How to Set Up a UAE Branch Office of a Foreign Company Guide 2026
Foreign companies can open a UAE branch office without setting up a new UAE legal entity. A UAE branch office is an extension of the parent company, not a separate legal person. This guide covers how to set up a UAE branch office in 2026.
In this guide:
UAE Branch Office vs Subsidiary — Key Difference
- Branch office: an extension of the foreign parent company; the parent company is legally responsible for all branch obligations; the branch does not have separate legal personality; the parent company’s financial statements consolidate the branch
- Subsidiary (free zone or mainland company): a separate UAE legal entity; owned by the parent but legally distinct; the parent’s liability is limited to its investment; subsidiary files its own UAE Corporate Tax return
- When to choose branch: when you want to present your company name directly in UAE (not a new local entity name); when liability structure preferences the parent bearing risk; when regulatory approval for the parent company is easier to obtain than for a new subsidiary
UAE Branch Office Registration — Mainland (DED)
- UAE local service agent: a mainland branch of a foreign company requires a UAE national local service agent; the agent does not have an ownership stake but acts as a liaison; annual fee AED 5,000-20,000 for the local service agent
- Ministry of Economy (MoE) approval: federal MoE must approve the branch registration before the DED application; submit parent company documents (incorporation certificate, board resolution, parent company audited financials, parent company articles of association)
- DED branch licence: once MoE approves, apply to Dubai DED for branch trade licence; specific branch activity aligned with parent company’s activity
- Branch office: must have a physical office in UAE; registered address required
UAE Branch Office Registration — Free Zone
- No local service agent needed: free zone branches do not require a UAE national local service agent; 100% parent company control
- Free zone-specific process: each free zone has its own branch registration process; typically requires parent company documents (same as mainland) plus the free zone’s standard application form
- DIFC branch: popular for financial services companies; DFSA must approve branches of regulated financial institutions; DIFC branch can conduct regulated activities in DIFC under the parent’s regulatory framework (where applicable)
- Cost: AED 20,000-50,000/year for a free zone branch licence depending on the free zone
UAE Branch Office — Liability and Tax
- Unlimited parent liability: as a branch, the parent company is fully liable for the branch’s debts and obligations; no protection of separate legal entity
- UAE CT for branch: a UAE branch of a foreign company is a UAE Permanent Establishment (PE); subject to UAE Corporate Tax at 9% on branch profits; must register for UAE CT and file returns
- Transfer pricing: transactions between the UAE branch and its parent company must be at arm’s length; UAE CT law requires fair market pricing for branch-parent transactions