How to Set Up a Company or Branch for Expanding Business in the UAE?

Written By Akshaya Ashok, Reviewed By Nouphal P C

Published on 07/03/2025

The UAE is a global hub for business, offering a dynamic environment for company and branch formation. Whether you’re looking to establish a mainland company, a free zone entity, or a branch office, understanding the process is crucial for success. The UAE’s strategic location, tax benefits, and business-friendly policies make it an ideal destination for entrepreneurs and corporations. Company and branch formation in the UAE can open doors to new markets, enhance operational efficiency, and provide access to a diverse talent pool. However, navigating the legal and regulatory landscape requires careful planning and expertise. This blog provides a detailed guide to company and branch formation in the UAE, covering business structures, legal forms, steps, compliance, and more.

Why do you Need a Local Agent for your UAE Branch Office?

For branch offices established in the UAE mainland, the appointment of a Local Service Agent (LSA) is mandatory. The LSA must be a UAE national or a company wholly owned by UAE nationals. It is important to note that the LSA does not hold any ownership stake in the branch office and is not involved in its management or operations. Their role is primarily administrative, assisting with government-related procedures and ensuring compliance with local regulations.

What are the Business Structures for Company and Branch Formation?

Mainland Companies

• Operate anywhere in the UAE.
• Require a local Emirati sponsor (51% ownership).
• Ideal for businesses targeting the local market.

Free Zone Entities

• Offer 100% foreign ownership.
• Provide tax exemptions and customs benefits.
• Suitable for businesses focused on international trade.

Offshore Companies

• Primarily used for holding assets or international trading.
• Cannot conduct business within the UAE.
• Offer privacy and tax advantages.

What are the Legal Forms of Business Entities for Company and Branch Formation?

• Limited Liability Company (LLC): The most common structure for mainland businesses.
• Branch Office: An extension of a parent company, operating under its name.
• Representative Office: Limited to promotional activities and market research.

What are the Steps for Company and Branch Formation in the UAE?

• Selecting the Appropriate Jurisdiction: Choose between mainland, free zone, or offshore.
• Choosing a Business Activity: Define your business activities to determine the correct license type.
• Registering the Trade Name: Reserve a unique trade name with the relevant authority.
• Obtaining Initial Approvals: Secure approvals from the Department of Economic Development (DED) or free zone authority.
• Drafting Legal Documents: Prepare the Memorandum of Association (MOA) or Articles of Association (AOA).
• Securing a Physical Office Space: Obtain a tenancy contract or flexi-desk agreement.
• Finalizing Registration and Licensing: Submit the final application and pay the required fees.

What to Know for Opening a Branch or Representative Office in the UAE?

When setting up a branch or representative office in the UAE, it is essential to understand the legal and procedural requirements. A branch office operates as an extension of the parent company, allowing it to conduct business activities similar to those of the parent entity. On the other hand, a representative office is restricted to non-commercial activities, such as market research or promoting the parent company’s services. Both structures require compliance with UAE regulations, including documentation and the appointment of specific agents, depending on the location of the office.

What is the Difference Between UAE Branch Office and Representative Office?

The scope of activities for branch and representative offices in the UAE differs significantly. A branch office is permitted to engage in the same commercial activities as its parent company, allowing it to conduct business operations, enter into contracts, and generate revenue. In contrast, a representative office is limited to non-commercial activities, such as promoting the parent company’s products or services, gathering market information, and facilitating communication with potential clients. This distinction is crucial when deciding which structure best suits the company’s objectives in the UAE.

What Documents are Required for Opening a Branch or Representative Office in the UAE?

Certain documents must be prepared and submitted to establish a branch or representative office in the UAE. 

• The parent company’s incorporation documents, which verify its legal existence and registration. 
• A board resolution approving the branch formation is required, demonstrating the parent company’s consent to the expansion. 
• Passport copies of the designated branch manager must also be provided, as this individual will oversee the operations of the office in the UAE.

What Rules and Regulations Do You Need to Follow for Your UAE Office?

• Economic Substance Regulations (ESR): Ensure compliance if conducting relevant activities.
• Anti-Money Laundering (AML) Compliance: Implement AML policies and procedures.
• Ongoing Reporting and Auditing: Submit annual financial statements and audits as required.

What to consider when it comes to taxation and finance in the UAE?

• Corporate Tax Overview: The UAE introduced a 9% corporate tax in 2023, with exemptions for free zone businesses.
• Value Added Tax (VAT): Register for VAT if annual turnover exceeds AED 375,000.
• Profit Repatriation: Free zones allow 100% profit repatriation.

What are the Employment and Visa Processes in the UAE?

• Workforce Recruitment: Hire employees in compliance with UAE labor laws.
• Visa Procedures: Apply for employee visas and work permits through the relevant authority.

For getting detailed information on Employment Visas, check on this page: Resident and Employment Visa Services in UAE

Conclusion

Establishing a company or branch in the UAE is a strategic move that can unlock immense growth opportunities. However, the process involves multiple steps, from selecting the right jurisdiction to ensuring compliance with local regulations.

For seamless company and branch formation services, trust Reyson Badger. Our team of experts will guide you through every step, ensuring a hassle-free experience. Contact us today to start your journey in the UAE!

Written By

Akshaya Ashok

Akshaya Ashok is a content writer specializing in creating content focused on accounting and auditing. With over two years of experience, she has developed expertise in crafting professional content for the financial sector.