21st August 2019
New foreign branches in Abu Dhabi are now required to declare more information to the Ministry of Economy during their registration. Its essential to be aware of this before starting the registration process in order to avoid delays.
What are foreign branches?
A foreign branch is a fully-owned entity by an overseas company. It isn't an independent legal entity, it is considered part of its parent company. In this way it takes on the same name as its parent company. It is only able to carry out the same service-based activities as its parent company. And, the parent company takes on full responsibility for the Abu Dhabi foreign branch.
What information are foreign branches required to declare?
When new foreign branches are registering in Abu Dhabi, it is necessary for their parent company to submit documents containing the following information:
- Registered Name
- Date of Incorporation
- Legal Form
- Activities for which it is registered
What additional info are new foreign branches now required to declare?
Until recently, the overseas parent company of new foreign branches getting registered in Abu Dhabi was only required to submit notarized and legalized documentation confirming its immediate owner(s). Under the new requirements, the overseas parent company is now required to declare every layer of ownership, including all individuals.
In the instance, owner companies are listed on the stock exchange, then a certificate confirming this is required.
Why do new foreign branches in Abu Dhabi have to declare this new information?
The Ministry of Economy informed us that it is now aligned with the Central Bank and Ministry of Finance and is requiring this additional documentation and information as part of their due diligence requirements and checks.
This additional requirement is the exactly what the UAE banks require when opening a corporate account. However, depending upon which bank a company opts to open its account with depends upon how onerous the document requirements are. Some banks require all of the corporate documents for each company in the layers of ownership (and some also require for them to be notarized and legalized which can potentially be very expensive for more complicated structures, as well as time consuming). Fortunately, the new requirements by the Ministry of Economy aren't quite so onerous - they only require the shareholder information.
If your organisation has already started to register its foreign branch in Abu Dhabi, then please take note of these changes as they will be required in order for your Ministry of Economy Initial Approval and Registration Certificates to be issued.
Alternatively, if your organisation is planning to establish a new foreign branch in Abu Dhabi, then Gateway can supply you with practical advice from on-the-ground experience, manage the process for you and even act as your service agent. By engaging with Gateway you can be assured that your organisation is fully registered and compliant. Email: info@GatewayToAbuDhabi.com
Written by Jenny Hunt, Founding Partner & CEO, Gateway Group of Companies, Abu Dhabi UAE
Protect your business and profits and have an efficient business setup in Abu Dhabi by engaging the award-winning Gateway Group to deliver our customised business setup, corporate local sponsorship, and visa processing. To establish your business in the UAE, Email us: Info@GatewayToAbuDhabi.com
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