Foreign companies entering the UAE must choose between a branch and a subsidiary. Here is the complete 2025 comparison.
UAE Branch Office Overview
A UAE branch is NOT a separate legal entity — it is an extension of the foreign parent company. The parent company is fully liable for all branch obligations. Branch setup: registered with DED (Dubai) or ADCCI (Abu Dhabi) or equivalent. A local service agent (UAE national or national-owned company) is required for mainland branches (agent fees: AED 10,000-30,000/year, no ownership stake). Activities allowed: only the same activities as the parent company (cannot diverge from parent’s business). Full name requirement: the branch must use the parent company’s name (with “UAE Branch” or “Dubai Branch” added). Branch advantages: simpler (no separate share capital required), parent company’s reputation directly applied, and no separate UAE shareholder needed. Branch disadvantages: parent fully liable for branch debts, local service agent annual fee, and limited to parent’s activities.
UAE Subsidiary Company Overview
A UAE subsidiary is a separate legal entity (a UAE company). Liability: limited to the UAE subsidiary’s own assets (parent company is protected if the subsidiary faces creditors). Ownership: foreign parent can own 100% of the UAE subsidiary (for most activities under the 2021 Companies Law amendments). Structure: UAE LLC (limited liability company) for mainland, or FZE/FZC for free zone. Capital: no minimum capital requirement for mainland LLCs (paid-up capital as agreed in MOA). Subsidiary advantages: legal separation (parent protected), can have UAE employees and a full independent UAE business, 100% ownership for most activities, and full flexibility to expand activities beyond parent’s original scope. Recommendation: most foreign companies choose a subsidiary over a branch for liability protection and flexibility. A branch is appropriate for: temporary project-specific UAE presence where the parent’s full reputation is needed on the licence.