company law. There is a difference between the corporate structures of a branch company and representative office of a parent company (based abroad). A branch fffice that is legally part of its parent company is permitted to enter into legally binding contracts or carry out activities that are specified in its commercial license and are similar to those of its parent company. Each branch can have several sub-branches, with the same licensing and registration procedures. On the other hand, a representative office is limited to promoting its parent company's activities, i.e., gathering information and soliciting orders and projects to be performed by the company's head office. In addition, representative offices are also limited to the number of employees they may use. In other words, activities are limited to promotion and enhancing business of the parent company. taxes on corporate profits or personal income except for oil companies that pay a flat rate of 55 percent and branches of foreign banks that pay a flat rate of 20 percent on net profit generated within Dubai. Customs duties are low at 4 percent with many exemptions. A branch office is not otherwise subject to any direct or indirect taxes. Businesses can avail 100 percent repatriation of capital and profits. There are no foreign exchange controls, trade quotas or barriers. A stable exchange rate exists between the US Dollar and the UAE Dirham (US $1.00 = AED 3.678). Liberal visa policies permit easy import of expatriate labour with various skills and expertise. Requirements or a representative office, a license application must be submitted to the is approved, it is then sent to the Economic Department of the emirate in which the application is filed. The time required to form a branch/representative office of a foreign company is approximately four weeks. Documents such as board resolution of shareholders of parent company, articles of association, memorandum of association, commercial license must be submitted to the Economic Department. Authorized representative of parent company must file these documents at the appropriate department. It is advisable to appoint a law firm to ensure that all documents are filed properly at an appropriate department to avoid delays. |