Branches and Representative Offices of Foreign Commercial Companies
The Commercial Companies Law also covers the formation and regulation of branches and representative offices of foreign companies in the UAE and stipulates that they may be 100% foreign owned, provided a local agent is appointed.
Only UAE nationals or companies 100% owned by UAE nationals may be appointed as local agents (which should not be confused with the term “commercial agent”). Local agents – also sometimes referred to as sponsors — are not involved in the operations of the company but assist in obtaining visas, labour cards, etc and are paid a lump sum and/or a percentage of profits or turnover. In general, branches and offices of foreign commercial companies are not licensed to engage in importing activity except for re-export or in the case of products of a highly technical nature.
- Apply for a license from the Ministry of Economy and Commerce, submitting an agency agreement with a UAE national or 100% UAE owned company.
Before issuing the licence, the Ministry will:
- Forward the application to the Department of Economic Development to obtain the approval of the Dubai government
- Forward the application specifying the activity that the office or branch will be authorised to undertake in the UAE, to the Federal Foreign Companies Committee for approval
- Once this has been done, the Ministry of Economy and Commerce will issue the required Ministerial licence specifying the activity to be practiced by the foreign company
- The branch or office should be entered in the Economic Department’s Commercial Register, and the required licence will be issued
- The branch or office should also be entered in the Foreign Companies Register of the Ministry of Economy and Commerce.
- Finally the branch or office should be registered with the Dubai Chamber of Commerce and Industry.