For international companies looking to expand their footprint into the lucrative Middle East market, the UAE offers a strategic and stable base. One of the most effective ways for a foreign company to establish a presence without creating a separate legal entity is by opening a **branch office**. A branch office is considered an extension of the parent company and is permitted to conduct business activities similar to those of its parent. [1]
Unlike a subsidiary, a branch office is not a separate legal entity. It is 100% owned by the parent company and operates under its name and brand. This structure is ideal for established companies that want to promote their products and services, enter into contracts, and conduct business operations directly in the UAE market.
This guide provides a detailed overview of the process of opening a branch office of a foreign company in the UAE for 2025. We cover the legal requirements, the setup process, and the key considerations. T4me offers specialized services to help foreign companies navigate this process and establish their presence in the UAE smoothly and efficiently.
Key Features of a Branch Office
- 100% Foreign Ownership: The branch is fully owned by the parent company.
- Legal Extension of Parent: It is not a separate legal entity and carries out its business under the name of the parent company.
- Scope of Activities: A branch office can engage in commercial activities similar to its parent company, including entering into contracts and earning revenues in the UAE.
- Local Service Agent (LSA): A branch office of a foreign company is required to appoint a UAE national or a company wholly owned by UAE nationals as its Local Service Agent (LSA).
The Role of a Local Service Agent (LSA)
The LSA does not hold any shares in the branch office and has no rights to participate in the management or profits of the business. The role of the LSA is primarily to act as a liaison with government departments and to ensure that the branch office complies with all local regulations. The relationship between the foreign company and the LSA is governed by a formal service agent agreement.
How to Set Up a Branch Office in the UAE: Step-by-Step
- Appoint a Local Service Agent: The first step is to identify and appoint a reliable UAE national or a UAE-owned company to act as your LSA. This is a critical relationship, and it is important to choose a reputable partner.
- Trade Name and Initial Approval: Apply for a trade name and obtain initial approval from the Department of Economic Development (DED) in the chosen emirate.
- Parent Company Document Attestation: A set of corporate documents from the parent company must be legally translated into Arabic and attested by the UAE Embassy in the country of origin and the Ministry of Foreign Affairs (MOFA) in the UAE. These documents typically include:
- Certificate of Incorporation
- Memorandum and Articles of Association
- Board Resolution to open the branch office
- Power of Attorney in favor of the branch manager
4. Ministry of Economy Approval: Submit the attested documents and the LSA agreement to the UAE Ministry of Economy for approval.
5. DED License Issuance: Once the Ministry of Economy approval is obtained, submit all documents to the DED to receive the final commercial license.
6. Office Lease and Registration: Secure a physical office space and register it with the relevant authorities (e.g., Ejari in Dubai).
How T4me (t4me.com) Can Help You Open Your Branch Office
The process of opening a branch office involves significant legal and administrative work, particularly the attestation of parent company documents. T4me provides an end-to-end service to manage this entire process for you.
Our services include:
- LSA Appointment: We can introduce you to reliable and trustworthy Local Service Agents.
- Document Attestation: We manage the entire attestation process for your parent company documents, from your home country to the final MOFA attestation in the UAE.
- Ministry and DED Approvals: We handle all submissions and liaison with the Ministry of Economy and the DED.
- Complete Setup Solution: We provide a one-stop solution that covers all aspects of the setup, from licensing to visa processing for the branch manager and staff.
Frequently Asked Questions (FAQ)
1. Can a branch office conduct any business activity?
A branch office can only conduct the activities that are listed on its commercial license, which must be similar to the activities of the parent company.
2. Is a branch office subject to UAE Corporate Tax?
Yes, a branch office is considered a permanent establishment of the foreign parent company in the UAE and is therefore subject to the UAE Corporate Tax on its profits.
3. What is the difference between a branch office and a representative office?
A representative office is only allowed to promote the products and services of its parent company. It cannot earn revenues or enter into contracts in the UAE. A branch office can conduct full-fledged business operations.
4. Does the LSA have any liability for the branch office?
No, the LSA is not financially liable for the business of the branch office. The parent company is fully liable for the activities of its branch.
5. How long does it take to open a branch office?
The process can take several weeks to a few months, largely depending on the time it takes to get the parent company documents attested.
Conclusion: Your Direct Gateway to the UAE Market
Opening a branch office is an excellent way for established foreign companies to enter the UAE market directly, maintain full ownership and control, and build a strong operational presence. It allows you to leverage your existing brand and business model while tapping into the vast opportunities of the region.
With the right partner to guide you through the setup process, you can establish your branch office efficiently and in full compliance with UAE law, setting the stage for successful business growth.
Contact T4me (t4me.com) today for a detailed consultation on opening a branch office of your company in the UAE. Let our expertise pave your way to a successful market entry.
References
[1] U.AE. “Branch of a foreign company.” u.ae, 2023, https://u.ae/en/information-and-services/business/business-forms-in-the-uae/branch-of-a-foreign-company.