If you are starting your first business in the United Arab Emirates (UAE), you should know that it is one of the places on Earth where starting a company is a task in itself. In a recent World Bank survey, the UAE was ranked position 33. This means that starting a business in any of the countries isn’t easy, especially if it’s your first time. The single main reason why starting a business in the UAE is the complex process put in place by the Government and strict measures in place for business licences. If you are planning to start your business in the UAE, here are some facts that you need to know before you proceed.
Representative or Branch Office of Your Business in the UAE
One of the ways any company can retain full foreign ownership in the UAE is by opening a representative or branch office. Such an office won’t have a separate legal identity because it is regarded as an extension of a foreign company.
Branch offices can participate in commercial activities and make profits in the UAE. Although the branch office is licenced for the purpose set out in its commercial licence, it can only engage in similar activities to those that are carried out by the foreign company under its home jurisdiction. On the other hand, a representative office isn’t authorized to make profits within the United Arab Emirates, and the commercial activities that it may engage in are limited to promotional and marketing its foreign parent company services and products.
Representative and branch offices have similar features because both function under the authority of a commercial licence and registration in the name of the parent company. Both of them are also required to hire a local representative agent who must be a United Arab Emirates citizen. Therefore, the process of starting either a branch or representative office in UAE is similar.
Steps on How to Register Your Business in UAE
1. Hire a Local Service Agent
One of the most important features of a representative or branch office is that they are both required to engage a local service agent (LSA). The LSA should be from a company that is wholly owned by the UAE or is a UAE national. The LSA doesn’t take part in the operations, ownership, or management of the representative or branch office. The role of the LSA is only limited to administrative roles, for instance, obtaining permits, licences, and visas among others in exchange for a small fee. The appointment of the LSA is done through a written agreement, and it has to be signed by all the parties before an attorney.
2. Reserving Your Trade Name and Initial Approval
The application should first be made to the Emirate’s Department of Economic Development to reserve a trade name and for the approval of the planned representative or branch office registration.
3. Submit Application to the Ministry of Economy
After the approval of the 2nd step, the next major step is to submit your application to the Ministry of Economy (MOE), as stipulated by the UAE Commercial Companies Law in Article 314.
You need to fill the application form with the full details of the parent company of the representative or office branch. This includes the head office, share capital, home jurisdiction, and overseas activities. You also have to include the nature of your intended activities in the UAE. Remember that your proposed activities should be similar with those in the home jurisdiction. You have to also include the name of the general manager to work in the UAE office. You have to accompany the application form with the prescribed documents, which can include:
- The initial approval and trade name reservation certificate
- Two years audited accounts of the mother company
- The authorization by the board to open a branch or a representative office, appointment of the general manager and a confirmation that the company will accept any liabilities of the office after it has been set up in the UAE
- A copy of the company agreement with the LSA, and their identification numbers
- A statement describing all the activities of the main activities and operations of the company
- Submit corporate documents including memorandum, certificate of incorporation, a certificate of good standing from the parent company, and articles of association
- Provide proof of the power of attorney that should be in favor of the general manager and also a copy of the general managers’ passport.
The Ministry Of Economy (MOE) will then provide you with their approval, and at this point, you will be required to submit additional documents in hard copy. These documents include:
- Approval by the MOE
- Application documents
- The parent company certificate of incorporation
- A local UAE bank deposit bank account
Even after getting approved by the MOE to set up your branch or representative office, you cannot start working until you complete the following steps.
4. Contact the Department of Economic Development to obtain your Licence
After getting approved by the MOE, it will then issue an official approval either to the Dubai or Abu Dhabi Departments of Economic Development, also known as the DED. After the DED has received your application, you will be required to make another application to them. Apply by submitting similar documents that you submitted to the MOE. However, you will also be required to include the location and projected office address in the UAE. The DED will issue you with a commercial licence after verifying all the information. The licence is valid for only one year, but it is renewable on an annual basis.
5. Complete the Administrative Tasks
Once you have received the commercial licence from the DED, you can now enter into the projected office space, open a bank account and labor cards and visas for your employees.
6. Become a Member of the Chamber of Commerce
The last step is for you to register as a member of the Dubai or Abu Dhabi Chamber of Commerce and Industry. For you to successfully register as a member of the chamber of commerce and industry, you have to provide copies of office lease agreement, commercial licence, and passport copies of all signatories of the business.
Depending on the type of business you want to conduct in the UAE, most foreign investors often prefer to deal with people who they can create a good business relationship with. Interpersonal skills and communication are considered paramount, as well as being enthusiastic about a service or product. Because Arabic is the main language in the UAE, it is spoken by almost the entire population. Although English is spoken in some business environs, learning the local language basics will greatly assist you to create a positive attitude towards your business.
It isn’t advisable to wait until you’re in the UAE to learn the language. However, you can familiarize yourself with an experienced tongue before you move abroad. This will give you the confidence to interact with potential clients and business associates.
Translation and Interpretation
If you don’t have the time to learn the language, you can opt to hire an interpreter. While conducting business in the UAE, you will most likely need the help of a translator at one point. Also, depending on who you are interacting with, you may require an interpreter during your formal meetings and negotiations. This will eliminate even the slightest chance of miscommunication or misinterpretation. Knowledge of Arabic Language can mean the difference between a calamity and a deal clincher. Therefore, it is advisable to hire an experienced translator. Hiring a reputable Arabic interpreter can also help you to advertise and market your business products or services. They can assist you to avoid grammatical and cultural faux pas that can be detrimental to your business.
During the process of setting up your business overseas to sell your products and services, you will need a professional translation service to be able to understand what’s being said and also enable you to make money. When setting up your business in the UAE, you will have to interact with accountants, lawyers, and design agencies among several others. Therefore, at this point, you will require translation services.
Why You Need Translation Services
Most people perceive translation as an afterthought while it should be at the forefront of your business. The money, time, and attention that you have spent in developing your brand and business shouldn’t be wasted due to poor translation. Poor translation has been found to have a lasting effect on the overall performance and profitability of any business. This is because poor or ambiguous information can lead to dissatisfaction from both suppliers and vendors due to materials having to be re-written. This can lead to calls and complaints to your customer service all because of misinterpreted information.
A foreign tongue will help you to avoid some of the common pitfalls and mistakes, and also provide you with substantial and added value to your business brand by giving you sound advice on the cultural nuances of your business marketing campaigns. This will help you to engage your audience in the UAE to the full and to maximize your potentiality in the new market.
Other than helping you to set up your business in the UAE, you will require professional translators as your business expands. These professionals will coordinate your marketing campaigns. A foreign tongue is skilled and qualified in linguistics in the commercial sector and can help you by providing you with translation services wherever and whenever you need them. By outsourcing your translation needs, you will be able to manage and deliver before time by freeing up your resources and staff to focus more on managing your business.
How Does Business Translation Work?
Using a foreign tongue to produce and manage your translation is more efficient, and it eliminates risks of losing profits in both short and long-term. A professional linguistic isn’t only fluent in the mother tongue but is also experienced in commercial activities. Therefore, when you need your business contracts, technical manuals, and marketing materials translated, ensure that you consult only qualified language experts who have years of experience in similar market sectors like yours.