Key Takeaways
- Before a foreign company opens an office or branch in the UAE, it needs a licence from the competent authority, and the Ministry has to approve it (Commercial Companies Law, Article 336, 2021 text).
- A branch isn't a separate legal person, so the parent answers for its debts. A subsidiary such as a limited liability company (LLC) caps the owners' risk at the capital they put in.
- A branch keeps its own balance sheet and appoints a UAE-registered auditor (Article 338). A representative office isn't allowed to trade at all (Article 339).
- The parent's documents go to the UAE embassy, then the Ministry of Foreign Affairs, then an Arabic translator and finally the Ministry of Justice (dubai.ae, October 2026).
- One law firm reads Federal Decree-Law 20 of 2025, issued on 1 October 2025, as bringing the onshore branch or representative office of a free zone company under the law.
Your company already trades abroad and now wants a presence in Dubai. You can open a branch office, set up a representative office, or form a subsidiary, which is a new UAE company in its own right. A branch and a representative office are both extensions of the parent. A subsidiary stands apart from it. Liability, audit and paperwork all come back to that difference.
Branch office, representative office and subsidiary compared
A branch is the foreign company itself, doing business in the UAE under a local licence. A representative office promotes the parent and studies the market, but it doesn't sell anything. A subsidiary is a separate UAE company owned by the parent, for example an LLC or a free zone company.
On the mainland, meaning anywhere in an emirate outside a free zone, the first two fall under the Commercial Companies Law (CCL, Federal Decree-Law 32 of 2021). Article 336 of the 2021 text says a foreign company needs a licence from the competent authority, approved by the Ministry, before it operates here or opens a UAE office or branch. Companies licensed in free zones are outside that article. Anyone who goes ahead without the licence becomes jointly and severally liable, which means each of them can be made to pay the full amount. Federal Decree-Law 20 of 2025 changed 15 articles of the law, so check the current wording of every article this page cites.
Before it starts work, a foreign company must be entered in the Foreign Companies Register at the Ministry of Economy and Tourism (Article 337). A representative office may only carry out "the study of markets and production capabilities without engaging in any commercial activity" (Article 339).
Branches of foreign companies no longer need an Emirati service agent, according to the u.ae page on full foreign ownership (updated 6 April 2026). In Dubai, licences come from the Department of Economy and Tourism (DET), the emirate's mainland licensing office, which used to be called DED.
Liability and legal personality
A branch has no legal personality of its own. Put simply, it can't owe money in its own name. Article 337 treats the branch as the foreign company's domicile, its legal home, for the UAE activity. For Dubai, Executive Council Resolution 11 of 2025 spells it out: a free zone company's Dubai branch is not independent of its parent (Article 5(b)). If the branch walks away from a lease or a supplier makes a claim, the parent's own assets are on the line.
A subsidiary works the other way round. In an LLC, the owners can lose only the capital they contributed. Article 71(2) of the CCL allows a single owner, and that owner can be a person or a company. A parent company can therefore hold a one-person LLC.
Founders pick a branch when they want one legal entity and are happy for the group to sign contracts in the parent's name. It gets expensive when the group really wanted to keep UAE risks away from the parent. Switching from a branch to a subsidiary later means forming a new company. Decide on liability before you hand in the first application.
Documents from the parent and the attestation chain
The parent's documents have to be attested. That means officials stamp them to confirm they're genuine, and the stamps come in a fixed order. Dubai's official guide lists the steps for foreign documents (dubai.ae, October 2026):
- the UAE embassy in the parent's home country attests the document;
- the UAE Ministry of Foreign Affairs adds its own counter-attestation;
- a legal translator puts it into Arabic;
- the Ministry of Justice attests the translation.
What happens before the embassy step depends on the law of the parent's home country, so check that with the authorities there. The licensing authority's checklist for your activity names the exact documents it wants. It may include a board resolution in which the parent approves the UAE branch and names its manager.
Founders often find the chain takes weeks. If a document misses a step, it's rejected. Your application then waits for a corrected set, and any lease you've already signed keeps running.
It pays to have a lawyer licensed in the UAE or a licensed setup provider compare each document with the authority's list before you spend money on the first attestation fee. A subsidiary goes through the same chain whenever its shareholder is a foreign company.
Mainland branch versus free zone branch
A mainland branch gets its licence from the emirate's licensing authority, with Ministry approval, and is entered in the Foreign Companies Register (Articles 336 and 337). For the mainland options in detail, see the guide to mainland company setup in the UAE.
Free zones are areas with their own authority that license companies under their own rules, and they register branches themselves. The International Free Zone Authority (IFZA) has Branch among its licence types. SAIF Zone and Ajman Free Zone both list branches of foreign companies (zone websites, October 2026). Meydan's Fawri licence is different. It accepts only LLCs and says branches aren't permitted.
The Dubai International Financial Centre (DIFC) charges US$2,000 to register a representative office, plus a US$4,000 licence fee. A private company costs US$8,000 plus a US$12,000 licence fee (DIFC Table of Fees Rev. 16, 30 July 2026). Visas for these structures are covered in the free zone visa guide.
A free zone company that wants to work on the Dubai mainland has three options. It can open a mainland branch, run a branch out of its free zone office, or take a six-month permit. The free zone branch costs AED 10,000 per year and the permit AED 5,000 (Executive Council Resolution 11 of 2025, as of October 2026). A Dubai permit doesn't reach any other emirate (Article 3(c)).
Federal Decree-Law 20 of 2025, issued on 1 October 2025, adds a rule for free zone companies that are allowed to work onshore. According to the law firm Baker McKenzie (December 2025), they do it through a branch or representative office that falls under the CCL.
Audit, accounts and Corporate Tax
A mainland branch of a foreign company keeps its own books. It needs a separate balance sheet, a separate profit and loss account and a UAE-registered auditor, and the accounts go in every year (CCL Article 338, 2021 text). A representative office is outside this rule, because it isn't allowed to trade.
An LLC subsidiary has the normal company duties. Article 27 says every LLC and joint stock company needs an auditor. Article 26 says the accounting registers must be kept for at least five years (2021 text). The Corporate Tax law asks for longer: the records behind a Corporate Tax return have to be kept for 7 years after the tax period (Federal Decree-Law 47 of 2022, Article 56). A free zone company that opens a Dubai mainland branch must also keep separate financial records for the mainland activity (Resolution 11 of 2025, Article 3(b)(2)).
Corporate Tax registration works differently for the two structures. A new UAE company, an LLC subsidiary included, must register with the Federal Tax Authority (FTA) within three months of incorporation (FTA Decision 3 of 2024). A foreign company can become a non-resident with a permanent establishment in the UAE, which roughly means a fixed place of business here that makes it taxable. It then has six months from the date the permanent establishment exists (FTA Decision 3 of 2024, Article 4). Registering late costs an AED 10,000 penalty (Cabinet Decision 75 of 2023 as amended, as of October 2026).
A corporate tax consultant can tell you whether your branch counts as a permanent establishment. The answer changes your registration deadline.
Regional headquarters and where they fit
A regional headquarters belongs wherever the group's activity points, and the zone you pick should license the headquarters activity you have in mind. DIFC and Abu Dhabi Global Market (ADGM) are the two financial free zones. A group with regulated financial activity starts there.
Ministerial Decision 229 of 2025 puts headquarter services and treasury services to related parties on the list of qualifying activities, the activities that can earn the free zone Corporate Tax relief. To be a Qualifying Free Zone Person, a free zone company that meets the conditions for that relief, the company also needs adequate substance in the State (Federal Decree-Law 47 of 2022, Article 18(1)). Substance means real people, premises and spending in the UAE. How much is enough for a regional headquarters is worth agreeing with a tax adviser before you choose the premises and hire staff.
If the group only needs a holding layer, DIFC and ADGM offer special purpose vehicles (SPVs), companies set up to hold assets or shares. ADGM gives US$1,900 as the total cost to set up an SPV. Both zones say an SPV can't be used for operating business or to employ staff (ADGM and DIFC pages, October 2026).
Choosing for liability separation
Start with one question: who should answer for the UAE business? A branch suits a group that's content for the parent to carry every UAE obligation. A subsidiary suits a group that wants liability to stop at the UAE company, expects local partners or investors, or needs an entity with its own accounts.
An offshore company registered with the Jebel Ali Free Zone Authority (JAFZA) may own shares in a UAE operating company. It still needs the proper licence to do business itself (Offshore Companies Regulations 2023, Regulation 14). The guide to an offshore company in the UAE explains how that works. For ownership limits on the subsidiary, see foreign ownership and the Commercial Companies Law. For the company form itself, see the LLC in the UAE.
Take the questions below to the licensing authority and to the group's lawyers before you apply. The first one decides between branch and subsidiary. The others tell you whether a branch is possible for your activity, how long the paperwork will take and who will sign off the accounts.
- Which UAE obligations is the parent prepared to carry directly?
- Can the activity be run as a branch, and will the authority license it that way?
- Which of the parent's documents have already been through the full attestation chain?
- Who will act as the UAE auditor, and when are the first accounts due?
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