Opening a Branch in Another Emirate: Licence, Costs, VAT and Corporate Tax

Each emirate licenses economic activity carried on inside its borders. A Dubai mainland licence covers your Dubai premises. If you rent a warehouse in Sharjah, open a showroom in Abu Dhabi or base staff there permanently, the host emirate will expect a local licence. A branch is the lightest way to get one, because it extends the existing company instead of creating a new one.

A branch is not always required. Selling to customers in another emirate from your licensed home premises, delivering goods or sending staff for a project is different from operating a fixed base there. Some emirates also ask for project or activity permits for specific work, so check with the host emirate's economic department before the work starts.

The main choice is a branch or a subsidiary:

• Branch: same legal person, same name, the parent is fully liable, and there is nothing new to register for tax.
• Subsidiary: a new company with limited liability, its own licence and its own tax registrations. It can join a tax group if the ownership tests are met.

The documents are broadly similar everywhere: the parent licence and constitutional documents, a shareholder or board resolution approving the branch, appointment of a branch manager, the branch's activities and evidence of premises.

• Abu Dhabi (ADDED via TAMM): owners of businesses licensed in other emirates apply for a new branch licence on TAMM, submit documents, obtain approvals and pay the fees. Since February 2025, branches of firms from other emirates and their free zones may operate without their own premises for one year from issue, for 1,200 listed activities. After that, premises are needed.
• Sharjah (SEDD): a branch licence tied to Sharjah premises with a registered tenancy.
• Dubai (DET): a branch licence tied to premises registered on Ejari. Under Law No. 13 of 2011 the licence runs for one year and is renewed within the last month before expiry.

The activities on the branch licence should match what the branch actually does. Some activities also need sector approvals, such as health, education or food. Free zone companies follow different routes. In Dubai, Executive Council Resolution No. 11 of 2025 covers only Dubai free zone establishments.

No emirate publishes one branch price, because fees are built from components. The main drivers are:

1. Activities. Licence fees are charged per activity and per category, so a branch with three activity groups costs more than one with a single activity.
2. Premises. Rent and tenancy registration are usually the largest recurring cost. Abu Dhabi's first-year premises relief cuts this for eligible activities.
3. Visas and immigration. Staff based at the branch need work permits and an establishment card linked to that licence, each with its own government fees.
4. Sector approvals. Regulated activities add approvals and sometimes inspections.
5. Renewal and accounting. The branch licence renews every year, and the branch needs its own cost centre in the books so you can show what it earns and spends.

Ask the host emirate's department, or use its online calculator, for a quote that lists each component, and compare it with the cost of a new company. Include the second-year renewal in the comparison, because the premises relief and introductory pricing can make the first year look cheaper than the steady state. For Dubai, our setup cost calculator helps you total the quotes.

The FTA's registration guidance is clear: a company with several branches does not register each one. All branches sit under a single TRN and are covered by one VAT return. In practice:

• Do not apply for a new TRN for the branch. Update the company's registration details in EmaraTax when addresses or licence details change, within the deadline the FTA sets for notifying changes.
• Moving goods or charging costs between head office and branch is not a supply between two persons, so no tax invoice is issued between them. Keep internal transfer notes for stock control.
• Sales by the branch go on the company's return. The AED 375,000 mandatory threshold is tested on the company's combined supplies, not branch by branch.
• The branch's customer invoices must carry the company's legal name and TRN. Branch name and address can be added.

A subsidiary is different. It is a separate person, so supplies to it are taxable unless both companies join a VAT group. See VAT tax group conditions.

A domestic branch is part of the same juridical person, so for corporate tax it is part of the same taxable person. The company keeps one registration and files one return covering all branches. It gets one AED 375,000 band at 0%, with 9% above it under Article 3 of Federal Decree-Law No. 47 of 2022. Opening branches in three emirates does not give you three bands.

Practical points:

• Branch losses and profits net off automatically inside the company's result.
• Keep branch-level management accounts anyway. They support the licence renewal, bank reviews and any FTA query on where income is earned.
• Small Business Relief, where available, is tested on the whole company's revenue of AED 3,000,000 or less, not branch by branch.
• Free zone companies are different. A mainland branch is a domestic permanent establishment whose income is carved out of Qualifying Income. See mainland branch of a free zone company.

A subsidiary would need its own corporate tax registration. It can join a tax group only where the 95% ownership and other conditions are met. For registration mechanics, see corporate tax registration.