Opening a UAE branch of a foreign company: registration and corporate tax

Many companies from the UK, Europe, North America and Australia enter the UAE through a branch of the parent company rather than a new subsidiary. A branch can be quicker to explain to head office, but it brings its own registration, audit and tax obligations. This guide sets out the rules, drawing on Ministerial Resolution No. 138 of 2024, the Federal Tax Authority (FTA) and PwC's Worldwide Tax Summaries.

What a branch is

A branch is not a separate legal entity. The foreign parent is fully liable for the branch's debts, contracts and regulatory obligations. A UAE subsidiary, by contrast, is a separate company incorporated under UAE law.

How a branch is registered

Ministerial Resolution No. 138 of 2024 on the Controls and Procedures for Registering Branches and Representative Offices of Foreign Companies was issued on 30 July 2024 and replaced Ministerial Resolution No. 377 of 2010. As summarised by Afridi & Angell, the main steps are:

1. Obtain initial approval from the Ministry of Economy. The approval is valid for eight months.
2. Obtain a licence from the local licensing authority under its own procedures.
3. Apply to the Ministry for the registration certificate within one month of the licence being issued.

Other points to plan for:

• Each additional branch or office must be licensed and registered separately.
• The registration certificate is valid for one year and is renewed within one month before it expires, with audited accounts of the branch.
• The parent's documents must be certified and attested, translated into Arabic and attested by the Ministry of Justice.
• Each branch must appoint a UAE-licensed auditor for a one-year term, renewable for up to six consecutive financial years, with the audit partner changing after three financial years.
• The AED 50,000 bank guarantee that was previously required has been removed.
• All applications are filed through the Ministry's online platform.

How corporate tax applies to a branch

• A branch of a non-resident person may be a permanent establishment (PE) in the UAE, and the income attributable to it may be subject to UAE corporate tax.
• The UAE definition of a PE is aligned with the OECD Model Tax Convention. A fixed place of business, or a person who habitually concludes or negotiates contracts on the company's behalf, can create one. A fixed place used only for preparatory or auxiliary activities is not a PE.
• Corporate tax is charged at 0% on taxable income up to AED 375,000 and 9% above that.
• The UAE has no branch profits tax, and profits repatriated from a branch to its head office are not subject to withholding tax.

Registration deadlines with the FTA

FTA Decision No. 3 of 2024, effective from 1 March 2024, sets the corporate tax registration deadlines:

• A non-resident person with a PE in the UAE on or after 1 March 2024 must register within six months of the PE coming into existence.
• A UAE subsidiary, as a resident juridical person, must register within three months of its incorporation.
• A foreign company that is effectively managed and controlled in the UAE is treated as resident and must register within three months of the end of its financial year.

Returns are due within nine months of the end of each tax period.

Branch or subsidiary

• Liability: a branch exposes the parent to all of its obligations; a subsidiary limits liability to the subsidiary's own assets.
• Audit: a branch must appoint a UAE-licensed auditor under Resolution No. 138 of 2024.
• Tax deadlines: six months for a PE, three months for a new subsidiary.
• Free zone 0%: a branch registered in a free zone can be a Qualifying Free Zone Person if it meets every condition.
• Small Business Relief: available only to resident persons, so it is relevant to a subsidiary rather than a branch of a non-resident. See our Small Business Relief guide.
• Home country: the parent's own country will also tax or exempt branch profits under its own rules, so the choice should be checked from both sides.

What to do

• Decide early whether a branch or a subsidiary suits the parent's liability, audit and tax position.
• Start document attestation and translation in the home country before applying.
• Diarise the one-month Ministry registration window, the annual renewal and the FTA registration deadline.
• Keep separate accounts for the branch so that the income attributable to it can be supported.

Our company setup and PRO, corporate tax and audit readiness services cover branch registration, tax registration and annual compliance.

Sources

• Afridi & Angell: Ministerial Decision on Registration of Branches and Representative Offices of Foreign Companies
• Kayrouz & Associates: How do foreign companies register a branch in the UAE in 2026?
• Federal Tax Authority: New decision on specified timeframes for corporate tax registration
• PwC: FTA Decision No. 3 of 2024 on registration timelines
• Federal Tax Authority: Corporate tax returns within nine months of the end of the tax period
• PwC Worldwide Tax Summaries: UAE branch income
• PwC Worldwide Tax Summaries: UAE corporate residence
• PwC Worldwide Tax Summaries: UAE taxes on corporate income

This page gives general information as at the date shown and is not advice for your specific situation. Rules in other countries are summarised for orientation; your home-country position should be confirmed before you act.