UNITED ARAB EMIRATES
Timing
Once the application forms have been completed, the UAE central bank process can take between six to eight months to be finalised and requires lobbying by the institution to assist the process;
Nature of activities that may be undertaken by the representative office

  • Representing the licensed financial establishment in conducting business inside the country, including contacts with relevant parties as well as promoting its services in the local market.
  • Providing its Head Office with information regarding the economic developments in the country.
  • Providing its customers with information regarding the local market.
  • Providing information to any local party which intends to develop its activities in countries where the licensed financial establishment operates.
  • Providing customers with banking, financial and investment consultation services.

Specific conditions / restrictions pertaining to set up of a Representative Office

A foreign Bank or financial services establishment setting up in the UAE is required to:

  • Be a bank or another financial establishment incorporated outside the UAE, authorised and directly subject to the supervision and examination of the regulatory authority in the country of origin;
  • Have completed a period of no less than ten (10) continuous years of conducting business in the country of origin; and
  • Have a minimum capital of AED 183.7 million; (approx. US$50 million)
  • Appoint a person to manage the Representative Office who should be characterised by good conduct and behavior. He should as well be properly qualified, theoretically and practically, in the areas of banking and financial business, as determined by the Central Bank.

Application and Licensing Costs

The Application form is easy and quick to complete. The Central Bank does not charge any amounts, however, the Department of Economic Development charges 5% of the leased premises amount plus between AED5,000 – 8,000 (approx US$1,350 – 2,150) registration fees.

Sponsorship Requirements

Central Bank will assume the role of local sponsor for the Representative Office. No additional requirements in this regard

Location of Office

Representative Offices may be set up in any of the seven emirates forming the UAE (Abu Dhabi, Dubai, Sharjah, Ajman, Um Al Quwain, RAK, Fujairah).

DUBAI INTERNATIONAL FINANCIAL CENTRE

Timing

Once the Application forms have been completed, the DFSA process takes approximately eight weeks to complete; this is a formal process – no lobbying is possible.
Nature of Activities that may be undertaken by the Representative Office

  • A Representative Office may only represent itself and other Group companies.
  • The activities permitted are the marketing only of financial products and services offered by its Head Office or a member of the Group located outside the DIFC. In this context, "marketing" means providing information, engaging in promotions and making introductions or referrals in relation to financial products or services.
  • Engaging in unregulated activities, such as economic research or gathering financial, economic or commercial information.
  • A Representative Office must ensure that its activities do not inadvertently or otherwise constitute the DFSA Category 4 financial service activity of "advising on Financial Products or Credit" or receiving and transmitting orders in relation to a financial product.
  • A Representative Office, once authorised, may apply to vary the scope of their licence to undertake other financial services activities, subject to the usual approval process by the DFSA.

Specific conditions / restrictions pertaining to set up of a Representative Office

  • A Representative Office applicant must be a branch of a financial institution regulated in another jurisdiction;
  • A letter of "no objection" must be provided from the Home State Regulator to the establishment of a Representative Office in the DIFC;
  • Simple solvency requirements must be met;
  • A Representative Office must appoint a Principal Representative - this is not a licensed function but the Principal Representative must pass a Fit and Proper test and be resident in the UAE.
  • A Representative Office may not act as agent for any person outside its Group companies.
  • A Representative Office, unlike other categories of DFSA authorised or registered firms, is not allowed to have clients. As a consequence much of the DFSA Rulebook is disapplied for Representative Offices but note that compliance with AML/CTF rules and UN sanctions is mandatory. Existing authorised firms have the option to vary their license to operate as a Representative Office but they would not be allowed to undertake any other Financial Service.

Application and Licensing Costs

The Application forms are short and straightforward to complete.

The application costs for the Representative Office for the initial year is as follows

Fees to the DFSA:

  • The initial application fee is US$2000 and annual fee payable thereafter is US$4000.

Fees to the DIFC:

  • Registration of the Representative Office with DIFC Registrar of Companies: US$8,000
  • Commercial license fees: US$12,000 (to be renewed yearly for the same amount)
  • Ongoing rental fees for minimum space required by DIFC Authority
  • Setting up miscellaneous fees e.g. fitting out and visa and sponsorship by the DIFC.

Sponsorship Requirements

No requirement for local sponsor. DIFC Representative Offices may have 100% foreign ownership.

Location of Office

Restricted to DIFC financial free zone.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.