How to Set Up a Subsidiary of a Foreign Company in a UAE Free Zone 2026
Foreign companies can establish UAE free zone subsidiaries. Here is the complete 2026 guide on setting up a subsidiary or branch office in a UAE free zone.
In this guide:
Subsidiary vs Branch Office — Key Difference
- Subsidiary: A separate legal entity from the parent; the parent is a shareholder; subsidiary has its own liability
- Branch office: An extension of the parent; not a separate legal entity; parent company bears full liability
- For most foreign companies: Subsidiary preferred (limits parent liability)
Requirements for Incorporating a Subsidiary
- Parent company documents: Certificate of Incorporation; Memorandum and Articles of Association; Certificate of Good Standing
- Board resolution: Parent company board resolution authorizing UAE subsidiary formation
- Apostille: All parent company documents typically require apostille for UAE use
- Local manager: Some free zones require a local manager/authorized signatory to be based in UAE
Step-by-Step Process
- Step 1: Choose free zone suitable for your industry
- Step 2: Prepare all parent company documents (apostilled)
- Step 3: Submit subsidiary incorporation application with chosen free zone
- Step 4: Free zone reviews and issues Memorandum of Association for subsidiary
- Step 5: Pay incorporation and first-year licence fee
- Step 6: Receive subsidiary trade licence and MOA
- Step 7: Open UAE bank account for subsidiary
Tax Considerations
- UAE CT: Subsidiary is a separate UAE taxable person; files UAE CT return independently
- Transfer pricing: Transactions between parent and subsidiary must be at arm length for CT purposes