When a foreign company wants to establish a presence in the UAE, choosing the right ownership structure is one of the first decisions its directors need to make. A UAE subsidiary, branch, and representative office each have different legal responsibilities, licensing requirements, and implications for the parent company.
For a subsidiary with a corporate shareholder, the process involves more than registering a new company. The parent must provide the required corporate documents, obtain the necessary attestations, disclose its ownership structure, and prepare for the UAE bank’s due diligence checks.
At Exactitude Business Services, we support overseas companies with UAE business formation, documentation, and related compliance requirements. This guide explains what parent companies, directors and finance teams should consider before starting the process.
The Short Answer for Parent Companies
A foreign company has three main ways to enter the UAE:
- A subsidiary: a new UAE company, owned by the parent, with its own legal personality.
- A branch: an extension of the parent that carries on the parent’s activity in the UAE under the parent’s name.
- A representative office: a limited presence for market study and liaison, with no trading.
Each can sit on the mainland or in a free zone. In every case, the parent’s documents must be legalised at home and attested for UAE use, and banks will ask who ultimately controls the group.
Subsidiary, Branch or Representative Office?
A subsidiary
A subsidiary is a separate UAE company, such as a mainland LLC or a free zone company, with the parent as its corporate shareholder.
- Liability generally stays inside the UAE company, within its company form.
- It can hold any activity its license allows, including activities the parent does not carry out.
- It can bring in local partners or other investors later.
- It is a UAE resident for Corporate Tax and is taxed on its own income.
A branch
A branch is not a separate legal person. Under the UAE Commercial Companies Law (Federal Decree-Law No. 32 of 2021), the branch is treated as the foreign company’s domicile for its UAE activity, so the parent answers for what the branch does.
- A branch may carry out only the activity named in its license.
- Other than representative offices, branches must keep an independent balance sheet and profit and loss account, appoint a UAE-registered auditor and give the authorities their final accounts each year, together with the parent’s final accounts.
- On the mainland, Ministerial Decision No. 138 of 2024 sets the route: initial approval from the Ministry of Economy (valid eight months), a license from the emirate’s licensing authority, then entry in the Ministry’s register of foreign companies within one month of the license. Registration is renewed every year with audited final accounts.
A representative office
The Commercial Companies Law limits a representative office to studying markets and production capabilities, without any commercial activity. It suits a parent that wants to test the market before investing. It cannot invoice UAE customers.
Subsidiary vs branch vs representative office at a glance
- Legal person: Subsidiary: separate UAE company. Branch: part of the parent. Representative office: part of the parent.
- Who is liable: Subsidiary: the subsidiary, within its company form. Branch: the parent company. Representative office: the parent company.
- Activities: Subsidiary: any licensed activity. Branch: only the licensed activity. Representative office: market study and liaison only.
- Accounts: Subsidiary: its own books and financial statements. Branch: separate balance sheet, UAE auditor, and annual accounts. Representative office: lighter, but renewal papers still apply.
- Corporate Tax: Subsidiary: resident person. Branch: permanent establishment of the parent. Representative office: usually no taxable presence if only preparatory work.
For groups that plan to trade, hire and contract locally, a subsidiary is usually cleaner. A branch can suit a parent whose contracts or regulatory license must stay with the parent.
Mainland or Free Zone for a UAE Subsidiary of a Foreign Company
Mainland subsidiary
A mainland subsidiary is licensed by the emirate’s economic department, such as the Department of Economy and Tourism in Dubai. It can trade directly across the UAE and bid for local contracts. Most activities allow 100% foreign ownership, but some activities with strategic impact still have conditions, so check your activity first. See our mainland company formation in Dubai page.
Free zone subsidiary
A free zone subsidiary, often an FZCO or FZE, is licensed by the free zone authority. It suits regional headquarters, international trade and service companies whose clients are mostly outside the UAE. Many free zones also register branches under their own rules. Compare zones on our free zone business setup page.
The deciding questions are simple: will you sell to UAE customers directly, do you need premises such as a warehouse, and how many visas will you need?
Corporate Shareholder Documents UAE Authorities Ask For
The exact list depends on the authority, but corporate shareholder documents in the UAE usually include:
- Certificate of incorporation (or registration) of the parent company.
- Memorandum and articles of association, or the equivalent constitutional documents.
- Board resolution of the parent approving the UAE subsidiary or branch, naming the UAE manager or authorised signatory and setting out the share capital.
- Valid trade license or registry extract of the parent, where the home country issues one.
- Certificate of good standing or incumbency, where the authority or bank asks for it.
- Power of attorney for the person who will sign on the parent’s behalf in the UAE.
- Register of shareholders and directors and an ownership chart up to the ultimate beneficial owners.
- Passport copies and photos of the manager, directors, and beneficial owners.
IFZA, for example, asks for a board resolution notarised at home and attested by the UAE Embassy, and accepts documents in English or Arabic.
For a mainland branch, Ministerial Decision No. 138 of 2024 asks for an official certificate showing the parent’s name, legal form, shareholders, capital, date of establishment and activity, plus the parent’s decision approving the branch. Documents in a foreign language must be translated into Arabic by a certified translator in the UAE.
Getting Foreign Documents Accepted: Legalisation and MOFA
Is an apostille enough?
No. The UAE is not a party to the Hague Apostille Convention, and it does not appear in the Hague Conference status table. An apostille from the parent’s home country does not, by itself, make a document usable in the UAE.
The usual chain for documents issued outside the UAE
The UAE Ministry of Foreign Affairs describes this order:
- Home-country steps. The document is notarised or certified, then legalised by the foreign ministry of the country that issued it. In the UK, for example, this is the FCDO.
- UAE mission. The UAE Embassy or Consulate in that country attests the document.
- MOFA in the UAE. The original is then attested by the UAE Ministry of Foreign Affairs through its website or app.
Some countries add extra steps, so confirm your home-country route first. Our MOFA attestation guide explains the UAE stages in detail.
Practical rules that save weeks
- Sign the board resolution and power of attorney before a home-country notary.
- MOFA states that laminated documents cannot be attested.
- Order extra certified originals. Banks often want their own attested set.
- Check names and registration numbers match across every document first.
Our attestation and legal translation services team prepares the corporate file and guides each stage of the chain.
Ultimate Beneficial Owners: Looking Through the Parent
A corporate shareholder does not end the ownership trail. Under Cabinet Decision No. 109 of 2023, which applies to mainland and commercial free zone entities, the beneficial owner is the natural person who owns or controls 25% or more of the shares or voting rights, directly or through a chain of companies.
- If no one meets the 25% test, the person who controls the company by other means is treated as the beneficial owner.
- If no such person is found, the senior manager is treated as the beneficial owner.
- The UAE entity must keep a beneficial owner register and a register of partners or shareholders, and report changes to the registrar.
Prepare a clear structure chart that shows how control works.
Corporate Tax: Where Your UAE Entity Is Resident
A subsidiary is a UAE resident
Under the Corporate Tax Law (Federal Decree-Law No. 47 of 2022), a company incorporated in the UAE, including a free zone person, is a resident person. It is taxed on its worldwide income at 9% on taxable income above AED 375,000. A free zone subsidiary pays 0% only on qualifying income, and only if it meets the Qualifying Free Zone Person conditions.
A new UAE company incorporated on or after 1 March 2024 must apply for Corporate Tax registration within three months of incorporation.
A branch is a permanent establishment
A branch of a foreign company is usually a permanent establishment of the parent. The parent is taxed in the UAE on the income attributable to that branch, and the registration window is six months from the date the permanent establishment exists.
The law also treats a foreign company that is effectively managed and controlled in the UAE as a UAE resident. Boards that meet in the UAE should take advice in both countries.
Dividends and group payments
The UAE withholding tax rate on UAE-sourced income paid to non-residents is currently 0%. Home-country rules still apply.
Related-party records
Payments between the subsidiary and its parent, such as management fees, loans and recharges, must follow the arm’s length principle. A UAE entity with revenue of AED 200 million or more, or in a group with consolidated revenue of AED 3.15 billion or more, must also keep a master file and local file.
Our corporate tax and VAT services and accounting and bookkeeping teams keep these records in order from day one.
Bank KYC When the Owner Is a Company
A UAE subsidiary of a foreign company can apply for a UAE business account, but the bank’s review is deeper than for an individual owner.
What banks typically review
- The full ownership chain up to every beneficial owner.
- Attested parent documents and the parent’s latest financial statements.
- The UAE business plan: activity, customers and expected volumes.
- Transaction corridors: countries and currencies.
- Signatories and substance: who operates the account, and the UAE office and staff.
What we do, and what we do not do
We prepare your bank file and introduce you to suitable UAE banks. Each bank runs its own KYC and anti-money laundering review and decides. No consultant can promise approval, and accounts are not opened online or by us. Read more in our guide on opening a corporate bank account in the UAE for foreign investors or see our corporate bank account opening support.
Step-by-Step Plan for a Corporate Shareholder
- Scoping call: structure, jurisdiction, activity and visas.
- Name and initial approval from the licensing authority.
- Parent document pack: board resolution, power of attorney and corporate documents, notarised.
- Legalisation and attestation, then translation where required.
- Application preparation for the parent’s authorised signatory.
- License issued by the licensing authority.
- Registrations: Corporate Tax, VAT where the AED 375,000 threshold applies, and the beneficial owner register.
- Visas, office, and bank introduction. The bank decides.
Common Mistakes Parent Companies Make
- Choosing a branch by default. It puts the parent behind every UAE contract.
- Relying on an apostille. UAE attestation is still needed.
- A vague board resolution. Name the entity, the manager, and the share capital.
- Starting attestation late. It is usually the longest stage.
- No UBO chart. Banks pause files when control is unclear.
What a Subsidiary Project Feels Like
As the finance lead of an overseas group, my first worry was liability. I assumed a branch was simplest. Once we compared it with a subsidiary, I saw that a branch puts the parent behind every UAE contract; our board chose a free zone subsidiary.
The documents were the real project. I had a list within days: certificate of incorporation, memorandum and articles, a board resolution with exact wording, and a power of attorney for our UAE manager. I had assumed our apostille would do. It did not. Starting legalisation early, and ordering two attested sets, saved us from a second round when the bank asked for its own copies.
Our ownership chart took longer because the group has several layers, but one clear chart answered the free zone and the bank.
On banking, I was told plainly that the bank decides. The file included our group accounts, contracts and a simple payment-flow map, and our signatory flew in once for the meeting. The review took its own time, and we were kept informed at each stage.
Today the subsidiary’s books, Corporate Tax registration and related-party records are kept in order, and I know what is due each year.
How Exactitude Business Services Helps
- Structure advice and guidance on board resolutions and powers of attorney.
- Attestation guidance and legal translation.
- Application preparation and bank introduction.
- Accounting, Corporate Tax, VAT and PRO support.
Our accounting and tax work is led by Hashim Rizvi, FCCA, and our team has 14+ years of experience in the UAE.
Plan Your UAE Subsidiary
Tell us where the parent is incorporated and what the UAE entity will do. We will recommend a structure, list the documents for your country, and outline the banking steps. Book a Free Consultation.
Call or WhatsApp +971 52 177 1150, email sales@exactitudebusiness.com, or contact us.
Frequently Asked Questions
Can a foreign company own 100% of a UAE subsidiary?
In free zones, yes. On the mainland, most activities allow it, but some strategic activities have conditions.
What is the difference between a subsidiary and a branch in the UAE?
A subsidiary is a separate UAE company with its own liability. A branch is part of the parent, can carry out only its licensed activity, and must have a UAE-registered auditor.
Which corporate shareholder documents does the UAE usually need?
Usually the certificate of incorporation, memorandum and articles, a board resolution, a registry extract, a power of attorney and an ownership chart.
Is an apostille enough for UAE company setup?
No. The UAE is not a party to the Hague Apostille Convention. Documents are legalised in the home country, attested by the UAE mission there, and then attested by MOFA in the UAE.
Is a UAE subsidiary of a foreign company a UAE tax resident?
Yes. A company incorporated in the UAE, including a free zone company, is a resident person for Corporate Tax. It must register within three months of incorporation if formed on or after 1 March 2024.
How long does it take to set up a subsidiary in the UAE?
It depends mainly on how fast the parent’s documents are legalised in the home country. Authorities and banks set their own review times.