Setting Up a Branch Office in Dubai
Any entrepreneur seeking a strategic foothold in the booming UAE market faces a variety of options. While many choose a free zone or traditional mainland structure, a branch office can be ideal for gaining local market access while retaining 100 % foreign ownership.
What Is a Branch Office?
A branch office is simply an extension of its parent company, domestic or overseas and has no separate legal status. It must operate under the same approved activities as the parent and reports directly to the parent entity. Branches never held local equity partners; they appoint a Local Service Agent (LSA) only to liaise with government authorities.
Note: Since June 2021, most Dubai mainland LLCs can also be 100 % foreign‑owned. Branch offices remain useful when you need to mirror your parent’s exact activities without forming a new LLC.
Types of Branch Office
Branch of a UAE or GCC Company
- Parent based in the UAE or another GCC country.
- No share capital required; ownership follows the parent.
Foreign Branch Office
- Parent based outside the UAE.
- Requires AED 50,000 bank guarantee and an LSA; no equity partner.
Representative Office
- Marketing and promotion only; cannot generate income.
- Most cost‑effective for brand awareness and lead generation.
Local Service Office
- Professional service firms (e.g., legal, accounting).
- Must appoint an LSA; no commercial trading.
Branch vs. Representative Office
- Branch Office:
- Performs all business activities of its parent and may earn profit.
- Operates under the parent’s Articles of Association.
- Representative Office:
- Limited to marketing, research, and sourcing.
- Cannot carry out commercial activities or earn revenue.
Factors to Consider
- Must conduct the same activities as the parent company.
- Parent applies for licences with Dubai authorities.
- Branch is not a separate legal entity; parent bears all liabilities.
- Subject to UAE corporate tax (9 % on profits above AED 375 000).
Steps to Open a Branch Office in Dubai
- Appoint a Local Service Agent
- Reserve a Trade Name & Obtain Initial Approval
- File the Branch Application
- Secure Ministry of Economy & Federal Committee Approval
- Obtain DED Licence
- Complete Administrative Formalities
- Register with the Chamber & Commercial Authorities
Benefits of a Branch Office
- Enables 100 % foreign ownership (no equity sponsor).
- Only an LSA is required, no involvement in management or profits.
- Mirrors your parent’s activities and can generate revenue locally.
- Provides a transparent audit trail and mainland market access.
- Cost-effective entry into new sectors under one licence.
Key Requirements
- Bank Guarantee: AED 50,000 (for foreign branch offices).
- Manager Appointment: Must have Board-approved appointment; manager typically UAE‑resident depending on activity.
What We Offer
- Obtaining approvals from all relevant authorities
- Preparing required documents and Memorandum of Association
- Identifying and onboarding a qualified Local Service Agent
- Assisting with bank account opening and documentation
- Securing suitable office premises and handling all formalities
