The UAE offers three main company structures for foreign founders on the mainland — LLC (Limited Liability Company), sole establishment, and branch office. An LLC is the default for most foreign-owned businesses. A sole establishment is for single-owner professional activities. A branch is an extension of an existing foreign parent, not a separate legal entity. Last updated: May 2026.
For the full UAE setup pathway, see how to start a business in the UAE: complete guide for foreign founders. Licence types across all three structures are covered in UAE trade license types explained: commercial, professional, industrial, tourism.
What are the three mainland company structures?
The three structures differ in legal separation, liability, and ownership rules. Choosing the wrong one creates operational, tax, and banking complications that are expensive to unwind.
| Dimension | LLC | Sole establishment | Branch office |
|---|---|---|---|
| Legal personality | Separate legal entity | Separate legal entity (one owner) | Extension of foreign parent — no separate entity |
| Minimum shareholders | 1 (single-shareholder LLC permitted since 2021) | 1 natural person | Parent company |
| Liability | Limited to share capital | Unlimited — owner is personally liable | Parent assumes all liability |
| Foreign ownership | 100 % since 2021 reform | 100 % since 2021 reform | 100 % — branch of foreign entity |
| MOA required | Yes — notarised at DED | No — simpler registration | No — parent board resolution required |
| Corporate tax | 9 % above AED 375,000 | 9 % above AED 375,000 | 9 % on UAE-attributable profits |
| Can sponsor visas | Yes | Yes | Yes |
| Can open bank account | Yes | Yes | Yes (under parent’s name) |
| Can bid government contracts | Yes | Yes | Yes |
When should you choose a UAE LLC?
Choose an LLC when you have multiple shareholders, need limited liability, plan to raise investment, or want the most flexible corporate structure. The LLC is the standard vehicle for foreign-owned UAE businesses. Since Federal Decree-Law No. 32 of 2021, a single foreign natural person or corporate entity can form a single-shareholder LLC with 100 % ownership.
LLC advantages include limited liability (creditors can only claim against company assets, not the founder’s personal assets), flexible share classes, the ability to add or remove shareholders without dissolving the entity, and compatibility with UAE banking and investment structures.
The LLC requires a notarised Memorandum of Association (MOA), which costs AED 1,500 to AED 4,000 and specifies share capital, governance, and activity scope. Share capital is declared but typically not required to be deposited upfront, except in regulated sectors.
When should you choose a sole establishment?
Choose a sole establishment when you are a single individual performing professional activities and want the simplest possible registration. A sole establishment has one owner, one licence, and no MOA — just a direct DED registration.
The trade-off is personal liability. A sole establishment does not create a separate legal entity in the same way as an LLC. The owner is personally responsible for all business debts and obligations. This structure is most commonly used by individual consultants, freelancers, designers, and single-practitioner professionals.
Sole establishments pay the same 9 % corporate tax above AED 375,000 as LLCs and can apply for Small Business Relief if revenue stays below AED 3 million. They can sponsor investor visas and employee visas, and they can open corporate bank accounts under the establishment’s trade name.
When should you choose a branch office?
Choose a branch office when your foreign parent company wants to operate directly in the UAE without creating a separate legal entity. A branch is not a new company — it is a registered extension of the parent that operates under the parent’s name, assumes the parent’s liabilities, and reports UAE-attributable profits to the FTA.
Branch offices are commonly used by large international firms — engineering consultancies, law firms, accounting networks, and multinational manufacturers — that need a UAE operational presence but prefer to keep the corporate structure consolidated.
Since the 2021 reform and the clarification under Federal Decree-Law No. 20 of 2025, a foreign company can open a branch in the UAE without a local agent. The branch requires registration with the relevant DED and the Ministry of Economy. The Ministry of Economy charges a registration fee and requires an attested parent-company certificate of incorporation.
The branch’s UAE-attributable profits are taxed at 9 % under the Corporate Tax Law. Transfer-pricing rules apply to transactions between the branch and its parent.
How do you convert between structures?
Converting between structures — LLC to branch, sole establishment to LLC, or branch to LLC — is not a licence amendment but a new incorporation. The existing entity must wind down or continue in parallel, and the new entity must be incorporated separately with fresh DED registration, FTA registration, and MOHRE labour-card assignments.
The most common conversion is sole establishment to LLC, triggered when a single professional wants to add a partner, raise capital, or limit personal liability. The process involves surrendering the sole establishment licence, incorporating the new LLC with a notarised MOA, and migrating contracts, employees, and bank accounts.
For the cost implications of each structure, see UAE business license costs: full breakdown by activity and jurisdiction.
Frequently asked questions
Can a single person form a UAE LLC?
Yes. Federal Decree-Law No. 32 of 2021 permits single-shareholder LLCs on the UAE mainland. The single shareholder can be a foreign natural person or a foreign corporate entity. There is no requirement for a second shareholder or a local partner.
Does a sole establishment need an audit?
A sole establishment with revenue below AED 50 million is not required to produce audited financial statements under current UAE law. However, if the entity applies for QFZP status in a free zone context (unlikely for mainland sole establishments) or if the FTA requests records during a review, accounting records must be maintained.
Can a branch office open a UAE bank account?
Yes. A branch office can open a corporate bank account in the UAE, though the account operates under the parent company’s name. UAE banks typically require attested parent-company documents, a board resolution authorising the branch, and in-person KYC for at least one authorised signatory.
Sources and further reading
- Federal Decree-Law No. 32 of 2021, amended by Federal Decree-Law No. 20 of 2025 — Commercial Companies Law
- Dubai Department of Economy and Tourism — LLC, sole establishment, and branch registration (invest.dubai.ae)
- UAE Ministry of Economy — Branch-office registration framework (moec.gov.ae)
- UAE Federal Tax Authority — Corporate Tax treatment of branches and PEs (tax.gov.ae)