Foreign companies can retain 100 percent foreign ownership in the United Arab Emirates by opening a branch office. The branch office is basically an extension of the foreign parent company. It merely represents the parent company and carries on business under its name. Usually, a branch office may promote and market the products of the parent company, enter into transactions and conclude agreements in the name of the parent company, and offer services to its customers.
The Applications to Set Up a Branch of Foreign Company
The application to setup a branch office of a foreign company must contain the trade name, legal form, address of headquarters of the foreign company and the country where it carries its activities, name of national agent (if the agent is a legal entity, then its legal form), capital, names of partners, their nationality, and addresses. The next step is to obtain the name reservation from the Department of Economic Development (DED) and apply for an initial approval from the Ministry of Economy for opening the branch office in Dubai.
The Documents Required for Initial Approval
- Registration and a license application form.
- Proof of the reserved business name.
- Copy of the director’s passport and a letter of no-objection issued by the parent company.
- Copy of the UAE representative’s passport and naturalization book.
- Foreign company’s management board resolution for opening the branch in Dubai.
- Power of attorney for the Dubai director.
- Parent company’s Memorandum and Articles of Association.
- Copy of the parent company’s Certificate of Incorporation.
- Approval issued by the Government for carrying out the specified trading activities.
The Memorandum, Articles of Association and Certificate of Incorporation must be translated into Arabic and duly notarized.
Registration of the Foreign Company Branch
Once the initial approval is obtained, the following documents must be submitted in the Department of Economic Development and submit the following documents:
- The approval received from the Ministry of Economy.
- Copy of the property lease agreement in Dubai.
- Statement issued by the parent company on the business activities to be carried out.
- The Parent company’s audited financial statements for the last two years.
Once the Dubai branch obtains its initial approval from the Department of Economic Development it can register with the Chamber of Commerce and Industry and start operating. Now foreign investors can set up the company with a hundred-percent ownership.
BENEFIT OF SETTING UP OF A BRANCH OF FOREIGN COMPANY IN DUBAI
- You can maintain the brand as anywhere in the world
- Liability is on parent company
- Ownership of shares
- Do not require a local sponsor
- Can operate from free zone, offshore, and mainland
- Increase credibility of any brand
Key Differences Between a Branch Office and a Subsidiary in Dubai
Foreign companies expanding into Dubai often face a common dilemma — whether to set up a branch office or incorporate a subsidiary. A branch office operates as a direct extension of the parent company, carries its name, and the parent company bears full liability for its activities. A subsidiary, on the other hand, is a separate legal entity with its own identity, limiting the parent company's liability to its investment. While a branch office cannot engage in activities beyond those of the parent company, a subsidiary has more flexibility in diversifying its business activities. Understanding these distinctions helps foreign investors choose the right structure based on their business goals, risk appetite, and long-term strategy in the UAE market.
Conclusion
Setting up a branch of a foreign company in Dubai is a strategic way to expand your business presence in the UAE while maintaining full ownership and brand identity. With the ability to operate under the parent company’s name, enter into contracts, and offer services directly, a branch office provides both flexibility and credibility in a competitive market.
However, the process involves multiple approvals, documentation requirements, and compliance with local regulations. From initial approval to final registration, each step must be handled carefully to ensure a smooth setup.
With the right guidance and professional support, businesses can navigate the process efficiently, meet all legal requirements, and establish a strong foothold in Dubai’s dynamic business environment.
Our business experts at Danburite Corporate can assist you in your end to end business setup needs, for more details please write us on info@danburite.ae or call us on 971 56808009
FAQs
1. Is a branch office allowed to engage in activities different from its parent company?
No, a branch office can only carry out activities that match the business activities of its parent company. If you want to diversify into unrelated business lines, a subsidiary structure offers more flexibility.
2. How long does it take to set up a branch office of a foreign company in Dubai?
The process typically takes a few weeks, depending on how quickly approvals are obtained from the Ministry of Economy and the Department of Economic Development, along with document notarization and translation timelines.
3. Is a local sponsor required to set up a branch office in Dubai?
No, a branch office does not require a local sponsor. The parent company retains full ownership and bears complete liability for the branch's activities in the UAE.
