Are you considering expanding your business empire by protecting your assets and tax liabilities? Setting up a holding company in Dubai could be the strategic move you’ve been seeking. While the process may seem complex, with the right guidance, you can establish your holding company efficiently.
This comprehensive guide will walk you through the process, benefits, and key considerations for setting up a holding company in Dubai, UAE.
What Is a Holding Company?
A holding company is a business entity that doesn’t conduct business operations itself but owns assets in other companies. It functions as a parent company controlling subsidiaries. For example, Meta Inc. is a holding company that owns Facebook, Instagram, and other entities.
Functions of Holding Companies in Dubai
Like any other company setup in Dubai, a holding company must have a director or a management board, depending on its type. The company management must:
- Set out the regulations of the holding company
- Supervise its activity and any subsidiaries
- Ensure the holding company has the necessary capital to operate
Why Set Up a Holding Company in Dubai?
Establishing a holding company in Dubai offers numerous advantages:
- Low corporate tax rate, enabling substantial profit growth
- Ideal location for conducting business across East and West
- A stable economy, providing a favorable business environment
For instance, if you own multiple retail brands, a holding company in Dubai could help centralize management and reduce overall tax liabilities.
Types of Holding Companies in Dubai
There are two main types of holding companies you can establish in Dubai:
- Onshore Holding Company: Established within the UAE as a Limited Liability Company (LLC) or Public Joint Stock Company (PJSC). Requires a minimum of two shareholders and must adhere to UAE commercial companies law.
- Offshore Holding Company: Established outside the UAE, typically used for international business operations. Exempt from UAE taxes and can be set up in a free zone such as Dubai International Financial Center (DIFC). Offers benefits like 100% foreign ownership.
Obtaining a Business License for Your Holding Company in Dubai
Acquiring the appropriate trade license and permits is mandatory and depends on your company’s goals and activities:
- For onshore (Mainland) companies: Apply for a business license from the Department of Economy and Tourism (DET).
- For offshore holding companies: Free zone authorities like DIFC offer a streamlined setup process with remote business license acquisition.
Steps to Open a Holding Company in Dubai
While similar to other company formations in Dubai, it’s advisable to seek assistance from a reputable business consultant to navigate the legal procedures. General steps include:
- Choose your desired type of holding company.
- Select and reserve a unique company name with DET.
- Prepare required documents (e.g., memorandum of association, business plan, shareholders agreement)
- Obtain initial approvals from relevant authorities.
- Secure a tenancy contract (EJARI) for office space in Dubai.
- Apply for your holding company business license.
- Obtain the license and open a UAE business bank account.
Requirements for Opening a Holding Company in Dubai
All Dubai-based companies, including holdings, must comply with the regulations imposed by the Company Law. Holding companies must ensure the following:
- Appoint a management board to create policies for organizing subsidiaries.
- Supervise activities undertaken by subsidiaries.
- Appoint a director in every subsidiary company.
- Ensure subsidiaries have the necessary capital for operations.
- Impose limits on subsidiary risks (foreign currency, market, and industry risks).
- Make decisions regarding contracts and arrangements made by subsidiaries.
Cost of Starting a Holding Company in Dubai
Initial costs may vary depending on factors such as:
- License fees
- Company structure
- Office space rental
- Visa expenses for employees
- Legal and consulting fees
How Can CBS Assist You?
At Corporate Business Services (CBS), we understand the complexities of setting up a company in Dubai. With over 17 years of experience in business setup and consultancy services, our experts can guide you through every step of the process, ensuring compliance and maximizing your benefits.
Don’t let the intricacies of establishing a holding company in Dubai hinder your business growth. Book a free consultation with CBS today and let our experts help transform your business vision into reality. Your future holding company in Dubai is just a conversation away.
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