Branch Office Setup Guide for Foreign Companies

Dubai, with its strategic location, booming economy, and investor-friendly environment, has become a top destination for foreign businesses aiming to expand into the Middle East. One of the most popular ways to enter the UAE market is through a branch office setup in Dubai. A branch office enables a foreign company to operate legally in Dubai while maintaining 100% ownership and retaining full control over operations.

In this detailed guide, we explore how to set up a foreign branch in Dubai, covering everything from legal structure and registration requirements to timelines, benefits, and costs.

A branch office is an extension of a foreign parent company that operates under the same name and business activities. Unlike a subsidiary, a branch office does not have a separate legal identity—it is fully owned and controlled by the foreign entity. It must carry out the same services or activities as its parent company.

For foreign businesses seeking Dubai business setup, opening a branch offers a fast-track entry into the UAE market without the need to establish a new company.

Establishing a branch office provides numerous advantages:

• 100% foreign ownership is permitted (unlike mainland LLCs, which require local shareholding).
• Enables direct business activity and revenue generation in Dubai.
• No corporate tax (except for oil and gas sectors and foreign banks).
• Allows access to local government tenders and contracts.
• Easier and faster than setting up a subsidiary.
• Enhances brand visibility and trust in the UAE market.

For companies seeking business expansion in Dubai, a branch structure offers both flexibility and commercial benefit.

Understanding the legal structure for a branch office in the UAE is crucial. A branch office:

• It is not a separate legal entity.
• It is legally linked to the foreign parent company.
• Requires a local service agent (LSA)—a UAE national or local company acting as a sponsor (for administrative purposes only, with no ownership).
• Must adhere to Dubai Department of Economy and Tourism (DET) regulations.
• Can operate in both mainland Dubai and specific Free Zones.

This structure allows the parent company to assume full liability and retain control while operating locally under Dubai law.

A branch office may engage in activities identical to those of its parent company, which typically include:

• Professional services (consulting, legal, engineering, etc.)
• Trading and commercial activities
• IT and technology services
• Industrial and manufacturing representation
• Healthcare and education services

However, some restricted activities require special government approvals or may not be permitted for branches, such as insurance, banking, or private security.

If you’re wondering how to open a branch office in Dubai, here’s a simplified step-by-step process:

1. Appoint a Local Service Agent (LSA)

Although the foreign company retains full ownership, an LSA is required for documentation and government liaison. The LSA has no operational or financial role.

2. Choose a Trade Name

Reserve the same name as the parent company or an approved variation. The trade name must align with your licensed business activity.

3. Obtain Initial Approval from DET

Apply with required documents (parent company license, MoA, board resolution, passport copies, etc.) to obtain initial permission.

4. Secure Approval from the UAE Ministry of Economy

This includes applying for a foreign company branch registration in the UAE through the Ministry, which issues a foreign commercial register certificate.

5. Lease Office Space in Dubai

A physical office is mandatory for a foreign company set up in Dubai. Ejari (tenancy contract) must be submitted with the final license application.

6. Finalize Licensing from DET

After meeting all conditions and receiving Ministry approvals, the DET issues the Dubai branch license for foreign company operations.

7. Register with the Relevant Authorities

Complete immigration, labor, and VAT registration, if applicable. This enables hiring employees and conducting legal business in Dubai.

Here are the requirements for branch office setup in the UAE, including necessary documentation:

• Parent company’s Certificate of Incorporation
• Memorandum & Articles of Association
• Board resolution to open a branch in Dubai
• Power of Attorney for the company’s authorized representative
• Audited financial statements (last two years)
• Copy of the trade name reservation
• Local Service Agent agreement
• Tenancy contract (Ejari) for office premises
• Passport copies of directors and representatives
• Approvals from regulatory authorities (if required)

All documents must be notarized and legalized in the parent company’s home country and the UAE Embassy.

Branch offices can be established in the Dubai Mainland or within Dubai Free Zones. The right choice depends on your goals:

Mainland Dubai Branch Office

• Can operate anywhere in Dubai and the UAE.
• Can trade with the government and local clients.
• Requires a Local Service Agent.
• Follows regulations from the DET and the Ministry of Economy.

Free Zone Branch Office

• Operates within the Free Zone or internationally.
• Cannot conduct direct business in mainland Dubai without a distributor.
• Regulated by the respective Free Zone authority.
• No need for a Local Service Agent.

For broader market access, the Dubai mainland branch setup is preferred. For specific industries like finance, media, or tech, Free Zones like DIFC, DMCC, or DSO may be more suitable.

The UAE branch office setup cost varies depending on multiple factors, such as business activity, location (mainland vs Free Zone), size of office, and government fees. Here’s a general breakdown:

Item Estimated Cost (AED)

Trade Name Reservation 620 – 1,000

Initial Approval & Licensing 10,000 – 25,000

Ministry of Economy Approval 15,000 – 20,000

Local Service Agent Fees 8,000 – 15,000 (annually)

Office Lease (Ejari) 15,000 – 40,000/year

Document Attestation & Legalization 5,000 – 10,000

Translation & Administrative Fees 2,000 – 5,000

Total Estimated Cost 55,000 – 110,000+

Note: These figures are indicative and may vary. Consulting a business setup expert ensures accurate budgeting.

On average, the branch office setup in Dubai takes about 3 to 6 weeks, depending on how quickly documents are prepared and approvals are granted.

While setting up a branch office offers many benefits, there are challenges to consider:

• All activities must match the parent company’s scope.
• Regulatory requirements vary by industry.
• Delays may occur if documents are not properly attested or translated.
• Visa quotas and labor permits may be limited in certain Free Zones.
• Failure to comply with local laws can lead to fines or license suspension.

Working with experienced consultants can help avoid pitfalls and streamline the foreign company branch registration process in the UAE.

Why Work with Business Setup Consultants?

Partnering with professionals like Dahhan Business Services ensures a hassle-free experience. Their services include:

• Legal documentation and attestation
• Trade license application and approvals
• Local service agent arrangement
• Office space assistance
• PRO and visa services
• Ongoing business support

This reduces risk, saves time, and ensures full compliance with Dubai’s legal and economic regulations.

The branch office setup in Dubai is one of the most efficient and cost-effective ways for foreign companies to enter the UAE market. With full ownership, minimal tax liability, and access to local business opportunities, it’s a smart move for global companies looking to grow their footprint in the Middle East.

Whether you’re a consultancy firm, trading business, or multinational corporation, understanding the legal structure for a branch office in the UAE, the required steps, and the costs involved will help you make a well-informed decision. With the right support, setting up your branch in Dubai can be smooth, strategic, and successful.

Need Expert Help?

Contact Dahhan Business Services today to get professional guidance and tailored solutions for your foreign company setup in Dubai.

1. What is a branch office in Dubai?

A branch office is an extension of a foreign parent company that operates in Dubai under the same name and business activities. It is not a separate legal entity and is 100% owned by the parent company.

2. Can a foreign company own 100% of a branch in Dubai?

Yes, foreign companies can fully own their branch office in Dubai. However, a local service agent (LSA) is required for mainland setup, though they hold no ownership or control.

3. How long does it take to set up a branch office in Dubai?

Typically, the process takes 3 to 6 weeks, depending on document preparation, approvals from the Ministry of Economy, and licensing from local authorities.

4. What are the main requirements for a branch office setup in Dubai?

You need a trade name reservation, local service agent agreement, Ministry of Economy approval, office lease (Ejari), notarized parent company documents, and DET licensing.

5. What is the cost of setting up a foreign branch in Dubai?

Setup costs range from AED 55,000 to AED 110,000+, depending on office location, legal services, document attestation, and government fees.

6. Can a branch office operate anywhere in the UAE?

Yes, if established in the Dubai Mainland, a branch office can operate across the UAE. Free Zone branches are limited to the Free Zone or international markets unless using a local distributor.

Ready to expand your business into one of the world’s most dynamic markets? At Dahhan Business Services, we specialize in guiding international companies through the full branch office setup in Dubai process. From trade name reservation and legal documentation to Ministry of Economy approvals and license issuance, we handle everything with precision and speed. Our experts ensure you meet all requirements while avoiding costly delays or compliance issues. Whether you’re entering the UAE for the first time or scaling your global operations, we’re here to make your Dubai expansion smooth and successful.
Contact us today for a free consultation and start your journey toward opening a branch in Dubai—seamlessly, legally, and with confidence.