top of page


Expanding Your Reach to the Middle East


Dubai Mainland Company is a popular type of business entity among foreign investors in Dubai due to its various advantages. However, one significant limitation of this business formation is that, for some of the business activities, foreign company owners can only hold 49% of the shares, while the local sponsor holds the remaining 51% of the shares.

To overcome this restriction and gain full ownership of the business, foreign companies can opt for setting up a branch office in Dubai. This option allows them to avoid the condition of having a local sponsor and take complete control of their business operations. Establishing a branch office can be an attractive option for foreign companies looking for more control and flexibility in their business dealings in Dubai.

Branch Office

A branch office acts as a full-fledged extension of your parent company, with the legal authority to conduct commercial activities in Dubai. This includes entering contracts, generating sales, and earning profits directly. Establishing a branch office requires a higher level of investment and operational setup, such as securing office space and hiring local employees

Representative Office

A representative office serves as a liaison point for your parent company. Its primary function is to promote your brand, conduct market research, and establish relationships with potential clients and partners. Representative offices cannot engage in revenue-generating activities directly. However, they offer a more cost-effective and less complex setup compared to branch offices.

Choosing the Right Path: Eligibility and Requirements

To establish a branch or representative office in Dubai, your company must be a registered entity outside of Dubai with good financial standing. The specific business activities you plan to undertake will determine the eligibility criteria and required licenses. Generally, the application process involves submitting documents such as:

A copy of your company's registration certificate​

A detailed business plan outlining your activities in Dubai

A power of attorney authorizing a local representative to act on your behalf

The Advantages and Considerations of Establishing a Branch Office in the UAE

Entrepreneurs seeking to gain a competitive edge in the thriving UAE market face various options. While free zones or conventional mainland structures are popular choices, a branch office is an ideal option for those wanting to establish a local market presence while retaining 100% control over their company.

In most instances, the parent company, regardless of its location in the UAE or abroad, is directly accountable for the commercial operations of the branch office. This office serves as an extension of the existing business, without having a separate legal identity from the parent corporation. As a result, while most branch offices are permitted to operate in the local UAE market, they are restricted to conducting similar business activities as the parent company.

Establishing a company branch office offers numerous benefits, from favorable tax rates to a gateway into a new industry. However, before deciding, it is crucial to understand the different types of branch offices that can be set up in the Emirates and the activities they are authorized to undertake.

Branch Office Options in the UAE: Types and Features

Four distinct types of branch offices can be set up in the UAE, each having different features and conditions. Choosing the right type of branch office depends on the nature of your business activities, company structure, and other relevant factors.

  1. Corporate shareholder: This type of branch office allows an individual shareholder to have a stake in the company along with the license. The parent company can be located in the UAE or abroad.

  2. Branch company: This is the most popular type of branch office in the UAE. The parent company is the sole owner, and there is no need for share capital. The branch office uses the parent company's articles of incorporation.

  3. Representative office: This is the most economical type of branch office. The parent company can be located in the UAE or abroad. The primary function of a representative office is to promote and source jobs for the parent company and is not allowed to make a profit in the UAE.

  4. Subsidiary: This type of branch office is considered a separate legal entity from the parent company and must be managed from within the UAE. The parent company may be located in the UAE or abroad, but the management of the subsidiary must be in the UAE.


Difference between Branch and Representative Offices

Branch offices and representative offices are different in their purpose and operations. Branch offices are fully-fledged operations of a parent company that conducts the same business activities and has the same legal status as the parent company. Representative offices, on the other hand, are limited to promoting and sourcing jobs for the parent company and are not allowed to make a profit in the UAE.


Factors to Consider When Establishing a Branch Office

 Before setting up a branch office in Dubai, these factors must be taken into consideration:

  • The branch office must conduct the same operations as the parent company.

  • The parent company must obtain the necessary licenses from Dubai's regulatory bodies.

  • The branch office does not possess a separate legal identity from the foreign company.

  • The parent company will be responsible for the financial obligations and liabilities of the Dubai branch office.

  • The branch office's income generated in the UAE will be taxed.


Steps to open a Branch Office in Dubai

The steps to open a branch office in Dubai include:

  • Choose the appropriate business activity and obtain the necessary licenses

  • Find a local sponsor or service agent if required

  • Secure a physical office space

  • Register the branch office with the Dubai Department of Economic Development (DED)

  • Obtain a trade license for the branch office

  • Register for VAT (Value Added Tax) if applicable

  • Submit all required documents, including proof of the parent company’s incorporation, articles of association, and proof of ownership

  • Pay all applicable fees

  • Once approved, receive the certificate of incorporation for the branch office.


Foreign Company Expansion in Dubai: Branch vs. Representative Office

When a foreign company establishes a branch or representative office in Dubai, it has full ownership and control of the business without the need for local sponsors. Only a local service agent is required to handle administrative tasks. The branch office can conduct business activities and earn profits, while a representative office can only promote and market the products and services of its parent company, offering a valuable presence and introduction in Dubai and the UAE.


Key Requirements for Opening a Branch or Representative Office in Dubai

When opening a branch or representative office in Dubai, a bank guarantee of AED 50,000 must be submitted to the Ministry of Economy as part of the licensing process. Additionally, a manager must be appointed to represent the company, and they must have authorization from the Board of Directors.



        +971 55 501 2638

        +971 54 323 1596



  • Facebook
  • Twitter
  • LinkedIn
  • Instagram
  • YouTube
bottom of page