Many foreign companies wanting to have an established presence in Dubai have opened branch offices or subsidiaries. The main difference between a branch office and a Dubai subsidiary resides in the independence the subsidiary has. While the branch office is tied to the parent company, the subsidiary will be able to conduct its own operations in Dubai. With a vast knowledge about the procedures for opening a company in Dubai, our specialists can help those who want to set up a subsidiary in the UAE in 2026.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) | UAE Company Law |
Best used for | – oil&gas, – banking, – insurance, – trading |
Minimum share capital | No, except mainland Dubai |
| Time frame for the incorporation (approx.) | Around 2-3 months |
| Management (local/foreign) | Local |
| Legal representative required | No |
| Local bank account | Yes |
| Independence from the parent company | Yes |
| Liability of the parent company | No, the subsidiary is fully liable |
| Corporate tax rate | No, except the oil&gas and banking sectors |
| Possibility of hiring local staff | Yes |
Table of Contents
Characteristics of subsidiary companies in Dubai
Foreign companies seeking to have a presence in Dubai will choose the subsidiary because it is a legally independent company operating under the laws of the UAE and the Emirate in which it is established. Compared to the branch office, which is not considered a legal independent structure, the parent company of a subsidiary will be able to decide on completing other activities through a Dubai subsidiary, which can increase its profits substantially. Even if the subsidiary is regarded as an independent entity, the foreign company will act as a shareholder and, therefore, will have a decisional power over the subsidiary.
Those who want to create subsidiary companies in the UAE should consider the following:
- the subsidiary will undertake its own operations under one of the business structures covered by the UAE and Dubai legislation;
- private and public companies are the most employed types of structures for subsidiaries in Dubai;
- it is possible for a foreign company to establish a subsidiary in a Dubai free zone under the form of a free zone company;
- the subsidiary will be subject to the tax legislation in Dubai, which will favor both the local and the parent company;
- the subsidiary can benefit from enhanced protection under the double tax agreements signed by the UAE.
When it comes to the registration of a subsidiary company in Dubai in 2026, the same requirements apply to foreign companies as to foreign citizens. We invite you to see our scheme on how to create a subsidiary in Dubai:
Share capital requirements for a subsidiary in Dubai, UAE
One of the greatest benefits of opening a Dubai subsidiary is related to the share capital requirements which apply differently for mainland companies and free zone structures. From this point of view, it is important to notice the fact that most of the time free zone authorities will impose different share capital regulations.
It is advisable to research the free zone in which you will set up a subsidiary in UAE. Also, it is just as important to understand that each free zone targets one or more industries. If you are interested in setting up a business in Dubai and you are considering a subsidiary of your foreign company, our local agents can offer all the support needed.
Registration steps for opening a subsidiary in Dubaiin 2026
All companies operating in Dubai are required to register with the Department of Economic Development (DED). The first step towards establishing a subsidiary in Dubai is to appoint a local agent to handle the registration procedure. Under the Dubai Company Law, foreign entities are allowed to register subsidiaries in the form of limited liability companies, which is one of the most popular business vehicles in the country. The following steps must be followed to register a subsidiary in Dubai:
- reserving a company name;
- obtaining approval from the DED for the trading activities to be undertaken;
- drafting and notarizing the Memorandum and Articles of Association for the subsidiary;
- submitting information about the shareholders to the DED;
- VAT registration is also mandatory when opening a subsidiary.
Establishing a subsidiary in Dubai is fairly advantageous for a foreign investor looking for business expansion and development in this territory. He or she can benefit from 100% ownership of the company, varied tax savings, and business expansion in the UAE and Group Cooperation Council markets.
Obtain a business license for the Dubai subsidiary
In order to obtain the business license, the following documents must be submitted to the Dubai Chamber of Commerce and Industry:
- the Memorandum and Articles of Association of the Dubai subsidiary in original and copy;
- an application form;
- a name approval letter issued by the DED;
- a company approval letter issued by the DED;
- copies of the shareholders’ passports.
The Dubai subsidiary will also need to obtain clearance from the Municipality Building Department, as it must have a registered office in the Emirate.
Setting up a subsidiary company in a Dubai free zone
The creation of a subsidiary company in a Dubai free zone implies the registration of the chosen business form with the Dubai free zone authority, in which the business will operate. The main advantage of establishing a subsidiary in a Dubai free zone is that no local sponsor or partner is required, as total independence is allowed here.
The company registration requirements for a subsidiary in a Dubai free zone are the same as those of an onshore company; however, when it comes to the registered office of the company, this must be located in that free zone. From this point of view, all Dubai free zones have an excellent infrastructure for accommodating the needs of small, medium, and large-sized companies.
We kindly invite you to get in touch with our local consultants if you want to open a company in Dubai or to set up a subsidiary in UAE. Our agents can help you with company formation in Dubai in a time frame of 1-3 weeks.
Taxation of subsidiaries in Dubai
As mentioned earlier, the subsidiary will be taxed in accordance with the legislation applicable in Dubai. At this point, there is a 9% corporate tax applied to Dubai companies for income above AED 375,000.
When it comes to the accounting and reporting requirements of Dubai subsidiaries, the parent company is required to file annual audited accounts. We offer a wide range of accounting services for local and foreign companies operating in Dubai, including for subsidiary companies established in the UAE.
The video below presents the main steps to take when opening a Dubai subsidiary:
Why open a subsidiary in Dubai/UAE?
Among the reasons for setting up a business in Dubai in the form of a subsidiary, we have the following:
- it is easy to register and allows for total independence, including offering distinct services from the parent company;
- from a taxation point of view, the repatriation of profits to foreign shareholders is free of charge in Dubai;
- the subsidiary can be set up by companies in various industries, as there are no restrictions in this sense;
- the visas for the representatives detached from the parent company are easier to obtain now.
Dubai’s economy key facts
Dubai is one of the most popular business destinations in the world, and remains the same in 2026. Those choosing the UAE for future operations can definitely opt for Dubai, one of the most developed and advanced cities in the world. Here are some details about Dubai’s economic direction:
- Around 3.3% was the GDP growth registered in Dubai in Q2 of 2024, reaching around AED 116 billion.
- The key sectors like tourism, technology, and logistics largely supported the economic growth registered by the Emirate of Dubai in 2024.
- Transforming into a global model for well-being and focusing on attracting more foreign investments are two of the targets set on Dubai Social and Economic Agenda 2033.
Business updates in 2026
Here are the latest updates in the business climate of Dubai:
- The 9% corporate tax on company profits surpassing AED 375,000 is now fully incorporated. In 2026, owners of companies established in Dubai’s free trade zone will be required to demonstrate that they have Economic Substance to retain the 0% tax status on qualifying income.
- According to the Federal Decree-Law No. 11 of 2024, all companies in Dubai must implement the ESG reporting requirements in 2026. These refer to tracking and reporting the carbon emissions as part of the UAE’s net-zero conversion.
- Subsidiaries in Dubai will have to implement a national real-time digital invoicing system, starting in July 2026, as part of the government’s effort to enhance tax transparency in the Emirate.
- Even though it started in 2025, the sector-wide AI deployment infrastructure in Dubai will see major changes in 2026 in sectors like logistics, retail, and finance, among others.
Immigration to Dubai might come to the attention of foreign investors interested in relocating to the UAE for business purposes. For information related to immigration for setting up subsidiaries in the Emirate, please contact our experts in company incorporation in Dubai.