The Emirate of Ajman is one of the seven Emirates that constitute the UAE. It has world-class infrastructure, excellent logistics facilities, flexible legal framework, pro-business initiatives, and various tax incentives to offer to its businesses. Combined with proximity to Dubai and Sharjah, easy access to ports and international airports, Ajman offers entrepreneurs, SMEs, and conglomerates a hub supporting highly lucrative investments.
Setting up a new branch of business is one thing that people in business conduct in the Emirates. More often than not, business owners carry out business incorporation in Ajman and expand into the free zones to do business there.
Branch Office Formation in Ajman
Under a branch office, the parent company can set up another entity that is registered to that state or country and under its jurisdictions but is still regarded as part of the aforementioned parent company. The ownership still belongs to the parent company of the branch that must be licensed with the same name and activity.
There are two main types of branch offices. They are -
- Branch of a Local Company
- Branch of a Foreign Company
Branch of a Local Company
Businesses located in one of the Emirates of the state and wishing to open branches in other Emirates may do this, given that they comply with the company law when registered in the desired company (Commercial and Industrial Companies). Besides, civil companies may open branches for them. They also are expected to meet the license conditions in the concerned Emirate, such as approval of the activity if the activity needs external approvals.
Branch of a Foreign Company
Any company located in Arab or Foreign Countries (Except for GCC countries). And they are dealt with as follows:
- Companies practising professional activities to be registered directly at the department without the need for registration in the Ministry of Economy granted that they have a local service agent.
- Companies wanting to open a representation office need to register at the Ministry of Economy first then complete the procedures at the department, taking into consideration giving such companies the brand name and initial approval then return to the Ministry of Economy.
- Whereas companies exercising commercial activities such as contracting activities, they should have the initial approval and the business name and then return to the municipality to take the technical committee's permission. Then attend to the Ministry of Economy.
Conditions to Open a Branch Office in Ajman
- Except for foreign businesses operating under special licenses within duty-free areas in the state, foreign companies must not practice their main activities or establish offices or branches thereof until a license to this effect is received from the Ministry after prior approval of the Concerned Authority had been obtained. The issued permit must specify the activity which a company is authorized to carry out. Such license must be issued if the company engages an agent to be a natural person holding the state nationality or a company wholly owned by natural citizens, and whose entire partners be nationals too.
- The agent's responsibilities to its company and third parties will be limited to rendering essential services to the company without his or her bearing any financial obligations or liabilities related to the company or its office and branches inside and outside the country.
- A foreign organization or its offices or branches referred to in the preceding Article must not commence their activities in the country except after entry in the Register of foreign companies in the Ministry of Economy.
- The Foreign Company's branches or offices must be governed by the laws applied within the state concerning their activities in the state.
- They shall have a separate profit a-and loss account, a separate balance-sheet, and must appoint auditors.
- If a foreign company or its branch or office assumes activities in the state before effecting the processes defined in the preceding Article, the persons who believed such activity should be severally and jointly liable therefor.
Procedure to Open a Branch Office in Ajman
The steps to register a branch office in Ajman are -
- Appoint a local service agent who shall be a UAE national
- Reserve a business name for the branch office at the Ajman Department of Economic Development (DED)
- Apply for an initial approval with the Ministry
- Finalize an office space for the branch
- Apply for a license and ay fees
How can we help?
To complete all these steps and processes, if one needs a helping hand from an expert in branch office formation, we at Commitbiz will provide you with all the assistance. Our business setup consultants will guide you step by step to make important business-related decisions and also make you aware of the complete procedures for incorporating your business. Contact us today.