OpeningaBranchofaForeignCompanyinDubai(2026):StepsandTax

Opening a branch of a foreign company in Dubai lets an existing overseas business operate in the UAE under its own name, without creating a separate company. The branch is licensed either on the mainland by the Department of Economy and Tourism (DET) or by a free zone authority. It must carry out the same activities as its parent, and the parent remains fully liable for its obligations. You will need the parent's corporate documents, legalised for use in the UAE, a board resolution approving the branch and a power of attorney for the branch manager. A mainland branch has generally also needed a UAE national service agent, so check the current requirement for your activity.

This guide compares a branch with a subsidiary, explains the mainland and free zone routes, lists the documents and steps, and covers tax, banking and visas for branches. It is aimed at companies in the UK, India and elsewhere expanding into the UAE. It is based on the UAE Commercial Companies Law, DET and free zone procedures and the corporate tax rules, checked as of October 2026. Requirements vary by activity and authority, so confirm them before you start.

Branch of a Foreign Company vs Subsidiary

Many groups start with a branch because it is simple and shows clients the established parent brand, then set up a subsidiary later if the UAE business grows or needs its own partners. A branch can also be a sensible first step for project-based work, such as a contract with a UAE client, because the parent's track record and financial standing sit behind it from day one. Our comparison of UAE and UK company formation explains how the two systems differ.

Mainland Branch or Free Zone Branch?

• Mainland branch (DET): can trade directly with customers across the UAE mainland, subject to the activity. A UAE national service agent has generally been required for branches of foreign companies. The agent has no ownership or control and is paid a fee for handling government formalities.
• Free zone branch: registered with a free zone authority, with no service agent. Suitable for regional headquarters, services to clients outside the UAE and businesses that do not need to sell directly on the mainland.

The decision depends on who your customers are. If they are UAE government entities or mainland businesses that need local invoices, the mainland is usually the better fit. Our guide to free zone vs mainland covers the trade-offs in more depth.

Documents You Need From the Parent Company

• Certificate of incorporation or registration.
• Memorandum and articles of association.
• A board resolution approving the UAE branch, its activities and the branch manager.
• A power of attorney appointing the branch manager.
• Recent financial statements, where the authority asks for them.
• Passport copies of the branch manager and, in some cases, the directors.

Documents issued abroad must be legalised for use in the UAE: typically notarised in the home country, attested by the relevant authorities there and by the UAE embassy, then attested by the UAE Ministry of Foreign Affairs. An Arabic legal translation is usually needed for mainland applications. Legalisation often takes longer than the licence itself, so start early.

How to Open a Branch in Dubai, Step by Step

1. Choose the jurisdiction, mainland or a specific free zone, based on your customers.
2. Confirm the activity matches the parent's registered activities.
3. Reserve the branch name and obtain initial approval.
4. Legalise and translate the parent's documents.
5. Sign the service agent agreement, for a mainland branch where required.
6. Secure premises, either an office lease or a qualifying flexi-desk.
7. Submit the application and pay the licence fees.
8. Get the establishment card so the branch can sponsor visas.
9. Open the bank account and register for tax.

Corporate Tax and VAT for Branches

A UAE branch of a foreign company is generally treated as a permanent establishment for corporate tax. It must register with the Federal Tax Authority and pay 9% corporate tax on taxable profits attributable to the branch above AED 375,000, and it must keep accounts that show those profits separately from the parent. VAT registration is required once the branch's taxable supplies exceed AED 375,000 a year. The parent's home country may also tax the branch profits, with relief often available under a double tax agreement. Our corporate tax guide covers the rates and filing rules.

Banking and Visas for a Branch

Banks open accounts for branches based on the parent's documents, financial history and ownership, so expect questions about the group structure and beneficial owners. A well-established parent with audited accounts usually makes banking easier than for a new start-up. Once the establishment card is issued, the branch can sponsor residence visas for its manager and employees, within the visa allocation of its premises. Our guide to hiring your first employee in Dubai covers the visa steps.

Timeline and Costs

The timeline is usually driven by document legalisation in the parent's home country, which can take from one to several weeks depending on the country. Once documents are ready, the licence itself commonly takes one to three weeks, followed by the establishment card, visas and the bank account. Plan for around one to three months end to end. Costs depend on the authority, activity and premises, and typically include the licence fee, office or flexi-desk rent, legalisation and translation, the service agent fee for a mainland branch, and visa costs. Ask for an itemised quote covering the whole first year rather than the licence alone, because premises and visas often cost more than the licence. Our first-year company cost breakdown shows typical ranges for each item.

Branches for UK and Indian Parent Companies

The process is the same for every country, but a few points come up often for the two largest groups of companies expanding into the UAE:

• UK parents: documents are usually certified by a solicitor or notary and legalised through the UK authorities and the UAE embassy. UK companies should also consider how branch profits are treated under the UK-UAE double tax agreement and whether the UK branch exemption election suits them.
• Indian parents: overseas direct investment rules apply to setting up and funding a foreign branch or subsidiary, so involve your Indian bank and chartered accountant early. Documents are typically attested in India and by the UAE embassy before UAE attestation.

In both cases, take advice in the home country on reporting the UAE operation, because the branch's profits and assets form part of the parent's accounts.

Common Mistakes When Opening a Branch

• Starting legalisation late, which delays the whole application.
• Choosing a UAE activity that does not appear in the parent's documents.
• Picking a free zone when your main customers need mainland invoices.
• Not keeping separate branch accounts for corporate tax.
• Forgetting that the parent is liable for the branch's debts and contracts.

Key Takeaways

• A branch is part of the foreign parent, which remains fully liable.
• Branches must carry out the parent's activities.
• Mainland branches have generally needed a UAE national service agent; free zone branches do not.
• Parent documents must be legalised and, for the mainland, translated into Arabic.
• Branches are generally subject to 9% corporate tax on UAE profits above AED 375,000.

Expand Into the UAE With SMS Consulting

SMS Consulting, operating under ISO 9001:2015-certified processes across offices in Dubai, London, Delhi and Dhaka, sets up branches and subsidiaries for overseas companies, including document legalisation, licensing, banking and visas. See our company formation services or talk to us.