The Advantages of Opening a Branch in Dubai

One of the ways to expand a business in Dubai is through a branch office. This is also one of the most advantageous types of entities a foreign entrepreneur can register in the Emirate from several points of view. Below, overseas company owners can find out more about the benefits of this legal form, especially in the context of tapping into new markets.

Full foreign ownership of the Dubai entity

While the regulations for owning a fully foreign-owned company in Dubai have been relaxed when it comes to domestic business, the branch office is not subject to these requirements.

Under the UAE law, branches are considered extensions of their parent companies. As such, they are not separate legal entities. Even if they are bound to carry out the same activities as the foreign enterprise, the main advantage remains: there is no need for a local partner to share profits with.

Simple and quick registration procedure

One of the main reasons many foreign entrepreneurs choose to register a company in Dubai is the quick setup process, which can take a few days only. However, when establishing a branch, the process is even simpler, especially since the documents to file only need to be translated and authenticated. These are the Registration Certificate and Articles of Association of the parent company, alongside a copy of the passport of a local representative who will act as a director. For this latter purpose, there are plenty of specialized service providers to choose from. Another document to consider is the trading name reservation form, which can be obtained in 1 or 2 working days.

Low operational and maintenance costs

Launching a business in another country can imply relatively high costs. As a paradox, opening a branch in Dubai is definitely cheaper than in other jurisdictions. One of the main reasons and advantages is the lack of a minimum share capital required upon registration. This means the parent company decides the amount it needs to operate, based on its object of activity.

Maintenance costs are also lower compared to other countries, especially when choosing to establish the branch in a Dubai free zone, for example, where dedicated facilities have competitive prices. You can benefit from complete assistance with the incorporation process from the experts at BridgeWest Dubai.

Taxation – a clear advantage for a branch office

One of the main advantages of having a Dubai branch is taxation. Given the fact that it is not a domestic entity, it will pay the corporate tax on the profit it makes in the Emirate. However, in Dubai, this levy, which has a rate of only 9%, can be 0% for profits below AED 375,000 (about USD 102,000). Exceptions apply to banks and businesses in the oil and gas industry, which are levied higher taxes.

Profit repatriation to the parent company’s home country is also advantageous, as the applicable fees are low or do not apply (often the case of free zones). Moreover, the UAE is one of the countries with the largest number of double tax treaties, over 100, which enable special tax rules for branches.

Strategic location

The actual place of doing business is always important, no matter the type of entity one opens. Dubai has an excellent geographical location, which allows easy connection to two-thirds of the globe. This advantage is doubled by the access to two of the most important seaports and airports in the world, which ease import and export activities.

Great marketplace, logistics, and workforce

No matter if a foreign company targets the Middle Eastern market or another one, it will be able to access it very easily through a great logistics infrastructure made up of transportation and warehousing facilities.

Workforce is another key advantage provided by Dubai, as foreign companies have great chances of hiring residents from their own home countries quite often. If that is not the case, the procedure of hiring and filing for work visas for foreign workers has been streamlined in recent years.

These are some of the main advantages of opening a branch in Dubai. However, other benefits are available for those seeking to set up operations in specific sectors, which is why choosing the UAE as a business destination is definitely worth it.