How to set up the branch of a foreign company in Dubai. The A-Z

branch of a foreign company in dubai

When it comes to business, Dubai is the Godfather. The Hub has it all: Global Connectivity, favourable Tax Policies, a Supportive Business Ecosystem, and Robust Infrastructure. As a company, it is only natural to think of Dubai as one of the regions in which to do your business.

Setting up your business as a branch of a foreign company in Dubai involves several key steps, from initial application and authority approvals to operational considerations like office leasing and employee visa processing. It underscores the need for meticulous planning. We recommend professional consultation along with the knowledge of information below.

Types of Foreign Business Establishments

To set up an office in Dubai, there are a few options. While the below are the various options available to establish a new entity in Dubai, it is necessary to carefully consider each entity’s legal framework and economic benefits before registering.

Subsidiary: A subsidiary is a separate legal entity established in Dubai, typically with majority ownership by a foreign parent company. It is subject to UAE corporate tax regulations.

Representative Office (RO): A RO is not a separate legal entity. It is a representative office of the parent company and, hence, is not allowed to engage in business transactions. It is ideal for market research, promotion, and communication activities. An RO entity cannot generate profits within the UAE.

Branch Office: A branch office is an extension of the foreign parent company with no separate legal identity. Its activities are limited to the parent company. The branch will comply with UAE corporate tax regulations (9% tax above 375000 AED) on profits generated within the UAE.

Free Zone Company (FZE): An FZE is a separate legal entity established within a designated free zone. It offers benefits such as 100% foreign ownership, tax exemptions, and simplified procedures. However, it is often restricted from conducting business directly within the UAE mainland.

Branch of a foreign company in Dubai

A branch is an unincorporated extension of the parent company. It directly engages in business under the parent company’s umbrella without a separate legal identity. The branch office registration and licence allow the entity to be set up commercially and earn profits. A branch of a foreign company in Dubai cannot engage in activities outside the parent company’s business scope. While branches can benefit from 100% foreign ownership in specific sectors, they are subject to corporate tax on their UAE profits

[A 9% tax is applied on annual earnings of AED 375,000, around USD 102,000 per year].

Read more on Corporate Tax for Foreign Companies here. 

Characteristics of a Dubai Foreign Branch:

  • A foreign branch in Dubai acts as an extension of your parent company:
  • Registration and license are required, including trade license acquisition from the DED.
  • A branch, once registered, has access to everything from marketing to full-scale commercial activities.
  • It is wholly owned by the parent company, with no separate legal entity in Dubai.
  • The parent company bears all liabilities of the Dubai branch.

Benefits of a foreign company branch in Dubai

Dubai presents compelling reasons for foreign companies in UAE to establish a branch, including-

  • Initiating a branch in Dubai allows your business to operate within the UAE and Middle East, aligning with local legal frameworks, including registration and licensing protocols.
  • Branches enjoy 100% ownership and operational similarities to your parent company.
  • Benefit from straightforward setup processes with no paid-up capital requirement.


  • Even with the 9% corporate tax, Dubai and Emirates business entities pay minimal tax compared to the rest of the world.


  • A branch of a foreign company in Dubai is only the beginning. The UAE’s dynamic market provides diverse opportunities for potential businesses to maximise their growth.

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The Registration Process 

The following is the general process. For a more detailed and specific process akin to your particular business, contact Nair and Nelliyatt for consultation. 

  1. Finalise Your Business Activity: Clearly define your company’s specific activities in Dubai. The specifics will determine the most suitable legal structure and licensing requirements.
  1. Select Your Location: Depending on your chosen structure, decide on a location within Dubai mainland or a specific free zone. Each free zone has its regulations and fees.
  2. Appoint a Local Service Agent (LSA): Unless establishing an FZE, foreign companies in UAE need to appoint a UAE national or a UAE national-owned company as an LSA. They act as a sponsor and facilitate communication with government authorities.
  3. Prepare Required Documents: The specific documents will vary depending on your legal structure. 
  4. Submit Your Application: Once you have gathered the necessary documents, submit your application to the relevant authority. You will forward the application to either the Department of Economic Development (DED) for mainland registration or the specific free zone authority for FZEs.
  5. Obtain Licenses and Permits: Depending on your chosen activity, you may need to obtain additional licenses and permits from relevant government departments.
  1. Commence Operations: After successful registration and obtaining all required licenses, you can officially begin your business operations in Dubai.

Certificate of Incorporation (COI) Dubai

Certificate of Incorporation Dubai is the most critical certificate the free zone authority issued upon successfully registering your FZE. It is proof of the FZE’s legal existence within the free zone.

A Certificate of Incorporation (COI) is not typically required when registering a branch of a foreign company in Dubai (outside of a free zone) because a branch office doesn’t have a separate legal identity from its parent company. 

The parent company’s existing Certificate of Incorporation, issued in its home country, proves its legal existence.

Here’s a breakdown of why a CoI isn’t required for branches:

  • Extension of Parent Company: A branch functions as an extension of the foreign parent company, operating under the parent company’s legal umbrella.
  • No Separate Legal Entity: Unlike a subsidiary (a separate legal entity), a branch doesn’t have its own registration or incorporation process within Dubai

Documents Needed for Branch Registration

The Department of Economic Development and the Ministry of Economy oversee licensing and approval, ensuring your business aligns with UAE regulations. Document submission plays a crucial role in registering a company in Dubai.

The documents required for registering a branch of a foreign company in Dubai typically include:

  • Application form
  • Resolution from the foreign parent company board authorising the establishment of the branch
  • Memorandum of Association (MOA) and Articles of Association (AOA) of the parent company
  • Copies of passports and visas for directors and shareholders
  • Certificate of Good Standing from the parent company’s home jurisdiction (optional, but may be requested)
  • Audited financial statements of the parent company (may be required)
  • Local Service Agent (LSA) appointment agreement

Influence of Laws for Foreign Investors

The UAE government has consistently implemented reforms to streamline the process of foreign company registration in Dubai. In 2020, a landmark amendment to the Commercial Companies Law introduced significant changes, including:

  • Increased Foreign Ownership: Previously, foreign companies establishing a branch in Dubai were restricted to a 49% ownership stake. The revised law allows for 100% foreign ownership in specific mainland areas, making Dubai an even more attractive proposition for international investors.
  • Simplified Business Setup: The government has taken steps to reduce bureaucratic hurdles and expedite registration. The steps include initiatives like the Invest in Dubai” platform, which offers a centralised portal for obtaining licenses and permits.

Appointing a National Service Agent

A UAE national or a company wholly owned by UAE nationals must act as your National Service Agent, playing a crucial role in your business entity’s setup and ongoing compliance.

There are two main reasons why a local service agent (LSA) is required when setting up a branch of a foreign company in Dubai (outside of a free zone):

1.   Sponsorship and Compliance: Foreign companies lack legal presence and don’t have a direct stake in the UAE. The LSA acts as a sponsor, fulfilling a legal requirement for the branch’s existence. They ensure the branch adheres to UAE regulations and serves as a point of contact for government authorities. This sponsorship role comforts the government, knowing a local entity is responsible for the branch’s activities.

2.   Facilitation and Expertise: The registration process in Dubai can be complex, with unfamiliar regulations and procedures. The LSA is a facilitator, leveraging their local knowledge and experience to efficiently guide you through the process. They can handle tasks like:

  • Liaising with government departments
  • Completing and submitting the necessary paperwork
  • Obtaining licenses and permits


Who are these National Agents?

Local service agents can be either:

  • Individual UAE Nationals: Emirati citizens with the legal authority to sponsor foreign companies.
  • UAE National-Owned Companies: These are owned by UAE nationals and authorised to act as LSAs.


Important Points to Consider

  • The LSA has no ownership stake or control over the foreign company’s branch. Their role is purely administrative and facilitative.
  • Choose a reputable LSA with experience in your industry. They can provide valuable insights and ensure a smoother registration process.
  • The fees associated with LSAs can vary depending on the complexity of your business and the chosen LSA. Negotiate a fair arrangement that meets your needs.


By understanding the role of the LSA and its value in navigating the registration process, you can ensure a more efficient and compliant establishment of your foreign company branch in Dubai.

Important Considerations


  • Streamlined Process: The UAE government has implemented reforms to simplify registration, especially for FZEs. For centralised assistance, use resources like the “Invest in Dubai” platform.
  • Legal Framework: The Commercial Companies Law (Federal Law No. 32 of 2009) is the primary legal framework governing foreign company registration. Familiarise yourself with its provisions for your chosen structure.
  • Local Service Agent (LSA): An LSA is crucial in navigating the registration process and can provide ongoing support. Choose a reputable LSA with experience in your industry.
  • Loopholes and Challenges: Be aware of potential challenges, such as delays due to incomplete documentation or manoeuvre complex regulations. 


Seeking advice from a reputable local company like Nair and Nelliyatt streamlines your tasks and minimizes risks. As they say, Dubai is the epitome of business, where initial moves carry significant weight. It’s prudent to seek assistance to streamline operations and reduce risks. Nair and Nelliyatt are readily available to assist you. Reach out to us to ensure a seamlessly smooth incorporation process in Dubai.

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