Subsidiary vs. Branch in Dubai

A presentation brought to you by Dubai-Lawyers.com

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Types of Structures for Foreign Companies in Dubai

Two of the most popular legal entities for foreign companies are the branch and the subsidiary.

Each of them has its own particularities and the differences between a company branch and a subsidiary in Dubai can be relevant to the business plans of the company. 

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What Is a Dubai Subsidiary?

The subsidiary in Dubai is an actual separate legal entity from the parent company.

This means that the foreign corporation will no longer be liable for the actions of the subsidiary, as it was the case with the branch.

The subsidiary will have its headquarters in Dubai and the management activities will take place in the emirate.

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How to Open a Subsidiary in Dubai

Foreign business owners can open a subsidiary in one of the free zones or outside of them, if they have a UAE national business partner that owns 51% of the company.

This type of legal entity will have to observe the taxation laws in Dubai and will have to obtain the necessary permits for functioning and for hiring employees.

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What Is a Dubai Branch?

The branch office is basically an extension of the foreign parent company in Dubai.

A Dubai branch office must also obtain a trade license for the same activities its parent company carries out.

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How to Open a Branch Office in Dubai

A  branch is Dubai needs to be registered with the Ministry of Economy and it cannot perform certain restricted activities, like commercial agencies or restaurants.

Also, the nature of this business form allows it to perform only activities similar to those performed by the mother company abroad.

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Differences Between Dubai Branches and Subsidiaries

Compared to the branch office that is an extension of the parent company, the Dubai subsidiary is a distinct legal entity.

The branch office’s activities are limited to the parent company’s activities, while the subsidiary may carry other activities than the parent company.

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Open a Dubai Branch or Subsidiary?

You should know that the subsidiary will be held accountable for the company’s debts and actions, while the parent company will be held liable for the Dubai branch office’s debts.

When it comes to taxes, both types of companies benefit from all local tax benefits and double taxation agreements Dubai has concluded with other countries.

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Company Registration Services in Dubai

Our law firm in Dubai offers company incorporation services and can help you open a company in this emirate.

You can contact our Dubai lawyers, if you need assistance for company registration or if you would like to know more about branches and subsidiaries in Dubai. 

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Thank you for your attention!

For more information, please contact us at:(+44) 203-287 0408 (for international clients)

office@dubai-lawyers.net

www.dubai-lawyers.net10