Representative Company
Overview
REPRESENTATIVE OFFICE IN DUBAI - UAE
Under UAE Federal Law No. 2 of 2015 on Commercial Companies, foreign companies, including those wholly owned by non-UAE nationals, can establish a Representative Office in the United Arab Emirates. A Representative Office either acts as a regional administrative office or provides support for the products/services of the parent company in the local market. The Representative Office is not permitted to import such products or do trade. It should be noted that in addition to the above restriction, a Representative Office cannot avail of credit facilities. However, it is permitted to have a bank account to meet its local expenses.
​
WHAT IS THE DIFFERENCE BETWEEN BRANCH OFFICE AND REPRESENTATIVE OFFICE?
The key difference is that the Branch Office can carry out commercial activity in the United Arab Emirates. A Representative Office cannot – it must outsource all business to its parent company. In short, a Representative Office is not allowed to turn a profit. It can however, hold a bank account for its operating expenses. So the cash balance at the end of the financial year will always be negative. This is what sets apart a Representative Office from a Branch Office. A Branch Office, on the other hand, is allowed to do business and turn a profit, or in other words, it could have a positive cash balance at the end of the financial year.
