Expanding your foreign business into the UAE is a smart move, and opening a branch office in major emirates like Abu Dhabi or Sharjah allows you to tap into the lucrative Middle Eastern market while maintaining your original company’s identity. Unlike setting up a new entity, a branch office acts as an extension of your existing foreign company, offering benefits such as brand recognition and simplified operations.

This guide covers everything you need to know about opening a branch of a foreign company in Abu Dhabi or Sharjah in 2025 — from legal requirements and documentation to the setup process and compliance.

1. What is a Branch Office in UAE?

A branch office is not a separate legal entity but an extension of the parent company established abroad. It can conduct business, sign contracts, and generate revenue in the UAE under the name of the foreign company. However, it cannot undertake activities outside the scope approved by the UAE authorities.

2. Choosing Between Abu Dhabi and Sharjah

Both emirates offer distinct advantages for branch setup:

• Abu Dhabi: The UAE’s capital with strong government support, access to oil, gas, and finance sectors, and a mature business ecosystem.

• Sharjah: A cost-effective hub with proximity to Dubai, diverse industrial zones, and growing infrastructure for manufacturing, trading, and services.

Your choice depends on your business focus, target market, and operational needs.

3. Legal Requirements for Branch Setup

• The parent company must be legally registered and active in its home country.

• The branch office must have a UAE-based local service agent (LSA) or a local sponsor, depending on the emirate’s rules.

• The branch must conduct business only in the approved activities matching the parent company’s scope.

• The branch cannot independently own assets or issue shares.

4. Documentation Needed

To open a branch in Abu Dhabi or Sharjah, you will typically need:

• A certified copy of the parent company’s Certificate of Incorporation and Memorandum & Articles of Association (MOA/AOA).

• Board resolution from the parent company approving the branch opening.

• Power of Attorney (POA) appointing the local service agent or authorized representative.

• Passport copies and personal details of authorized signatories.

• Proof of business address of the branch in UAE (office lease agreement).

• Bank reference letters or financial statements from the parent company.

• Trade name reservation documents.

All foreign documents must be notarized, attested by UAE embassies, and translated into Arabic if required.

5. Steps to Register a Branch

Step 1: Choose the emirate and appoint a local service agent or sponsor.

Step 2: Reserve the trade name through the Department of Economic Development (DED) or relevant free zone authority.

Step 3: Submit all required documents, including parent company credentials and POA.

Step 4: Obtain initial approvals from economic and regulatory authorities.

Step 5: Secure the office space and finalize the tenancy contract (Ejari).

Step 6: Pay fees and receive the branch license.

6. Compliance and Operational Considerations

• Branch offices in Abu Dhabi and Sharjah must renew their licenses annually.

• VAT registration is mandatory if turnover exceeds the threshold.

• Branches must comply with UAE’s corporate tax and economic substance regulations.

• Audited financial statements of the parent company and branch operations may be required.

7. Benefits of Branch Setup

• Leverage the foreign parent company’s brand and reputation.

• Ability to legally conduct business in the UAE market.

• No need for full company incorporation.

• Access to local government contracts and clients.

• Easier bank account opening due to branch status.

Final Thoughts

Opening a branch of your foreign company in Abu Dhabi or Sharjah provides a strategic foothold in the UAE market with less administrative complexity than a full company setup. Understanding the legal framework, documentation, and compliance requirements ensures a smooth process in 2025. Engaging experienced local advisors is recommended to navigate jurisdiction-specific regulations efficiently.

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