Treating a branch as ring-fenced
A branch is legally dependent on its parent. If liability matters, consider a subsidiary instead.
Business setup · Branch and representative office
Open a branch or representative office in the UAE
How a foreign company extends into the UAE, and how a branch differs from a representative office.
Who a branch or representative office suits
Both let an existing foreign company establish a presence in the UAE without forming a new company.
A branch is an extension of an existing local or international company that stays legally dependent on its parent. It can perform the same activities as the parent, as listed in the approval. A representative office is a registered presence that is generally used to promote the parent's business rather than to trade.
- A foreign company with contracts to deliver in the UAE that wants to keep one legal entity.
- A group that wants the parent's name, track record and licences on the UAE presence.
- A company testing the market that wants a lighter step before committing to a subsidiary.
- A free zone company that wants to operate on the mainland through a branch or representative office.
A subsidiary is often the better choice when you want to ring-fence liability, bring in local partners or hold licences separately. Because a branch is dependent on its parent, the parent's finances and exposure come into the decision.
Ownership, name and control
A branch has no separate ownership. The parent owns it, and it operates under the parent's name. Dubai's government portal states that the branch carries the same name as the parent, and the Abu Dhabi Global Market's branch guide requires the same. The documents therefore come from the parent: its incorporation certificate, constitutional documents, a board resolution authorising the branch and the appointment of its manager.
Foreign documents usually need to be notarised and attested before the authority accepts them. The Dubai Development Authority, for example, lists resolutions and powers of attorney attested by the UAE embassy. We confirm the exact attestation chain for your country at the start, because a missing stamp delays everything.
Official pages are not consistent about a local service agent for branches. Some describe one, and the UAE government portal says the obligation for foreign company branches was removed. We confirm the position with the authority before you file.
Approvals and how to register
On the Dubai mainland the route runs through the federal Ministry of Economy and Tourism and the Federal Foreign Companies Committee, and then a trade licence from the Department of Economy and Tourism. The Ministry's initial approval costs AED 3,500 and is valid for four months, which is the window to complete the remaining steps.
After the licence, the branch must be registered with the Ministry within one month. Registration requires a bank guarantee of AED 50,000 and a fee of AED 7,500, and the certificate is valid for one year with annual renewal. Renewal needs audited accounts from an accredited audit office, except for representative offices, and the Ministry lists an administrative fine of AED 100,000 for failing to submit them.
- Ministry initial approval, valid four months
- AED 3,500
- Ministry registration, valid one year
- AED 7,500
- Bank guarantee for registration
- AED 50,000
- Fine for missing annual financial statements
- AED 100,000
Free zones register branches too. The Dubai Development Authority, DMCC and ADGM each accept them, with their own forms and fees. ADGM has also announced that branches of foreign legal persons registered there must maintain beneficial ownership information about their foreign parent. Federal Decree-Law No. 20 of 2025 also lets free zone companies operate on the mainland through a branch or representative office.
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Representative offices, visas and premises
A representative office is recognised in the Commercial Companies Law alongside branches, and the Ministry treats it differently in places: for example, the audited-accounts requirement at registration and renewal does not apply to representative offices. It is generally used for marketing and promotion on behalf of the parent. The exact activities, the visas it may hold and the licence term depend on the authority, and we confirm them for your case before filing.
A branch needs premises that match its licence, with a registered tenancy on the Dubai mainland or the facility required by the free zone. It then follows the same establishment card and visa route as other companies, so plan the office size with your hiring plan.
Tax and VAT treatment
A branch is not a separate taxpayer. The foreign company is taxed on what the branch earns in the UAE.
Under the corporate tax law, a UAE branch of a non-resident person is treated as one and the same taxable person as that company, and the Federal Tax Authority describes it as an extension of the non-resident person. A branch is also a fixed place of business, which creates a permanent establishment. Income attributable to it is taxed at 0% up to AED 375,000 and 9% above.
A branch in a free zone is a free zone person, and it can be a Qualifying Free Zone Person if it meets every condition. The 0% rate then applies to the free zone branch's qualifying income, not to the head office. It must keep adequate substance, meet the de minimis limit and prepare audited statements, as any other free zone company must.
A representative office is different. The tax authority treats it as one kind of office that may create a permanent establishment, and says the answer is fact-specific. An office doing only preparatory or auxiliary work, such as collecting information, does not create one. An office that negotiates or concludes contracts or earns income probably does. We assess what your office will do before you file.
For VAT, a company with several branches does not register each separately. All branches sit under one tax registration number, and the threshold of AED 375,000 is tested for the company's UAE supplies. Whether a representative office with no sales must register is a point we confirm for each case.
Banking
For a foreign entity, the bank collects the company's name, legal form and constitutional documents, the address and the name and address of its legal representative in the UAE, and it identifies every person owning or controlling 25% or more. It relies on certified documents, so attested parent documents matter here too.
Banks can decline or close accounts when the story is unclear. A branch should be ready to show the parent's financial standing, the UAE contracts it expects and who controls the parent. We do not promise a result or a timeline.
Costs
Government fees are published, and the rest depends on the authority, the office and the people.
- The Ministry initial approval and registration fees, and the bank guarantee, shown above.
- The trade licence from the Department of Economy and Tourism or the free zone authority.
- Attestation and translation of the parent's documents.
- The office lease or facility, and the establishment card and visas.
- Audited accounts for the branch at each renewal, except for representative offices.
- Corporate tax and VAT work for the branch and the parent's UAE position.
Branch licence
Get a quote
Depends on authority and activity.
Representative office
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Depends on authority and scope.
Corporate tax registration
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Our fee, quoted per case.
What you must keep doing
- Renew the Ministry registration and the licence every year.
- Submit audited accounts from an accredited audit office with each renewal, unless it is a representative office.
- Keep the branch's accounting records, and file the parent's UAE tax position within 9 months of each period.
- Keep the beneficial owner information up to date, and record changes within 15 days.
- Register for VAT when the threshold is reached, and file within 28 days of each period.
Common mistakes
Overlooking the permanent establishment
The foreign company is taxed on branch profit. Model that before the branch opens, not after the first return.
Letting a representative office sell
A representative office is not set up to trade. Selling through it can breach its licence and create a permanent establishment.
Budgeting for the licence only
The guarantee, registration, attestation and yearly audit are real costs. Missing the accounts at renewal carries a fine.
A worked example
Illustrative example, not a client
A European engineering firm delivering a UAE contract
A European engineering firm has won a multi-year contract in Dubai. It wants to keep the contract in its own name and avoid forming a new company for a single project.
A mainland branch fits. We prepare the attested parent documents and the board resolution, secure the Ministry approval and licence, take a tenancy that matches the visa plan and lodge the bank guarantee.
The tax work is as important as the licence. The branch creates a permanent establishment, so the parent is taxed on the branch's profit, and we model that against the contract margin. We register the branch for tax, plan VAT, arrange the audit for renewal and explain from the start that the branch is legally dependent on the parent.
Frequently asked questions
What is the difference between a branch and a representative office?
A branch is an extension of the parent that can perform the activities in its approval. A representative office is a registered presence that is generally used to promote the parent's business rather than to trade, and its scope must be confirmed with the authority.
Is a branch a separate legal entity?
No. A branch remains legally dependent on its parent, which carries the same name. For tax, the branch and the foreign company are treated as one taxable person.
What approvals does a mainland branch in Dubai need?
Approvals from the Ministry of Economy and Tourism and the Federal Foreign Companies Committee, then a trade licence from the Department of Economy and Tourism. After the licence, the branch registers with the Ministry within one month.
What does the Ministry charge?
Initial approval is AED 3,500 and valid for four months. Registration is AED 7,500 with a bank guarantee of AED 50,000, and the certificate is valid for one year.
Does a branch have to be audited?
The Ministry requires audited accounts from an accredited audit office when a branch renews, except for representative offices. It lists a fine of AED 100,000 for not submitting annual financial statements.
Will the foreign company pay UAE corporate tax on the branch?
Yes, on income attributable to the branch. The branch and the foreign company are one taxable person, and the rates are 0% up to AED 375,000 and 9% above, unless a free zone branch qualifies for the 0% rate on qualifying income.
Does a representative office create a permanent establishment?
It depends on what the office does. Preparatory or auxiliary work, such as collecting information, does not. An office that negotiates or concludes contracts or earns income probably does. We assess your case before you file.
Can a free zone company operate on the mainland through a branch?
Yes. Federal Decree-Law No. 20 of 2025 covers branches and representative offices of free zone companies operating on the mainland, and in Dubai the Department of Economy and Tourism can license a branch of a free zone company.
General information based on UAE rules at the time of writing. It is not tax or legal advice for your situation. Speak to us before you decide.
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