How to Open a Branch in Dubai: A Guide for Foreign and GCC Companies

For companies in Qatar, Oman, Kuwait, Bahrain, Saudi Arabia and further afield, the fastest way into the UAE is often to open a branch in Dubai rather than set up a new company. A branch lets the parent trade under its own name and track record. But a branch is not always the right choice. This guide explains how a Dubai mainland branch works, the approval steps, the documents you need and how corporate tax applies.

Branch or subsidiary: the core difference

A branch is an extension of the parent company, not a separate legal person. In general, the parent is responsible for the branch's obligations. A subsidiary, such as a limited liability company (LLC), is a separate company that the parent owns.

Choose a branch when you want to use the parent's brand, contracts and credentials, and the parent's balance sheet supports the risk. Choose a subsidiary when you want to ring-fence liability, bring in local partners or raise funds in the UAE.

Good news: no national agent requirement for branches

Since the Commercial Companies Law was amended (Federal Decree-Law No. 26 of 2020, now consolidated into Federal Decree-Law No. 32 of 2021), the obligation for branches of foreign companies to appoint a UAE national service agent has been removed. The Ministry of Economy and Tourism (MoET) also confirms that foreign companies don't need a local national sponsor or agent to open a branch. Some older guides still say otherwise.

A short list of "strategic impact" activities, such as security and defence, banking, insurance and telecoms, still has ownership limits or special approvals.

Step 1: MoET initial approval

A mainland branch of a foreign company starts with a federal initial approval from MoET:

• Fee: AED 3,500.
• Processing: about one working day.
• Validity: four months. The branch cannot trade during this period.
• Condition: the company must not have a commercial agent registered for it in the Ministry's commercial agencies register.
• How: online, signing in with UAE Pass.

Documents for the MoET application

All documents must be attested:

1. Trade name reservation.
2. A certificate from the home country showing the company's establishment date, name, legal form, owners, activity and capital.
3. A board resolution approving the branch.
4. A service agent contract, only if you have one.

Step 2: Licensing with Dubai's Department of Economy and Tourism

With MoET approval in hand, you complete licensing with Dubai's Department of Economy and Tourism (DET). Invest in Dubai lists Branch of a GCC Company and Branch of Foreign Company as separate legal forms, so choose the correct one for your parent. DET sets its own fees and document list, which you should confirm for your activity before applying.

After licensing, the usual set-up steps follow: office lease, establishment card, visas, bank account and tax registrations.

Special points for GCC companies

GCC states agreed through the GCC Supreme Council that companies owned by GCC citizens can open branches in other member states for the same activities, with equal treatment. Since 2021, most foreign investors can also own 100% of a mainland company, so the ownership gap has narrowed. GCC nationals still have access to some schemes reserved for UAE and GCC nationals, such as the Intelaq and SME licences in Dubai.

If your parent is a Saudi, Qatari, Omani, Kuwaiti or Bahraini company, check early whether "Branch of a GCC Company" applies to your ownership structure. It can simplify the process.

Corporate tax: your branch is a permanent establishment

Under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022), a non-resident company with a permanent establishment in the UAE is taxable on the income linked to it. A branch, office or factory is a fixed place of business and normally creates a permanent establishment. Activities that are only preparatory or auxiliary do not.

The branch pays corporate tax at 9% on taxable income above AED 375,000. It must register with the FTA, keep accounts and file annual returns.

A common point of confusion: Article 24 of the law lets a UAE resident company exempt the income of its foreign branches. It works the other way round, so it does not help a GCC parent with a UAE branch. Whether your home country taxes the branch profits too depends on its own rules and any double tax agreement with the UAE.

Free zone branch option

Many free zones, including DMCC, JAFZA and DIFC, also license branches of foreign companies. Free zones set their own requirements. DMCC, for example, asks corporate shareholders for fully attested incorporation documents and states that an apostille is not accepted in place of full attestation. A free zone branch may also qualify for the free zone corporate tax regime, which has its own conditions.

Practical checklist

• Confirm your activity is allowed for a branch and not restricted.
• Choose mainland or free zone based on where your customers are.
• Start document attestation early: it is often the slowest step.
• Prepare a board resolution naming the branch manager.
• Plan corporate tax and VAT registration from day one.

How GULF CONSULT can help

GULF CONSULT sets up branches and subsidiaries for GCC and international companies across Dubai, Abu Dhabi and more than 40 free zones. We handle MoET and DET approvals, PRO work, visas and banking, and register the branch for corporate tax and VAT.

Related services: Business setup & company formation, PRO services, Corporate tax advisory.

Book your free consultation

Planning to expand into the UAE? Book GULF CONSULT's free 30-minute consultation to compare a branch, a subsidiary and a free zone option for your business. Email [email protected], call +971 58 600 4833 or message us on WhatsApp.