Fortunum Investments Ltd.

Introduction

There are many instances where foreign companies wish to set up a presence in Dubai. The foreign company can either open a Representative Office or a Branch Office in Dubai. The difference between the two is quire simple. A Branch can conduct commercial activities –i.e. invoice customers and clients – whereas a Representative Office can only conduct marketing activities or provide support and guidance to distributors, and agents in Dubai who have been appointed by the Parent company.

The Dubai Branch of a Foreign Company Incorporation Procedure

To incorporate a branch of your parent company, you will have to follow a six-step procedure. They are as follows;

Step 1: Board Resolution, & Appointment of Manager

The Foreign Parent has now decided to open a Branch in Dubai. This decision has to be officially recorded as a Board Resolution by a majority of the board. This resolution should contain the following points;

• The decision to open a branch in Dubai
• Naming and Appointing the person who will head the Dubai Branch. In Dubai this person will be called the “Manager.”
• A decision to give this manager power of attorney to discharge his duties as head of the branch.

Step 2: Preparation of the necessary Documents

The foreign parent then has to prepare the documents required for incorporation of the Dubai Branch. Once these documents are put together, they have to be notarized by the UAE Embassy in that country. You will then have to courier these documents to Fortunum Investments Ltd to complete the incorporation process in Dubai.

The required documents to set up a Branch of a Foreign Company in Dubai are as follows;
• Memorandum and Articles of Association of the Foreign Parent
• Certificate of Incorporation
• Board Resolution
• Power of Attorney
• Audited Financial Statements for the past 2 years
• Bank Statements for the past year
• A letter of introduction from the Parent Company’s bankers

Step 3: Attestation of the Documents in Dubai and Translation into Arabic

Once the documents reach Fortunum Investments Ltd. in Dubai, we will have to take these documents to various Government Ministries and Departments for their approval and/or attestation. Once all the necessary stamps have been placed, the documents will have to be translated into Arabic before we can present them for incorporation.

Step 4: Initial Approval

Obtaining the Initial Approval is the most important part of the incorporation process. The Initial Approval is a document issued by the Dubai Government licensing authorities which approve the following;

• The Business Activity: Unlike other jurisdictions where you incorporate a company and begin trading, Dubai is different in that each and every business activity that you wish to undertake must be approved first by the Dubai Government.


• Company Structure: There is only one company structure available for a Dubai Branch – that of a fully owned subsidiary of the foreign parent. The Dubai Branch will not have any shareholders – it is legally an extension of the foreign entity.

Step 5: Fulfilling the Conditions of the Initial Approval

The Initial Approval Document contains a list of conditions that must be fulfilled before the final license is issued. These are usually;

• Renting an Office: Dubai has very strict zoning laws. You cannot register a company at your home. You cannot even use your friend’s office – it is a strict one company per office rule in Dubai.


• Courts and Notary Procedures: To register a Dubai Branch of a Foreign Company, you have to first appoint a local sponsor to act as your UAE National Service Agent. There is a standard agreement which outlines the service agreement between you and the UAE National Service Agent. This document has to be signed and executed at the Dubai Courts Notary Public Section.


• Related Ministry or Related Department Approval: If you are setting up a straightforward consulting company you will not be required to obtain any further approvals. However, there are many business activities where the Dubai Government has to make sure that you are competent to carry out the intended business – or there is legislation in place so that a Ministry or Department oversees and approves the licensing procedure. For example, if you wish to set up a financial investment consultancy you will have to obtain Central Bank Approval.

Step 6: License Issue

Once all the conditions have been fulfilled, the Licensing Authorities take about 1 – 2 days to check all the documents. A payment voucher will be given to you – in effect an invoice – covering the license fees. Once you pay the license fee – the Final License will be issued.