ESTABLISHMENT OF A BRANCH OFFICE

The Commercial Companies Law (CCL) allows foreign companies to establish a branch office in the UAE. The scope of activities permitted to be undertaken by branch offices varies from Emirate to Emirate, although generally a broad range of commercial trading activities can be undertaken. In Dubai, as an alternative to the branch office, there is provision for a "representative office" although these are becoming less common. Representative offices may generally only conduct representative, marketing and other promotional activities, and may not trade. A foreign company establishing a branch office in one of the Emirates must obtain consent from the Ministry of Economy before local business license from the government of the relevant Emirate is issued.

Furthermore, the applicant company is now required to deposit a bank guarantee in the sum of AED 50,000 to the Ministry of Economy. The branch office must also be sponsored by a UAE national or by a locally registered company wholly owned by UAE nationals. The sponsor is known as the National Agent. A formal National Agency Agreement is required, in which the National Agent undertakes to sponsor and assist the foreign company, usually in return for a fee. It is not advisable for a National Agency Agreement to be signed without legal advice having been taken.