Dubai has evolved as one of the most preferred global hubs for international business expansion. With its strategic location, business-friendly policies, modern and vast infrastructure and numerous tax benefits, Dubai offers great opportunities for foreign companies looking to grow and expand in the Middle East. Among the various setup options, setting up a branch office in Dubai is one of the easiest and most effective ways for companies to enter and expand in the UAE market.
A branch office allows a foreign company to operate and manage its business in Dubai while retaining 100% ownership. It can easily carry out the same commercial activities as the parent company and is considered its legal extension and expansion. If your organization aims to explore and expand into the UAE market without setting up any new legal entity, a branch office could be the ideal structure for it.
This comprehensive guide explains what a branch office is, eligibility, documents required, approvals, step-by-step registration process, costs involved, benefits and other essential aspects every business owner should know.
This comprehensive guide explains what a branch office is, eligibility, documents required, approvals, step-by-step registration process, costs involved, benefits and other essential aspects every business owner should know.
What is a Branch Office in Dubai?
A branch office is an extension of a foreign parent company registered outside the UAE. It does not have a separate legal identity and is fully owned by the parent company. The branch can:
- Conduct activities identical to the parent company
- Generate revenue within the UAE
- Enter contracts, hire employees and sign agreements on behalf of the parent entity
- Import and export goods and services
- Promote and represent the overseas company in the UAE
However, a UAE branch cannot conduct any activity not permitted by the parent company’s license and generally cannot trade physical goods unless a commercial activity permit is obtained.
Why Start a Branch Office in Dubai? Key Advantages
Establishing a branch office in the UAE offers multiple benefits:
1. 100% Foreign Ownership
Unlike LLCs that previously required a local partner, a branch office allows complete foreign ownership under the parent company.
2. Full Control Over Operations
All business decisions remain with the parent entity, ensuring consistent quality, branding and management.
3. Access to UAE & GCC Markets
Dubai serves as a global business gateway, allowing companies to expand across the Middle East, Africa and South Asia.
4. Tax-Friendly Regime
The UAE offers: –
- 0% personal income tax
- 9% corporate tax (applicable above the AED 375,000 threshold)
- Free zone tax benefits for eligible businesses
5. No Minimum Capital Requirement
Unlike a subsidiary, a branch office does not require proof of paid-up capital.
6. International Credibility
A branch office enhances brand visibility, strengthens customer trust and makes it easier to enter contracts with government and private entities.
Types of Branch Offices in Dubai
Foreign companies can set up different types of branch operations, depending on their business nature:
- Foreign Company Branch: A direct extension of a company registered outside the UAE.
- Free Zone Branch: A branch of a foreign or UAE company located within a free zone. These can only operate inside the free zone or internationally.
- UAE Company Branch: A branch opened by a mainland company in another emirate or location.
- Representative Office: A non-commercial entity used for marketing and promotional activities. It cannot generate revenue.
Documents Required to Open a Branch Office in Dubai
The following documents are typically required:
- Parent company’s certificate of incorporation
- Memorandum & Articles of Association
- Board resolution approving the Dubai branch setup
- Power of attorney in favour of the local manager
- Passport copies of directors/shareholders
- Audited financial statements of parent company (last 2 years)
- Proposed business activities and business plan
- Passport copy and visa details of branch manager
- Office lease agreement (Ejari) after initial approval
- Notarized and attested documents (by UAE Embassy and MOFA)
Note: Requirements may vary depending on the activity, free zone or mainland authority.
Step-by-Step Process to Start a Branch Office in Dubai
Here is a clear, simplified roadmap to registering your branch office: –
Step 1: Choose Mainland or Free Zone
Mainland branch office
- Regulated by the Dubai Department of Economy & Tourism (DET)
- Can operate anywhere in the UAE
- Suitable for companies with a wide market reach
Free zone branch office
- Regulated by the respective free zone authority
- Enjoys tax benefits and simplified compliance
- Ideal for companies offering digital, consulting, IT, trading or service activities.
Step 2: Appoint a Local Service Agent (for Mainland Only)
A Local Service Agent (LSA) is a UAE national who assists with licensing but does not hold shares or control the company. The LSA agreement must be notarized.
Free zone branches do not need an LSA.
Step 3: Apply for Initial Approval
Submit the required documents to DET (mainland) or to the free zone authority. Initial approval confirms that:
- Business activities are permissible
- The branch can operate in Dubai
- The parent company has authorization to expand
Step 4: Obtain the Ministry of Economy (MOE) Approval (for Mainland)
Foreign branch offices must be registered with the Ministry of Economy. You will need to pay MOE fees and submit all notarized documents.
Step 5: Finalize Office Space & Ejari
A physical office or flexi-desk setup is required. The lease agreement must be registered with Ejari (mainland) or the free zone authority…!
Step 6: Acquire the Trade License
After all approvals, DET or the free zone issues the Branch Office Trade License. This allows the company to legally operate, open a bank account and begin commercial activity.
Step 7: Register with Additional Authorities (If Applicable)
Depending on your industry, approvals may be required from:
- Dubai Municipality
- Dubai Health Authority
- Telecommunications & Digital Government Regulatory Authority
- Central Bank (for financial institutions)
- Dubai Customs (for import/export)
Conclusion
Setting up a branch office in Dubai is one of the most efficient and effective ways for foreign companies to enter the UAE market. With complete ownership, fewer restrictions, strong legal protection and access to a thriving business ecosystem, Dubai provides an ideal platform for global companies seeking expansion.
By following the prescribed procedures, choosing the right jurisdiction, obtaining approvals, submitting the required documents and meeting compliance standards, you can successfully launch your branch office and begin operations in a smooth and proper manner.
If done correctly, a branch office can significantly enhance your brand presence, increase revenue possibilities and open doors to new markets across the GCC and beyond.
