Department of the Department of Economic Development.
Once the branch receives approval from the Free Zone Authority, it is granted the same authority for business activities as the parent company, in accordance with the existing license. However, it’s important to note that the regulations governing Free Zones are self-regulating; therefore, the licensing and authorization from Mainland UAE do not automatically apply to the new branch. Instead, the local branch must obtain its own license from the Free Zone authority where it intends to operate.
What are the Requirements for Setting Up a Branch of a Local Company?
The requirements for establishing a branch of a local company largely mirror those for forming other types of businesses. However, there are a few specific considerations that prospective branch owners or managers should keep in mind:
Ownership Structure: Since the original business is already licensed and operating within the UAE outside of any Free Zone, the basic ownership requirements have typically been fulfilled. This usually includes the stipulation that a UAE National holds 51% ownership of the company.
Documentation of Ownership: Even though this ownership requirement is satisfied, documentation may still be necessary to confirm the ownership structure. This could include proof of the parent company’s incorporation, ownership documents, and any other relevant paperwork that validates the business's status.
Compliance with Regulations: Business owners should be aware of and adhere to the specific regulations outlined by the Free Zone Authority. This ensures that the branch operates within the legal framework established for that Free Zone.
Amendment of Existing Trade License: The existing trade license of the parent company must be amended to include the new business location of the branch. This step is crucial for legal compliance and operational legitimacy.
By understanding these requirements and navigating the establishment process effectively, businesses can successfully expand their operations into Dubai’s dynamic Free Zones.
Ownership Structure: Since the original business is already licensed and operating within the UAE outside of any Free Zone, the basic ownership requirements have typically been fulfilled. This usually includes the stipulation that a UAE National holds 51% ownership of the company.
Documentation of Ownership: Even though this ownership requirement is satisfied, documentation may still be necessary to confirm the ownership structure. This could include proof of the parent company’s incorporation, ownership documents, and any other relevant paperwork that validates the business's status.
Compliance with Regulations: Business owners should be aware of and adhere to the specific regulations outlined by the Free Zone Authority. This ensures that the branch operates within the legal framework established for that Free Zone.
Amendment of Existing Trade License: The existing trade license of the parent company must be amended to include the new business location of the branch. This step is crucial for legal compliance and operational legitimacy.
By understanding these requirements and navigating the establishment process effectively, businesses can successfully expand their operations into Dubai’s dynamic Free Zones.
Opt. 1 - Individual Shareholder
Following is a list of required documents for an individual shareholder:
Proof of a physical address for the business.
Certificate of Registration for the existing company.
A lease agreement for the physical address, specifying that the leased space meets minimum requirements.
Memorandum of Association or Articles of Association for the original local business.
Initial approval of activities from the prospective Free Zone Authority.
Trade name registration documents.
Copies of the Manager’s Passport and C.V. (resume), as well as proof of a University Degree.
Since this is an individual shareholder, the shareholder must provide a copy of his passport.
There are no capital requirements for a branch of a local company.
Proof of a physical address for the business.
Certificate of Registration for the existing company.
A lease agreement for the physical address, specifying that the leased space meets minimum requirements.
Memorandum of Association or Articles of Association for the original local business.
Initial approval of activities from the prospective Free Zone Authority.
Trade name registration documents.
Copies of the Manager’s Passport and C.V. (resume), as well as proof of a University Degree.
Since this is an individual shareholder, the shareholder must provide a copy of his passport.
There are no capital requirements for a branch of a local company.
Opt. 2 - Individual Shareholder
How One Stop Solutions Will Help You
Setting up a local branch may seem daunting due to the extensive list of required documents, but One Stop Solutions is here to help you navigate the process with ease. Our team specializes in removing the intimidation factor associated with business setup in the UAE, ensuring a painless and efficient experience.
We will conduct thorough research to confirm that your new location is situated within a zone that is authorized for your specific business activities. Our services include preparing all necessary documents for submission while ensuring compliance with local regulations. With our skills, experience, and local connections, we can help you establish your local branch quickly and smoothly.
Once your business or branch is up and running, we continue to offer ongoing support and a range of additional services to simplify your business operations. Our goal is to give you more time to focus on what matters most—your business and your personal life.
At One Stop Solutions, we pride ourselves on providing cost-effective solutions tailored to meet our clients’ specific needs without the burden of unnecessary fees for services you do not require.
Setting up a local branch may seem daunting due to the extensive list of required documents, but One Stop Solutions is here to help you navigate the process with ease. Our team specializes in removing the intimidation factor associated with business setup in the UAE, ensuring a painless and efficient experience.
We will conduct thorough research to confirm that your new location is situated within a zone that is authorized for your specific business activities. Our services include preparing all necessary documents for submission while ensuring compliance with local regulations. With our skills, experience, and local connections, we can help you establish your local branch quickly and smoothly.
Once your business or branch is up and running, we continue to offer ongoing support and a range of additional services to simplify your business operations. Our goal is to give you more time to focus on what matters most—your business and your personal life.
At One Stop Solutions, we pride ourselves on providing cost-effective solutions tailored to meet our clients’ specific needs without the burden of unnecessary fees for services you do not require.
Key Requirements for Branch Setup
100% Business Ownership in Free Zones.
Establishing a branch of a local company in a Free Zone allows for 100% foreign ownership, which is an attractive option for international investors looking to expand their operations without needing a local partner.
Simplified Licensing Process.
The process to obtain a license for a branch in a Free Zone is generally more streamlined compared to starting a new company. This reduces the time and complexity involved in setting up business operations.
Tax Incentives.
Free Zones offer various tax benefits, including zero corporate taxes and exemptions from import/export duties. This can significantly enhance profitability for businesses operating within these zones.
Access to Modern Infrastructure.
Free Zones in Dubai provide businesses with access to state-of-the-art facilities and infrastructure, including logistics support, advanced communication technologies, and business networking opportunities, all of which are essential for operational efficiency.
Flexibility in Business Activities.
Companies established in Free Zones have the flexibility to engage in a wide range of activities, allowing businesses to diversify operations without being constrained by local regulations that may limit certain business functions.