Setting up a Branch Office in Dubai, UAE

Planning to expand your business in the UAE? Learn how to open a branch office in Dubai with this detailed step-by-step guide for international companies.

How to Open a Branch of a Foreign Company in Dubai, UAE

Expanding your business into Dubai isn’t just about growth but also positioning. Dubai has become a hub for international companies thanks to its central location, strong infrastructure, and favourable tax regime.

But entering this market means making a few critical decisions early on. One of the most important is choosing the right legal structure for your business.

For many multinational firms, setting up a branch office in Dubai, UAE, is a smart, straightforward choice. It allows you to operate under your existing corporate umbrella while tapping into Dubai’s local economy. But while it may seem simple, there are essential rules, requirements, and responsibilities that come with it.

This guide breaks it all down. You’ll learn what a branch office is, what it takes to set one up, and the key legal and operational points to keep in mind.

If you’re planning your company’s next move into the UAE, this is where to start.

What is a Branch Office in Dubai?

A branch office in Dubai is an extension of your parent company abroad. It is not a separate legal entity. It carries out the same activities as the head office. The branch is fully owned by the foreign company and can generate profits inside the UAE.

Why Set Up a Branch Office in Dubai?

Dubai offers a business-friendly environment, excellent infrastructure, and strategic global access. Here’s why many international firms choose to open a branch in Dubai:

• 100% foreign ownership allowed
• Access to Middle Eastern, African, and South Asian markets
• Tax advantages
• Modern banking and legal systems
• Skilled workforce and professional services

Key Differences Between a Branch Office and a Subsidiary

Who Can Open a Branch Office in Dubai, UAE?

Setting up a branch office in Dubai is not for every business. It’s best suited to foreign companies that are already operational and looking to expand their footprint in a strategic market. The structure works well when you want full ownership, brand continuity, and direct market access without creating a completely new legal entity.

This route is ideal for:

• Multinational companies
• Well-established foreign businesses
• Service-based companies (legal, consulting, finance, tech)
• Manufacturing firms expanding operations

Industry-Specific Approvals: What You Need to Know

Not all business activities fall under the same umbrella. Some industries require special approvals from sector-specific regulators. If your business deals in finance, education, healthcare, media, or aviation, you’ll need an extra layer of permissions.

Below you will few examples of business activities:

Finance

For financial services, approval from the Central Bank of the UAE is a must. They assess your business model, capital adequacy, and risk profile before giving the go-ahead.

Healthcare

If you’re setting up a medical clinic, wellness center, or healthcare consultancy, you’ll need clearance from the Dubai Health Authority (DHA). Licensing standards here are strict and often include site inspections.

Education

Institutions or training centers must pass through the Knowledge and Human Development Authority (KHDA). This includes everything from curriculum reviews to staff qualifications.

Media

Any media-related activities like publishing, broadcasting, or content creation must be approved by the National Media Council (NMC).

Our EZONE team will assist in obtaining the necessary approvals for setting up branch offices in these industries.

Taxation and Compliance

Corporate Tax

The UAE introduced a federal corporate tax starting in 2023. If your branch generates more than AED 375,000 in annual profit, you’re subject to a 9% tax rate.

• Tax is based on net profit.
• Deductions are available, but documentation is key.
• You must register with the Federal Tax Authority (FTA).

VAT (Value Added Tax)

If your branch’s annual turnover exceeds AED 375,000, VAT registration in Dubai becomes mandatory. The standard rate is 5%.

• Applies to most goods and services.
• Quarterly returns are required.
• You need to issue tax invoices.

Economic Substance Regulations (ESR)

Some business activities require you to meet ESR compliance. This includes demonstrating real economic activity within the UAE.

If applicable, you’ll need to:

• Maintain local operations.
• Employ UAE-based staff.
• File an annual ESR notification and report.

Banking for Branch Offices in Dubai

One of the most critical but often underestimated steps in setting up your branch office is opening a corporate bank account in the UAE. Without it, you can’t manage local transactions, pay employees, or invoice clients effectively.

Opening a bank account in the UAE can take some time, especially for foreign-owned entities, due to the UAE’s strict banking and compliance regulations.

Knowing what’s required ahead of time will save you frustration and speed things up. Once your branch is licensed, the next step is opening a business bank account.

Documents Needed:

• Trade license
• MoE approval certificate
• Passport copies of directors and signatories
• Lease agreement
• Company structure chart (sometimes requested)

Tips for a Smooth Process:

• Choose a bank that has experience working with international firms.
• Be prepared for compliance checks. UAE banks are strict due to global AML rules.
• Some banks may ask for a local utility bill or proof of address.

Popular Banks to Consider:

• Emirates NBD
• Mashreq Bank
• Abu Dhabi Commercial Bank (ADCB)
• HSBC Middle East

Get expert assistance from our team in opening your branch bank account in the UAE.

Hiring, Visas, and Labour Rules

Setting up a branch of a foreign company in the UAE requires careful planning when it comes to hiring employees. From securing the right talent to ensuring compliance with local labor laws, having an in-house team is essential for smooth operations. The UAE has a well-structured system for obtaining visas, work permits, and adhering to labor regulations, making it easier for businesses to onboard employees efficiently while staying compliant with government requirements.

Visa Quota

The number of visas you’re allowed depends on your office size. As a general rule:

• One visa per 80 to 100 square feet of office space.

Employment Contracts

You must issue employment contracts through the Ministry of Human Resources and Emiratisation (MOHRE). These must be in Arabic and outline salary, hours, benefits, and duties.

Work Permits and Residency

Once the offer letter is accepted:

1. Apply for a work permit
2. Undergo medical testing
3. Complete Emirates ID registration
4. Finalise the residency visa

Emiratisation

Some sectors now require Emirati nationals in specific roles. Check if your sector has a quota or recommendation. Keeping employee files, issuing timely contracts, and renewing visas on time are critical to avoid penalties.

Compliance Requirements for Setting Up a Branch Office

• Trade License Renewal: Must be renewed annually through the Department of Economy and Tourism (DET). Start early to avoid last-minute delays.
• Lease and Ejari Renewal: Your office lease must remain valid and registered under Ejari. Any lapse can affect your ability to renew visas and licenses.
• Audit and Accounting: Maintain up-to-date financial records. Some branches, depending on their activities, may be required to undergo an annual audit by a certified auditor in the UAE.
• Corporate Tax Filing: Submit your corporate tax return to the Federal Tax Authority (FTA) before the annual deadline. Late filings can result in penalties.
• VAT Returns: If VAT-registered, you must file quarterly returns, even if there were no taxable transactions.
• ESR Reports: If your activity falls under ESR scope, submit the annual notification and full report, including economic substance proof (like local employees and operational expenses).
• Immigration Card and Labour Card Renewals: These are essential for managing visas and work permits. Letting them expire can suspend your ability to hire or renew visas.
• Beneficial Ownership Register (UBO): Ensure your UBO records are updated and submitted as per UAE regulations.
• Anti-Money Laundering (AML) Compliance: If your branch deals with finance, consultancy, or real estate, you may need to register with goAML and meet AML reporting standards.

Failing to follow these steps could lead to fines or a suspended license. Using a compliance calendar and working with our PRO service experts in Dubai will help keep you on track and avoid penalties.

Branch vs. Other Business Structures

Pros for Setting Up a Branch Company in Dubai:

• Separate legal identity
• Broader range of business activities
• Can trade freely in the mainland

Cons for Opening Up a Branch Company in Dubai:

• May require local partner (for some activities)
• Setup cost can be higher

Final Thoughts

A branch office offers international companies a direct path into Dubai’s economy. It gives you full ownership, access to local markets, and continuity with your existing operations. But it also comes with responsibility, compliance, reporting, and clear oversight from regulators. With the right plan and support, you can set up with confidence.

Thinking about expanding into Dubai? Talk to our business setup consultants in Dubai and get clarity on every step—from licensing to launch. Let’s help you build your branch company the right way.

FAQ’s for Starting a Branch Office in Dubai