A UAE branch is an extension of the foreign parent — no separate legal entity. Parent company is fully liable for all branch obligations. Mainland registration: through MOEC (Ministry of Economy) with a UAE national local agent. Free zone branch: directly with the free zone authority. Branch income is subject to UAE CT as a permanent establishment. Branch registration takes 4–8 weeks.
UAE branch vs subsidiary — key differences
| Factor | Branch | Subsidiary (LLC or FZ-LLC) |
|---|---|---|
| Legal entity | Not a separate entity — extension of parent | Separate legal entity |
| Liability | Parent company fully liable | Liability limited to capital invested |
| Tax | Branch profits subject to UAE CT as PE | Subsidiary profits subject to UAE CT |
| Ownership | 100% parent (by definition) | Can have multiple shareholders |
| Registration | MOEC (mainland) or free zone authority | DED (mainland) or free zone authority |
| Audit | Annual audit required | Annual audit required (free zone mandatory; mainland if required) |
| Suitable for | Testing the market, professional services, banks | Long-term operations, multiple products, local market focus |
Registering a UAE branch of a foreign company
1. Prepare and attest parent company documents
The parent company must provide: Certificate of Incorporation, M&A or Articles of Association, board resolution to open a UAE branch, and parent financial statements (last year). All documents must be authenticated — notarised in the country of origin, then attested by the UAE embassy in that country, or apostilled for Hague Convention countries.
2. Appoint a UAE national local agent
For mainland MOEC branches, a UAE national local service agent (not a shareholder — a contracted individual) must be appointed. The agent receives a fixed annual fee (typically AED 5,000–15,000) and signs the branch registration on behalf of the foreign company. Free zone branches do not require a local agent.
3. Apply to MOEC for initial approval
Submit attested parent documents, local agent contract, proposed branch manager details, and activity description to the Ministry of Economy. Initial approval: 2–3 weeks.
4. Register with the DED (or emirate authority)
After MOEC initial approval, register the branch with the DED in the emirate where the branch will operate. Obtain the UAE trade licence for the branch.
5. Open bank account and apply for visas
Same process as a new company — establishment card, investor/director visa, and bank account.
UAE Corporate Tax for UAE branches
A UAE branch of a foreign company creates a Permanent Establishment (PE) in UAE — making the branch’s income attributable to UAE subject to UAE Corporate Tax:
- Taxable income: Branch profits attributable to UAE activities — calculated on an arm’s length basis. Expenses directly incurred for the branch (staff, office, marketing) are deductible.
- Head office charges: The foreign parent can charge the UAE branch for management services, IP licensing, or support — but these must be at arm’s length and properly documented. Excessive head office charges that shift profits out of UAE will be challenged by the FTA.
- CT rate: 9% above AED 375,000 taxable income. Small Business Relief available if UAE-sourced revenue is below AED 3M.
Registering a UAE branch of your foreign company?
We handle MOEC branch registration, local agent appointment, document attestation, and CT advice. Fixed fee.
Frequently asked questions
Is a UAE branch cheaper than setting up a new subsidiary?
Initially — branch registration fees are similar to LLC fees, but you avoid nominal capital requirements and MOA drafting. However, the ongoing document attestation cost (parent financial statements and board resolutions must be attested annually for the branch renewal), combined with the local agent fee (AED 5,000–15,000 per year), can make a branch more expensive than a mainland LLC over 3–5 years.
Does a UAE free zone branch need a local agent?
No — free zone branches do not require a UAE national local agent. Free zone branches are registered directly with the free zone authority (DMCC, JAFZA, DIFC, etc.) and follow the same process as free zone company registration, except the parent company is the sole ‘shareholder’. Parent documents (attested) are required.
Can a UAE branch become a subsidiary later?
Yes — but it requires closing the branch and incorporating a new subsidiary (LLC or FZ-LLC). There is no direct conversion mechanism. Contracts, bank accounts, and licences must be transferred or novated. If the branch has built significant commercial relationships, the transition needs careful planning to avoid disruption.
Are UAE branch profits taxed in both UAE and the parent's home country?
Potentially yes — UAE CT applies on branch profits attributable to UAE (9% above AED 375K). The parent’s home country may also tax the branch profits (as part of the parent’s worldwide income). If UAE has a double taxation treaty with the parent’s home country, the UAE CT paid by the branch may be credited against the parent’s home country tax. Seek advice from a tax advisor familiar with the specific treaty.