Branch Office :
For Foreign companies to open branch offices in the UAE, they need a Local to act as service agent.
A service agent is basically the same as a sponsor.
The service agent is paid a fixed fee only for his services and does not receive any commission or profits.
Licenses are issued by the UAE Ministry of Economy & Commerce.
Free Zone :
The benefits of setting up a business in the Free Zone are that a foreign investor can own 100% of the equity, no tax on profits, import and export tax exemption, exemption from commercial levies, unrestricted "repatriation" of capital profits, multi-year lease for land and warehouses.
Free Zone authorities provide support and administrative resources, such as sponsorship of employee and security worker housing and recruitment.
There are four different types of business licenses you can establish in the Free Zone :
FZE - Free Zone Establishment
FZC - Free Zone Company
Branch of a foreign company incorporated outside the U.A.E.
Branch of a company registered in the U.A.E.
Limited Liability Company :
For Foreign companies to open branch offices in the UAE, they need a Local to act as service agent :
Proof of the above is required in one of the following ways:
§ Where the capital is paid in cash, a letter from a Bank operating in the same Emirate.
§ Where assets are contributed in return for shares, an Accountant’s Valuation.
These must state that the minimum share capital has been paid and at least 51% of this has been paid by the UAE National.
Following the above, the capital can be used as working capital by the business.
Management of the company can be organised by a separate contract with a third party, which could be the foreign company.
Profits and losses can be shared disproportionately between shareholders.
Professional Firms :
Non commercial activities such as those established by professionals like consultancy, civil engineering, medical and educational services do not require a local partner. According to local order # 63 of 1991 issued which permitted non-nationals to form such companies subject to compliance with certain conditions. The important aspect is that the company must have a local service.
A Local Service Agent to acts in an assisting capacity in obtaining and renewing the company’s license and immigration requirements from the Ministry of Labor & Social Affairs and other concerned authorities.