A UAE branch is your parent company standing in Dubai, liability included

A branch is not a company. It is the same legal person as the business that opened it, holding a UAE trade licence. Almost everything that surprises founders about this route — the size of the document pack, the tax treatment, the discovery that there is nothing to sell — follows from that one sentence, and most published material on branches buries it beneath a list of steps.

What follows is what a branch actually is, how it differs from a representative office and from a subsidiary, which two requirements were repealed and when, what the parent has to disclose to open one, how the corporate tax rules see the arrangement, and the circumstances in which a branch is the wrong container for what you are building.

A branch has no legal personality of its own, and that is the whole design

Under Federal Decree-Law No. 32 of 2021 on Commercial Companies — the current statute, in force since 2 January 2022 — a foreign company may carry on activity in the UAE through a branch or a representative office once it holds the appropriate licence. What that licence does not do is create anything new. There are no shares, no shareholders, no constitution of its own and no capital of its own.

The branch trades in the parent's name. Its contracts are the parent's contracts. Its debts are the parent's debts. Its bank balance, its receivables and its equipment are the parent's assets sitting in another jurisdiction. When a UAE court hears a claim arising out of a branch's work, the defendant named on the file is the foreign company.

That is sold as a feature — extend the company you already have, keep the trading history, keep the accreditations, keep the name. It is a genuine feature, and it is also the entire exposure. A subsidiary can fail without taking its parent down with it; a branch has no mechanism for that, because there is no second legal person for the failure to stop at. The same absence shows up in the running of it: a UAE branch is licensed in weeks and then cannot decide anything for itself follows that through the branch's first year.

The three structures people confuse, set against each other

Most enquiries arrive having been quoted for two of these three and told they amount to much the same thing. They do not resemble each other in any respect that matters.

The row that decides most files is the second one, and the row that decides most exits is the sixth.

A representative office may promote, and that is the end of the list

A representative office exists to make the parent visible here. It may market, research, meet people, gather information and act as a liaison point for the parent's overseas operation, and it may employ staff and hold premises.

It may not take revenue. It cannot issue an invoice, conclude a contract in its own right, import goods or bill a UAE customer for anything. Founders choose it because the quote is low, then land work in month four and find the office they licensed has no mechanism to charge for it. The choice at that point is a new licence and a new document pack, mid-deal, with a client waiting.

The test is not what the office is called. It is whether revenue appears anywhere in the next two years of the plan. If it does, a representative office is a detour with a fee attached.

The service agent requirement was repealed in 2020, and much of the published guidance still says otherwise

For years, a branch of a foreign company had to appoint a UAE national service agent — a person holding no equity and no management rights, contracted annually to act as the interface with government departments.

Federal Decree-Law No. 26 of 2020 removed that requirement along with the majority-ownership rule for onshore companies. The Commercial Companies Law was then replaced wholesale by Federal Decree-Law No. 32 of 2021, which carries the position forward. A branch of a foreign company appoints no national agent.

A second requirement went four years later. A bank guarantee had long been lodged with the Ministry for every foreign branch. Ministerial Resolution No. 138 of 2024, issued on 30 July 2024, abolished it. Branches opened before that date that lodged the guarantee should ask their bank to release it — the money is not returned to anyone who does not ask.

Both changes are still contradicted daily by article libraries written before 2021 and never revisited — occasionally by two pages of the same website. If a firm is quoting you for a service agent on a foreign branch, it is selling a product the law stopped requiring, and it is worth asking what else in its file is that old. Four UAE obligations you are still being sold collects the others that went the same way.

Recording a mainland branch means two counters, not one

A mainland branch is approved federally by the Ministry of Economy before the emirate's economic department issues the trade licence. The two steps run in sequence and each has its own document requirements, so the file is assembled once and presented twice.

The Ministry then sees the branch a second time. Under Ministerial Resolution No. 138 of 2024, a branch or representative office has one month from the date its licence is issued to apply to be recorded with the Ministry — which now carries the title Ministry of Economy and Tourism — and the Ministry's service card attaches a heavy administrative fine to missing that month. The recording file is short: the licence, a certified copy of the parent's commercial extract or official certificate, the parent's delegation of authority to the manager, certified and authenticated in its home country, and a letter from an audit firm on the Ministry's roll of auditors confirming it has been appointed to audit the branch's annual accounts; a representative office is spared that last letter. The entry lasts a year and is renewed, so a mainland branch keeps a renewal date with the Ministry as well as with the authority that licensed it.

A branch licensed inside a free zone is a different route. The zone authority licenses it, the entity type sits on the zone's own list as a branch of a foreign company, and the federal step above generally does not arise. Practice varies by zone, so ask the one you intend to use rather than reasoning from another one's process.

One thing the licence counter decides that the statute does not: which activities a branch may hold at all. A branch is confined to what the parent itself does — you cannot use a UAE branch to enter a line of business the parent is not already in — and licensing authorities narrow it further from there. Confirm your activity code is available through a branch before a single document is attested, because the discovery that it is not comes after the courier has been paid.

The parent's file is the application, and attestation governs the timetable

There is no such thing as a light branch file. Because the branch is the parent, the parent's own corporate history is what gets submitted. In practice that means:

• The parent's certificate of incorporation, or the equivalent extract from the commercial company authority in its home jurisdiction
• Its memorandum and articles of association
• A board resolution deciding to open the UAE branch, naming the activity and appointing the branch manager
• A power of attorney in favour of that manager, drafted against what the manager will actually need to sign here
• The parent's audited financial statements, commonly for the last two years
• Passport and identity documents for the branch manager
• A good standing or incumbency certificate, where the receiving authority asks for one
• An official certificate from the authority that incorporated the parent, stating the activity it carries on, which the Ministry asks for before it approves a mainland branch
• A no-objection letter from the manager's current sponsor, where the manager already holds a UAE residence visa through another employer

Every one of those foreign documents travels the same chain: notarisation where it was issued, authentication by that country's foreign ministry, legalisation by the UAE mission holding jurisdiction over the place of issue, attestation by MOFA here, then translation into Arabic by a legal translator licensed by the Ministry of Justice under Federal Decree-Law No. 22 of 2022.

That chain is strictly ordered, and no link can be attempted until the one above it has been completed — which is why the calendar for a branch belongs to notaries, foreign ministries and a consulate rather than to the licensing counter, and why the first three links happen in a country you have already left.

Three of the five links are performed abroad, and the two that are not cannot begin until the first three are done. A parent whose documents sit in three different jurisdictions is running three of these chains at once, and the file moves at the speed of the slowest one.

Two consequences are worth budgeting for. The UAE is not a party to the Apostille Convention, so an apostille completes the issuing country's half of the chain and nothing more — the UAE mission and MOFA still have to act, and the mission with jurisdiction is decided by where the document was issued, not by where your head office is. And MOFA charges its commercial rate per document, so the difference between attesting what the authority asked for and attesting a folder somebody thought might be useful is measured in thousands of dirhams. Settle the list in writing first. Our document attestation and legalisation page sets out the chain link by link.

The federal file wants the parent's activity certified; free zones want it described

Older checklists asked the parent for a report on everything it does. The federal file asks for something stricter. Before it approves a mainland branch, the Ministry wants an official certificate issued to the parent by the authority where it was incorporated, naming its legal form, its owners, its capital, its date of establishment and the activity it carries on — certified at home and taken through the same chain as every other foreign document. A report the parent writes about itself cannot stand in for it. Where the home jurisdiction's certificate of incorporation is silent on some of those points, the extract or certified statement that covers them has to be ordered before anything reaches a notary. Check that the activity it names is the one you mean to license here: a branch is confined to what the parent does, and this is the document that says what the parent does.

Nor is it a one-off. The Ministry's record of a branch runs a year at a time, and each renewal asks for an updated official certificate showing the parent's name, activity and legal form, together with a final account for the last financial year audited by an auditor approved to practise here. The home-state paperwork becomes an annual errand, and the parent's company secretary is better told that at the outset than in month eleven.

Free zones ask for the parent's own account of itself instead, or as well. Jafza asks a branch of an overseas company for a brief company profile and business plan, and SAIF Zone asks for a project summary. DIFC, where a branch is called a Recognised Company, goes further: its application asks for a short description of the parent's activities and the regions it operates in, then for the branch's intended activities, target markets, business model and the clients it means to serve. These documents are written by the applicant and sit outside the attested set on the lists we checked, so they cost nothing at MOFA. They are read, though, and a profile describing a wider business than the rest of the parent's file shows invites a question the file has no good answer to.

The licensing counter wants the manager's passport, and the bank wants the rest

On the manager's side, older checklists asked for a CV and personal bank statements alongside the passport. The licensing lists we checked ask for less. The Ministry's guidance asks for a copy of the manager's passport, a no-objection letter from the current sponsor where there is one, and a board resolution appointing the manager, and the recording step adds the parent's delegation of authority to the manager. Jafza asks for the manager's passport and UAE residence visa page, and for the parent to confirm in writing if the manager holds no UAE visa. SAIF Zone asks for passport copies of the owners and managers. None of those lists names a CV or a bank statement for the manager.

The requests have not gone away; they sit elsewhere. DIFC asks for a CV or short biography of every ultimate beneficial owner, and for recent bank statements from any individual funding the entity, so a manager who is also one of the parent's beneficial owners owes a CV at the licensing stage after all, and one funding the branch personally owes the statements as well. And the bank that opens the branch's account will often ask whoever is to sign on it for a CV and recent personal bank statements, alongside a company profile. In a branch, that signatory is frequently the manager the parent has just appointed.

So the older checklists were right to name those documents and, on the evidence of the current lists, wrong about who asks for them. Have the CV and the statements ready before the account application rather than after the licence. Neither takes long to produce, which is why they tend to be left until the bank asks — and a request that arrives after the licence is a delay the branch did not need.

Corporate tax treats the branch as the parent's permanent establishment

Under Federal Decree-Law No. 47 of 2022, a non-resident person with a permanent establishment in the UAE is a taxable person on the income attributable to that establishment. A licensed branch is the textbook case. The taxable person is the foreign parent — not the branch, which cannot be one — and what is taxed is the slice of the parent's profit that belongs to its UAE operation.

Three practical consequences follow, and they are the reason a branch is not the low-administration option it is sometimes sold as:

• The branch needs books that stand on their own. Attributing profit to a permanent establishment means treating it as though it were a separate business, which is exactly what it is not. That fiction has to be evidenced.
• Charges from head office to the branch get looked at. Management fees, cost recharges and interest between an entity and its own permanent establishment are not ordinary third-party transactions, and the transfer pricing documentation rules under Ministerial Decision No. 97 of 2023 sit behind them.
• Reliefs written for resident persons may not reach you. Small Business Relief is drafted around Resident Persons. Whether a non-resident taxed through a UAE branch can elect it is a question to put to the Federal Tax Authority, not one to assume in your favour because the numbers are small.

The rate architecture itself is the same one every UAE business faces — nil on taxable income up to AED 375,000 and 9% above it — but the base it applies to is an attribution exercise rather than a set of accounts. A UAE corporate tax position for a branch is genuinely more work than for a small subsidiary, not less.

A separate point, because it is regularly conflated: a domestic branch — a UAE company's branch in another emirate or on the mainland — is not a second taxable person either. Its results belong in its own parent's return. Which routes out of a single company leave you with one taxable person, and which hand you a related party you then have to deal with at arm's length, is worked through in four ways of expanding a UAE company.

A representative office is not automatically outside the tax net

The corporate tax law excludes from permanent establishment status a fixed place used solely for activities of a preparatory or auxiliary character. A representative office genuinely limited to promotion and information-gathering usually sits inside that exclusion.

The exclusion describes conduct, not licences. Where the people in that office negotiate terms, agree pricing or habitually play the principal role in concluding contracts that the parent then signs abroad, the argument that the activity is auxiliary becomes difficult to run — and the licence it was set up under does not answer the point. An office set up to avoid a taxable presence, and then quietly used to close deals, is the most expensive version of this structure available.

VAT looks at the person, not at the office

A branch is not a separate person for VAT any more than it is for corporate tax. Supplies made through it are the foreign company's supplies, and the enrolment obligation is assessed against that person.

What the branch does change is the parent's footprint. A fixed place of business in the UAE affects which set of VAT rules the parent falls under, and the thresholds that apply to a business established here are not the ones that apply to a business that is not. Whether a particular branch creates a fixed establishment is a facts question, and it is worth settling before the first invoice rather than at the first return.

Closing a branch does not close the liability behind it

A branch is wound down by cancelling its licence, clearing its obligations to the authority, settling staff entitlements and closing the establishment file. What that process does not do is extinguish what the branch did. Because the obligations were always the parent's, they survive the licence.

There is no veil to pierce, because there was never a veil. A UAE claimant with a judgment names the parent; the branch's local assets and bank balance are simply the nearest ones to reach. Whether that judgment can then be enforced against assets abroad turns on the enforcement position between the UAE and the parent's home jurisdiction — a separate question, and not one to be answered optimistically at the point of opening. Our company liquidation and closure page covers the exit mechanics.

You cannot sell a branch, which shapes the entry more than the exit

There are no shares. There is nothing to transfer, nothing to pledge to a lender, nothing to give a country manager as an incentive, and nothing an acquirer can buy short of buying the parent. A UAE business built inside a branch is disposed of by transferring assets and novating contracts one at a time, or not at all.

Converting later is not a conversion. It is a new entity, a new licence, a fresh attested document pack, a new bank account, staff visas moved across, and every contract signed in the branch's name assigned to the new company with each counterparty's consent. Firms do it, and it costs several times what choosing correctly at the start would have.

Where a branch is the wrong purchase

We open more of these files than we should, because the route gets recommended on the strength of a lower headline fee. It is the wrong instrument in every one of the following situations.

You want a liability firewall. This is the first and largest one. If part of the reason for a UAE entity is to keep UAE risk — a construction contract, a regulated activity, a large single client, an employment exposure — away from the group balance sheet, a branch does the opposite of what you are buying it for. Licence a mainland company or a free zone company instead.

Equity is anywhere in the plan. Selling the UAE business, bringing in a local partner, granting shares to the person running it, or raising money against it are all impossible in a structure that has no shares. If any of those is plausible within five years, the branch is the wrong container from day one.

The parent will not open its books. The file is the parent's file — constitutional documents, ownership chain, audited accounts, all attested and all read by the authority and then again by the bank. Groups that are unwilling or unable to produce that pack should not start down this route, and the point to establish it is before the first document goes to a notary.

The parent is young, dormant or thinly capitalised. A branch application asks a company to prove a trading history it may not have. A newly incorporated holding entity with no audited accounts is a weak applicant here and a much stronger shareholder of a new subsidiary.

Your activity is not on the branch list. Not everything the parent does abroad is licensable through a branch here, and trading in goods in particular is treated differently from services by economic departments. Verify the activity first.

A representative office is being offered as a cheap branch. It is not a smaller version of the same thing. It cannot invoice, and no amount of structuring around it changes that.

All you actually need is to bill a UAE customer. A great many overseas companies invoice UAE clients without any local entity at all. If nobody is stationed here, no premises are held here and the work is performed abroad, the honest first question is whether you need a UAE presence in the first place — and if the answer is no, the correct advice is to keep your money. Where you do have people here, that changes, and the permanent establishment analysis above is exactly why.

The real driver is one residence visa. A branch comes with a lease, an establishment card, payroll obligations, corporate tax filings and audited accounts attached to a foreign parent. If the actual requirement is residency for a founder, a small free zone entity is usually cheaper and always simpler.

The questions to settle before anything is attested

Four, in this order, and each one is cheaper to answer now than to discover later.

1. Is the exposure acceptable? The parent stands behind everything the branch does. If that answer is no, stop here and price a subsidiary.
2. Is the activity available through a branch, at the authority you intend to use? Get it in writing, with the activity code.
3. Can the parent produce the pack? Constitutional documents, board resolution, power of attorney and audited accounts — attested through the full chain and translated. If any one of those is unavailable, the route is closed regardless of budget.
4. Who is the taxable person, and who files? The answer for a branch is the foreign parent, and the compliance sits with a company that may never have filed anything in this jurisdiction.

The bank will ask most of the same questions again, in its own words and with its own tolerance for an ownership chain it cannot trace — which is a good reason to read our corporate bank account page before committing to a structure.

Send us the parent's jurisdiction, its activity, and whether revenue will be invoiced from the UAE, and our PRO and government liaison team will tell you which of the three structures fits — including, where it fits, the one that means you do not need us for a formation at all.

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