A branch office has the same legal identity as its parent company and conducts business under the name of its parent company. While each Emirate has its own licensing rules for branch offices, this type of entity can carry out a variety of activities (as approved by the Department of Economic Development of the relevant Emirate). Branch offices are regarded as fully-fledged businesses permitted to perform contracts or conduct other activities as specified in its license.
For example, in order to open a Branch Office in Abu Dhabi, a foreign company must comply with points 1 and 2 from the following list:
1. Obtain the following documents in the home country of aforementioned company
- Official document evidence that the company is duly registered and established in that country, indicating its legal form, paid up capital, as well as names, title, and powers of its representative.
- Resolution from the company’s board of directors (or other competent administrative entity) regarding opening of its branch in Abu Dhabi and practicing its activity there.
- True copy of the memorandum of association of the foreign company, or its articles of association.
- The last two approved financial statements (balance sheet, statement of profit and loss, and notes to the financial statements) of the company, in addition to the auditor’s report thereon.
- A declaration from the company addressed to the UAE Ministry of Economy in which it undertakes to bear any financial obligations caused by its branches in the United Arab Emirates.
- A notarized power of attorney for the person who will sign the agency agreement with the company’s national agent in Abu Dhabi and who will represent the company before the Abu Dhabi authorities.*
*All of the above documents (except item d) must be attested at the Embassy of the UAE in the country of origin. In addition, all these documents must be translated into Arabic in the UAE and certified by a UAE-certified translator and attested by the UAE Ministry of Justice.
2. Obtain the following additional documents to be submitted by the company applying for a branch license. However, these documents do not need to be attested outside the UAE
- Licensing application.
- Details list of activities in which the company wishes to practice in the state.
- Agency contract concluded between the foreign company and the local agent.
- List of the major operations carried out by the company outside the UAE plus the previous experiences in the field of activity intended to be practiced, in addition to the countries where such activities are taking place.
- A statement showing the number of staff numbers expected to be appointed in the company’s branch office in Abu Dhabi.*
*The working capital of the branch may not be less than AED 250,000 which may be required to be deposited in a bank in Abu Dhabi. Alternatively, the UAE Ministry of Economy may request an open-ended unconditional bank payment guarantee favoring the Ministry for AED 50,000 issued by a bank in the UAE.
Alternatively, a representative/liaison office is limited to promoting its parent company’s activities. This means that a representative office is only permitted to perform such activities as gathering information, soliciting orders, and marketing projects to be performed by the company’s head office. This type of office is also limited in the number of employees that they sponsor (usually three to four).