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Foreign countries may not practice its main business in the state, and may not establish branches unless licensed to do that by the Ministry of Economy after obtaining the approval of the concerned authorities, which license shall specify the business it is licensed to practice, provided that such license may not be issued unless the company has a national agent.
The obligations of the agent towards his company and third parties shall be limited to rendering the services required for the company without holding any responsibility or financial commitment in respect of his company's branch or office business or activity inside the Emirate or abroad.
The representatives offices and branches of the foreign companies shall be the headquarters of its business and its business shall be subject to the provisions of the UAE law.
The main difference between a branch office and a representative office is that a branch office may exercise freely the activities for which it is licensed whereas a representative office may practice only promotional business for the products and services provided by the parent company.
The branch name and activity should be the same of the parent company in the country of origin. The foreign companies and its branches shall have an independent budget, independent profit /loss accounts, and shall have an auditor. If the foreign companies or its branches practiced their business inside the state without carrying out the above mentioned provisions, the persons practicing such business shall be personally and severally responsible for that.