The number of branches of foreign companies operating in Dubai has increased to 1,985 while the number of branches of GCC companies is 833, according to a report issued by the Department of Economic Development (DED), Dubai.

“These figures reflect the attractiveness of the emirate globally as well as regionally, as it provides a business-friendly environment supported by a modern and integrated system that saves the time and effort of the business community. This is also due to the modern legislative environment that allows businesses to work leisurely and take advantage of the promising opportunities in the local and regional markets,” said Walid Abdel Malik, director of Business Registration Division in BRL sector.

The report shows that according to the distribution of branches of foreign companies by nationality, British companies ranked first, accounting for 28.6 per cent of the total branches of foreign companies, followed by Indian companies at 13.9 per cent, and American companies at 12.2 per cent.

In terms of branches of GCC companies, Kuwaiti companies ranked first accounting for 63.3 per cent of the total branches of GCC companies, followed by Saudi Arabian companies at by 23.3 per cent, and Bahrain companies at 19.1 per cent.

The report also highlighted the distribution of economic activities with “Representative office” coming first followed by “Management Studies and Consulting”; “Architectural Engineering Consulting”; “Building construction engineering services”; and “Marketing consultancy and studies”.

In terms of distribution of economic activities among the branches of GCC companies, “Restaurant” came first followed by “Perfumes and Cosmetics”; “Shoes”; “Handbags and Leather products”; and “Watches and spare parts”.

Malik said that a branch of a foreign company can practice professional activities as well as specified commercial and industrial activities. An approval from the Ministry of Economy is required for undertaking commercial and industrial activities.

A branch of a foreign company is 100 per cent owned by the parent company, operates under the same name and conduct the same business as the managing firm, when they open a branch in Dubai. A branch of foreign company requires a Local Service Agent (LSA), who can be a UAE National or a company owned by one or more UAE Nationals. It must have a manager to represent the company and to open the branch, appointed by the Board of Directors.

A representative office for commercial activities is not a business structure, but is a business activity that a branch can conduct. It has its own criteria, which includes the authorisation to promote and market the parent company's business – but not conduct business operations. A representative office requires a Local Service Agent, who can be a UAE National or a company owned by one or more UAE Nationals.

The Agent's responsibilities towards the company and third parties shall be limited to providing necessary services to the company without he or she bearing any financial liabilities or obligations related to the company or its branches and offices inside and outside the UAE.

On the other hand, a branch of a GCC-based Company must undertake one or all of the activities included in the main company license. For a company with multiple branches, each branch can undertake different activities, as long as they were all included in the original licence of the main company. While other GCC countries may follow different rules in terms of combining activities, for Dubai branch licences, only activities of the same group will be accepted, even if other activities are registered in the GCC main company.

A branch of a GCC-based Company must be 100 per cent owned by the parent company. The trade name of the branch must be identical to that of the parent company. The trade name of the parent company must be changed in case the same name has been previously registered in Dubai by any other person. – TradeArabia News Service