Setting up the Branch of a Foreign Company in the UAE
Opening a foreign branch in the UAE is a strategic decision for foreign companies, since they can benefit from a dynamic business climate, low taxes and tariffs policies, and competitive operating costs. As a man who’s fought his way through the pitfalls of business setup in Dubai, I can share that it’s a simple process when you know what to do. Eye on the thriving Dubai economy or the larger MENA market, a branch of a foreign company in Dubai is a business organization that provides 100% ownership, tax advantages, and, if the right groundwork is laid, a branch can be registered in one of the strategic locations in Dubai. But how do you get started?
What Is a Foreign Branch Office in the UAE?
A Foreign Branch in the UAE is a legal extension of the parent company incorporated outside the UAE with the same name and the same business activities. It’s not a distinct legal entity, the way a subsidiary is, so the parent continues to be fully liable (and in control). This structure enables UAE-based foreign companies to do business and make profits in Dubai and hold 100% shareholding. For instance, a British tech company can set up a branch of a foreign company in Dubai to provide the same software services that its headquarters does.
Key Features:
- Subordinate to the parent company shall bear full responsibility for liability and operations.
- No minimum capital requirement, which other structures.
- A local service agent (a UAE national or a company owned by a UAE national) will be required for mainland branches.
- Need to be under the registered office address in the UAE.
A branch office conducts the same commercial activities Dubai as the parent company, while a representative office is limited to direct sales restriction activities like marketing or market research.
Why Choose the UAE for Your Foreign Branch Office?
Dubai isn’t just about sunshine; it also makes setting up a new office super easy. Here’s why so many firms jump at the chance to start in the UAE:
- Friendly tax rules: Most companies pay zero corporate or personal income tax, so almost every earned dirham stays with you.
- Prime location: The UAE sits between Europe, Asia, and Africa, acting as a fast launch pad into the wider MENA and GCC markets.
- Full ownership: A foreign branch in Dubai lets you keep 100 per cent control-no local partner is needed to hold any shares.
- Quick paperwork: The Ministry of Economy & Tourism and DED have cleaned up the forms, so opening a branch usually takes only weeks.
- Zone perks: Free areas like DMCC or JAFZA offer tools, permits, and networks aimed straight at tech, finance, or logistics firms.
For instance, a colleague’s logistics company set up a branch in Dubai mainland company to leverage the UAE business ecosystem. Within months, they accessed new clients in the Gulf region market thanks to Dubai’s connectivity. Its tax system UAE, infrastructure, and strategic location Dubai make it a hub for business expansion UAE.
Mainland vs. Free Zone: Which Is Best for Your Branch?
Mainland Branch:
- Pros: You can sell directly to anyone in the UAE, enter government bids, and set up shops or offices pretty much anywhere in the country.
- Cons: A local partner still needs to back you (without taking shares), start-up bills are steeper, and each industry faces its own rules.
- Best For: Firms aiming at everyday UAE customers or planning a high-traffic store, like retail shops or consulting centres.
Free Zone Branch:
- Pros: You enjoy full tax breaks, paperwork moves faster, and many zones offer gear and services aimed at your trade, like DMCC for import-export or JAFZA for shipping.
- Cons: Selling inside the UAE can only happen through a local dealer, so most sales stay inside the zone or go overseas.
- Best For: Importers, exporters, or firms that want to run their office with little red tape and gain almost total management control.
Step-by-Step Guide to Set Up a Foreign Branch Office in the UAE
Step 1: Appoint a Local Service Agent
When establishing a branch in the UAE mainland, appointing a local service agent-a UAE citizen or wholly UAE-owned firm-is mandatory. This agent helps reserve the trade name, interfaces with the Department of Economic Development, and handles a few routine tasks, yet he holds no shares or executive control. Branches set up in free zones do not require this arrangement.
Step 2: Obtain Initial Approval from the Ministry of Economy
Next, file your request through the Ministries’ online portal, attaching the following:
- A summary of the parent company, including its head-office location, main activities, and subscribed capital.
- A concise UAE business plan showing projected operations and financial trends.
- Once cleared, MOE grants an initial approval valid for four months, enough time to tackle the remaining steps in parallel.
Step 3: Secure a Trade Licence from the DED
With the MOE green light in hand, turn to the Dubai or Abu Dhabi DED to secure your commercial licence. Renewed yearly, the licence mirrors the parent county’s scope of work. Required documents usually include,
- Certified copies of the following documents for the parent company, issued from the home jurisdiction: Certificate of incorporation and memorandum of association. A Tawtheeq lease agreement if the office is in Abu Dhabi, or an Ejari lease if the office is in Dubai.
- An engagement letter from a UAE-based auditor, together with consolidated financial statements for the parent company and its ultimate beneficial owners, covering the most recent two years.
Step 4: Arrange Office Space and Legal Requirements
Obtain a registered office address, either a conventional office or a flexi-desk arrangement in a Dubai free zone. All corporate documents must also meet these standards:
- Be notarised in the parent company’s country of origin;
- Then attested by the UAE embassy in that country and by the UAE Ministry of Foreign Affairs;
- And, where applicable, translated into Arabic by a translator certified by the UAE Ministry of Justice.
Step 5: Complete MOE Registration and Bank Guarantee
Register with the Ministry of Economy online within one month of the UAE trade licence issuance. A refundable bank guarantee of AED 50,000 must be deposited at that time and is retained for the duration of the licence. Late registration incurs a fine of AED 10,000, which is capped at AED 10,000 each year.
- The office must appoint a local auditor to prepare either a stand-alone balance sheet for the UAE branch or a combined balance sheet covering multiple branches.
Step 6: Secure Employment Visas and a Corporate Bank Account
First, obtain an establishment card and pay any labour-card fees to activate either the employment visa or the investor-residence visa. If pursuing the UAE Golden Visa, confirm that you meet all current criteria, including the required investment level. check specific requirements (e.g., investment thresholds). Open a corporate bank account with parent company UBO details and attested documents.
Documents Required for Foreign Branch Office Registration
To register a foreign branch office smoothly, collect these notarised papers:
- Copy of the parent company’s certificate of incorporation.
- Memorandum and articles of association.
- Recent good-standing certificate, no older than one month.
- Board resolution approving the branch and naming the general manager.
- Manager’s passport copy and proof of home address.
- Reference letter from the parent company’s bank.
- Proof of financial health-two years of audited statements.
- Certificate of incumbency listing current directors and officers.
- Written consent for the registered office address-Ejari lease or rental contract.
All documents must undergo UAE embassy attestation, notarization process UAE, and Arabic translation documents by the Ministry of Justice UAE and Ministry of Foreign Affairs UAE.
Costs of Setting Up a Foreign Branch Office in the UAE
Mainland Branch Costs
| Item | Fee Tenure | Amount (AED) |
| Initial Approval Fees | One-Time | 120 |
| Name Approval Fees | One-Time | 620 |
| Tasheel Fees | One-Time | 500 |
| Notary Verification Fees | One-Time | 350 |
| MOA/LSA-Notary Fees | One-Time | 1,000 |
| Licence Fees | Annual | ~10,000 |
| Immigration Card Fees | Annual | 750 |
| Company Stamp | One-Time | 100 |
| Labour Card Fees | One-Time | 1,000 |
| MOE Fees | Annual | 13,500 |
| Local Sponsor Fees | Annual | ~10,000 |
| Corporate Service Fees | One-Time | ~5,000 |
| Office Rent | Annual | Varies (e.g., 20,000-50,000) |
| MOE Refundable Deposit | One-Time | 50,000 |
| Document Attestation & Translation | One-Time | ~6,000 |
| Total (Approximate) | 98,940+ |
Free Zone Branch Costs
| Item | Fee Tenure | Amount (AED) |
| Licence & Registration Fees | Annual | ~32,500 |
| Name Approval Fees | One-Time | 620 |
| Immigration Card Fees | Annual | 2,000 |
| Company Stamp | One-Time | 100 |
| Corporate Service Fees | One-Time | ~10,000 |
| Office Rent | Annual | Varies (e.g., 10,000-30,000) |
| Document Attestation & Translation | One-Time | ~6,000 |
| Total (Approximate) | 51,220+ |
How Long Does the UAE Branch Office Setup Take?
The UAE branch office setup timeline typically spans 4-8 weeks, depending on the jurisdiction and document preparation.
- Attestation process UAE: 2-4 weeks for notarised documents, UAE and Arabic translation documents.
- Initial approval UAE: 7-10 working days via the MoET registration process.
- Trade licence issuance: 1-2 weeks after document submission.
- MOE registration process: 1-2 weeks, with a one-month deadline to avoid fines.
- Visa and bank account setup: 1-3 weeks, depending on UAE labour laws compliance.
Post-Setup Compliance for UAE Branch Offices
After setup, ongoing post-setup compliance for UAE branch office includes:
- Commercial licence renewal: Annually with updated financial statements.
- Corporate auditing UAE: Appoint a local auditor UAE to submit a balance sheet UAE or combined balance sheet for multiple branches.
- Bank guarantee deposit: Maintain AED 50,000 with the Ministry of Economy.
- UAE labour laws: Ensure compliance for employment visas UAE and labour card fees.
- Tax implications: While the UAE offers tax-free business, consult a business setup consultant in Dubai for parent company liability reporting in the home country.
Benefits of a Foreign Branch Office in the UAE
A foreign branch office in Dubai offers:
- 100% ownership: Full management control Dubai and financial control UAE.
- MENA market entry: Access to the Gulf region market via a strategic location Dubai.
- No capital requirement: Unlike LLCs, branches need no initial capital.
- Free zone tax exemptions: Significant savings in free zones like DMCC or JAFZA.
- Simple administrative process: Streamlined via DED and MoET approval.
These include favorable tax system, industry-specific resources, and business expansion UAE opportunities.
Common Challenges and How to Overcome Them
Setting up a branch of a foreign company in Dubai isn’t without hurdles. Here’s how to tackle them:
- Challenge: Delays in attestation process UAE.
Solution: Start notarization process UAE early and work with PRO services for efficiency. - Challenge: Choosing the right local sponsor UAE.
Solution: Select a reputable UAE national agent with experience in your industry. - Challenge: Navigating sector compliance UAE.
Solution: Consult a business setup consultant in Dubai for industry-specific guidance.
Frequently Asked Questions About UAE Branch Office Setup
Q1: What documents are needed for foreign branch registration in UAE?
See the “Documents Required” section above for a detailed list, including certificate of incorporation and board resolution branch.
Q2: How long does it take to set up a branch office in UAE?
The process takes 4-8 weeks, depending on attestation and approval timelines .
Q3: What are the best free zones for foreign branch office UAE?
DMCC, JAFZA, and Dubai South are top choices for their industry-specific resources and free zone tax exemptions.
Q4: What is the cost of setting up a foreign branch in UAE?
Mainland costs start at ~AED 98,940, while free zone costs are ~AED 51,220 .
Q5: What is the difference between a branch office and a representative office?
A branch office conducts commercial activities Dubai, while a representative office focuses on direct sales restriction activities like marketing.
Conclusion: Start Your UAE Branch Office Journey Today
Opening a branch office in the UAE places your firm at the heart of the MENA and wider Gulf Cooperation Council markets. The emirate welcomes foreign firms with full ownership, a low corporate tax framework, and an orderly application pathway that streamlines Dubai business setup. By naming a local service agent, obtaining a UAE trade licence, and fulfilling Ministry of Economy registration, you can launch your Dubai branch with impressive speed. Engage a professional pro services team to navigate vital attestations and weigh mainland against free-zone registration to match your long-term objectives.
