There are multiple pathways for international companies setting up a branch office in Dubai, including representative offices, branch offices, and subsidiaries.
All three serve as extensions of international companies but their scopes differ.
Branch offices can carry out commercial activities and generate revenue.
Representative offices, on the other hand, are limited to promotional and administrative functions and cannot participate in revenue-generating activities.
Subsidiaries are separate legal entities owned by the parent company and enjoy greater operational freedom.
Benefits of opening a Branch Office in Dubai
Opening a branch office in Dubai comes with several strategic advantages:
- Direct access to the UAE and the wider GCC market
- 100% foreign ownership and control in designated free zones
- Favourable tax environment and access to double taxation avoidance treaties
- Availability of skilled talent supported by state-of-the-art infrastructure
- Enhanced global brand presence
- Flexibility to transfer staff, technology, and capital between global offices
- Strengthens positioning when bidding for regional contracts
For establishing branch offices in the mainland, an appointment with a local service agent (LSA) is mandatory.
How to Open a Branch Office in Dubai
There are several steps to ensuring regulatory compliance while opening a branch office.
- You must choose an appropriate jurisdiction: This involves deciding between the mainland and the free zone.
- Select and define business activities that align with those of the parent company.
- Reserve your trade name that mirrors the parent company and complies with UAE naming regulations.
- Secure initial approval from the Dubai Department of Economic Development (DED) or the relevant free zone authority, along with pre-approval from the Ministry of Economy.
- Appoint a local service agent (if applicable).
- Prepare and notarize all required legal documents.
- Apply for the trade license.
- Lease office space.
- Register for VAT and other applicable taxes.
- Open a corporate bank account in the UAE.
- Recruit staff and apply for visas and work permits.
Mainland or Free Zone?
Choosing between a mainland and a free zone branch depends largely on your business strategy:
Mainland branches can trade directly with the UAE market and government entities. However, they require an LSA and generally involve higher setup and operational costs.
Free Zone branches are ideal for international trade and export-oriented businesses, as they allow 100% foreign ownership with no LSA required. Typically, the operations are restricted within the free zone or overseas.
Visa and Immigration Framework
Branch offices are eligible to sponsor visas once the establishment files are issued. A foreign company branch can hire staff and sponsor their work permits, and dependents, considering the minimum salary requirement.
For expert guidance in setting up your branch office in the UAE, you can get in touch with Atelier Business Center.
With guidance on the licensing, you get ongoing assistance with amendments, expansions, and additional licenses. You get faster approvals, reduced compliance risks, and seamless renewals as well as smooth coordination with regulatory bodies.
