Branch Licence in Abu Dhabi: How to Open a Branch in Abu Dhabi

Abu Dhabi is the capital of the United Arab Emirates and one of the region’s leading centres for business and trade. It has a stable economy, advanced infrastructure, and strong support for foreign investment. These factors make it an ideal location for companies that want to enter or grow in the Middle East market.

A branch licence allows a foreign or local company to open an office in Abu Dhabi without setting up a new legal entity. The branch operates under the name of the parent company and can carry out the same business activities. This business setup service is suitable for companies that want to offer their services directly in the UAE, while keeping full control under the head office.

Choosing Abu Dhabi for branch expansion offers access to a large local market and wider reach across the Gulf Cooperation Council (GCC). Companies benefit from investor-friendly policies, tax advantages, and access to skilled labour. The clear legal process also supports smooth business entry and ongoing operations with dedicated PRO services.

What is a Branch Office in Abu Dhabi?

A branch office in Abu Dhabi is an extension of an existing company. It does not create a new company. Instead, it operates under the same name and legal structure as the parent company.

The branch can carry out the same business activities as the parent company. This includes selling products, offering services, signing contracts, and dealing with customers. It must follow the rules and limits set by local authorities in Abu Dhabi.

The branch office is not a separate legal entity. The parent company remains fully responsible for its actions, debts, and legal matters. The branch must use the parent company’s trade name and cannot take on new business activities that the parent does not already perform.

To open a branch in Abu Dhabi, the parent company must be legally registered in another country or in another part of the UAE. A branch is often used when a company wants to enter a new market while keeping full ownership and control.

Benefits of Opening a Branch in Abu Dhabi

Opening a branch in Abu Dhabi offers several advantages that support business growth and market access in the UAE and beyond.

Strategic location and infrastructure

Abu Dhabi is located between Europe, Asia, and Africa. This position allows businesses to move goods and services easily across nearby regions. The emirate has major seaports, international airports, and advanced road networks. It also offers strong digital services, such as high-speed internet and secure communication systems. These features support trade, logistics, and business operations.

100% foreign ownership and profit repatriation

Foreign companies can own their Abu Dhabi branch fully, without needing a local shareholder. This applies to both free zone and mainland branches. The parent company keeps full control over management and operations. All profits made by the branch can be transferred back to the parent company without restrictions. This helps with financial planning and reduces risk.

Access to local and regional markets

A branch in Abu Dhabi allows direct entry into the UAE market. Businesses can also reach other Gulf countries through trade agreements within the GCC. This regional access supports growth across multiple markets without needing separate company structures.

Government incentives and tax benefits

The Abu Dhabi government supports foreign businesses by offering a stable legal system, efficient licensing, and support services. There is no personal income tax in the UAE. Corporate tax is set at 9% for businesses above a certain income level. The UAE has signed double taxation agreements with many countries, which helps companies avoid being taxed twice on the same income.

Difference Between Freezone and Mainland

In a free zone, a branch benefits from full foreign ownership, simplified setup procedures, and often tax exemptions for a fixed period. However, a free zone branch cannot trade directly with the mainland without appointing a local distributor or agent.

A mainland branch can trade directly across the UAE without needing a local agent but must appoint a UAE national as a local service agent. The setup process for mainland branches may include more approvals and higher costs. Businesses should choose based on the type of market they want to enter and the level of operational freedom they need.

Who Can Open a Branch in Abu Dhabi?

The following conditions must be met to open a branch in Abu Dhabi:

• The parent company must be legally incorporated either outside the UAE or in another emirate within the UAE.

• The parent company must provide proof that it is still in operation and holds a valid business licence.

• The branch must carry out the same activities as the parent company. It cannot conduct business outside the scope of the parent company's registered activities.

• The parent company is fully liable for the branch’s contracts, financial obligations, and legal issues.

• Companies from any country are allowed. There are no nationality restrictions, but the company must follow UAE laws and procedures.

• Additional approval may be required for regulated sectors: Activities such as banking, insurance, or healthcare may need extra approval from relevant government authorities.

• Individuals cannot open a branch. Only companies can apply. Sole traders or start-ups must choose other legal structures such as an LLC.

• Branches can be opened in both free zones and the mainland. The choice depends on the target market and business goals.

Required Documents for Branch Registration

To register a branch in Abu Dhabi, the parent company must provide specific documents. These documents confirm the legal status of the company and its right to operate in the UAE. All documents must be notarised, legalised in the home country, and attested by the UAE embassy.

Certificate of Incorporation: This is proof that the parent company is legally registered in its home country. It shows the official name, date of registration, and company number.

Board Resolution: This is a formal decision by the parent company’s board of directors. It must confirm approval to open a branch in Abu Dhabi and name the person who will act as the company’s representative in the UAE.

Memorandum & Articles of Association: These documents explain how the parent company is set up and run. They include information about the company’s structure, ownership, and business activities.

Power of Attorney: This gives legal authority to a person in Abu Dhabi to act on behalf of the parent company. It must clearly state the person’s rights and duties.

Passport copies and UAE entry stamps: Copies of the authorised representative’s passport and UAE entry stamp are required to confirm identity and legal entry into the country.

Local tenancy contract: A signed office lease agreement in Abu Dhabi is required. The contract must show the address of the branch and be registered with the relevant authority.

Step-by-Step Process to Open a Branch in Abu Dhabi

Follow these steps to complete the branch license registration process in Abu Dhabi, from choosing a location to receiving final approval.

Step 1: Choose the jurisdiction (Free Zone or Mainland)

Decide whether to open the branch in a free zone or on the mainland. A free zone offers benefits like tax exemptions and simpler rules but limits direct trade with the UAE market. A mainland branch allows full access to the UAE market but requires more approvals. The choice depends on the business activity and target customers.

Step 2: Appoint a Local Service Agent (LSA) for mainland setup

If setting up on the mainland, a Local Service Agent (LSA) must be appointed. The LSA must be a UAE national or a company owned by UAE nationals. The agent does not hold shares in the business but is required to handle government-related tasks. An LSA is not needed for free zone branches.

Step 3: Reserve the trade name

Apply to reserve the trade name through the Department of Economic Development (DED) or the free zone authority. The branch must use the same name as the parent company, unless the name is already registered or restricted in Abu Dhabi.

Step 4: Prepare and legalise required documents

Collect and legalise the required documents. These may include the parent company’s Certificate of Incorporation, Memorandum and Articles of Association, Board Resolution, and Power of Attorney. All documents must be notarised and legalised in the parent company’s home country, and then attested by the UAE embassy.

Step 5: Apply for initial approval

Submit the documents to the Department of Economic Development (for mainland) or the relevant free zone authority. The application must include details of the company’s planned activities in Abu Dhabi. Approval confirms that the branch is allowed to continue with the next steps.

Step 6: Lease office space and obtain tenancy contract

Secure a physical office space in Abu Dhabi and sign a tenancy contract. The office must meet the requirements of the licensing authority. The tenancy contract must be registered with the Abu Dhabi Municipality.

Step 7: Obtain necessary approvals from relevant authorities

Depending on the business activity, further approvals may be required from government bodies. For example, banks must obtain approval from the Central Bank, while medical businesses need clearance from the Health Department.

Step 8: Submit final application and pay licensing fees

Once all documents and approvals are complete, submit the final application for the branch licence. Pay the required government fees. After approval, the licence will be issued, and the branch can begin operations in Abu Dhabi.

Costs Involved in Setting Up a Branch

Setting up a branch in Abu Dhabi involves several fixed and ongoing costs. These may vary depending on the type of business, chosen location (free zone or mainland), and services required.

Government fees and licensing costs

To register the branch, fees must be paid to the Department of Economic Development (DED) or the relevant free zone authority. These include trade name reservation, initial approval, and licence issuance. On average, government fees range from AED 10,000 to AED 20,000 per year, depending on the business activity.

Office rental and LSA fees

A physical office is required to obtain a trade licence. Office rental costs vary based on size and location. In Abu Dhabi, small office spaces may start from AED 15,000 to AED 30,000 per year.
For mainland branches, appointing a Local Service Agent (LSA) is mandatory. The LSA does not own any part of the business. The agent’s fee is usually agreed annually and may range from AED 8,000 to AED 25,000, depending on the agreement.

Bank guarantee (AED 50,000 for foreign branches)

Foreign branch offices must provide a refundable bank guarantee of AED 50,000. This must be deposited in a UAE-based bank and held for the duration of the licence. It cannot be used for business expenses or working capital.

Legalisation and document attestation expenses

Documents such as the Certificate of Incorporation, Board Resolution, and Power of Attorney must be notarised and attested. These steps must be done in the parent company’s country and then confirmed by the UAE embassy. The cost for legalising and attesting documents can range from AED 5,000 to AED 10,000, depending on the number of documents and the country of origin.