Dubai is one of the fastest-growing business hubs in the world, attracting entrepreneurs and investors from all over the globe. One of the most popular business structures in Dubai is a holding company, which is a type of company that owns other companies’ stocks or assets. but it does not make goods or provide services. It is usually formed to manage a group of subsidiary companies, each of which operates in a specific industry or sector. The holding company’s primary role is to provide oversight and strategic direction to its subsidiaries, as well as to consolidate financial statements and manage shared resources. If establishing a holding company in Dubai is on your mind, it’s crucial to partner with a trustworthy business consultant like ourselves, who can assist you through the entire process and guarantee your adherence to all essential rules and regulations. With the right strategy and guidance, a holding company in Dubai can be a highly profitable and successful investment.
setting up a holding company in Dubai Benefits:
Tax Benefits
One of the primary reasons why many investors choose to set up a holding company in Dubai is the favorable tax regime. The UAE has no personal income tax or corporate tax, which means that holding companies can operate tax-free. Additionally, Dubai has signed double taxation avoidance agreements (DTAAs) with many countries, providing further tax benefits to investors.
Asset Protection
A holding company can provide asset protection to investors by separating their personal assets from the assets of their business. This means that if one of the subsidiary companies is sued or goes bankrupt, the holding company’s assets are protected. This is particularly important for investors who have high net worth and want to protect their personal assets.
Consolidation of Resources
A holding company can consolidate resources and reduce costs by sharing resources among its subsidiaries. This includes resources such as administrative staff, IT infrastructure, and marketing resources. By sharing these resources, the holding company can improve efficiency and reduce costs, which can result in higher profits for all the subsidiary companies.
Strategic Planning
A holding company can provide strategic planning and direction to its subsidiaries. This means that the holding company can set long-term goals and objectives for its subsidiaries, and ensure that they are working towards a common vision. This can help to improve the overall performance of the subsidiary companies and increase their profitability.
Ease of Establishment
Forming a holding company in Dubai is a relatively simple and uncomplicated process. The process involves registering the company with the Department of Economic Development (DED), obtaining a trade license, and opening a corporate bank account. Additionally, the Dubai International Financial Centre (DIFC) provides a regulatory framework that is modeled on international standards and offers a range of business services.
How to open a holding company in Dubai UAE:
- Choose a Business Activity: The first step in setting up a holding company in Dubai is to decide on the business activity that the company will engage in. It is important to ensure that the chosen activity is allowed in the UAE and obtain the necessary licenses and approvals.
- Choose a Legal Structure: Holding companies can be established as Limited Liability Companies (LLCs), Free Zone Companies, or Offshore Companies. The choice of legal structure will depend on the investor’s preferences and business goals.
- Choose a Company Name: The name of the holding company must be unique and not already registered in the UAE. The name must also not contain any offensive or sensitive words.
- Obtain Approvals and Licenses: Before registering the company, it is necessary to obtain necessary approvals and licenses from the relevant authorities, such as the Department of Economic Development (DED) and the Ministry of Economy.
- Register the Company: Once all the approvals and licenses are obtained, the holding company can be registered with the relevant authorities in Dubai. This involves submitting the necessary documents and paying the registration fees.
- Open a Corporate Bank Account: To operate in Dubai, the holding company must have a corporate/ business bank account in Dubai. This account can be opened with any of the major banks operating in Dubai.
Holding companies in Dubai activities:
It is important to note that holding companies in Dubai are not allowed to engage in commercial activities or conduct business operations. Instead, they are set up solely for the purpose of holding and managing the assets and investments of their subsidiaries. The activities of holding companies are regulated by the Dubai International Financial Centre (DIFC) and the Dubai Financial Services Authority (DFSA). The activities include:
- Holding shares in other companies
- Owning and managing intellectual property
- Acquiring and holding real estate
- Investing in financial instruments, such as stocks, bonds, and funds
- Providing financial and management services to subsidiaries
- Engaging in activities related to treasury management and risk management
- Holding patents and trademarks
At Business Setup Dubai, We have the expertise and experience necessary to set up a company in all of the most common jurisdictions, including Dubai. Our dedication lies in offering our clients exceptional service and proficiency. If you’re interested in setting up a holding company in Dubai, please contact us today!
Frequently Asked Questions:
Yes, but only if you have the relevant documents and permissions from the Ministry of Finance in Dubai. In order to set up a holding company here, you must first obtain the following: A license from the Ministry of Finance in Dubai, and a certificate of incorporation.
There are two main types of holding companies:
1. Registered Free Zone Holding Company: This is an off-shore entity with its own shareholders that can be used to operate businesses from within any free zone in the UAE (e.g., Jebel Ali or Dubai International Financial Centre).
2. Local Emirate Holding Company: This is an onshore entity that can only operate within one emirate (e.g., Dubai, Abu Dhabi), but it does not pay tax on profits generated by its subsidiaries.
Yes, foreigners can own 100% of a holding company in Dubai in certain business sectors and under specific conditions. In 2019, the UAE government introduced new laws that allow foreign investors to own 100% of companies established in the UAE mainland, including Dubai, in certain business sectors. These business sectors include agriculture, manufacturing, renewable energy, and information technology. In addition, there are several free zones in Dubai where foreigners can own 100% of a holding company without the need for a local partner or sponsor. These free zones include Dubai International Financial Centre (DIFC), Dubai Multi Commodities Centre (DMCC), Jebel Ali Free Zone (JAFZA), and Dubai Silicon Oasis (DSO), among others.
It is important to note that in some business sectors, such as banking and finance, foreign ownership may be restricted or require special approval from regulatory authorities. Additionally, owning a holding company in Dubai requires compliance with certain regulations, including obtaining necessary licenses and approvals, filing financial statements, and complying with labor laws.
A holding company in the UAE is primarily established to manage and hold the assets of its subsidiaries, and it cannot engage in commercial or trading activities. Some of the things a holding company cannot do in the UAE include:
Conducting commercial activities: A holding company cannot conduct any commercial or trading activities in the UAE. It can only hold and manage the assets of its subsidiaries.
Providing services to the public: A holding company cannot offer services to the public, such as banking or insurance services.
Holding a professional license: A holding company cannot hold a professional license to provide professional services, such as legal or accounting services.
Owning property for personal use: A holding company cannot own property for personal use, such as residential properties for its directors or employees.
Avoiding taxes: A holding company cannot be established solely for the purpose of avoiding taxes or engaging in illegal tax practices.
Engaging in prohibited activities: A holding company cannot engage in any activities that are prohibited by law in the UAE.
We have company in dubai main land and would like to set up holding company in jebel ali and transfer above company shareholding to holding company
Sure we can help you .
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