How to Set Up a Holding Company in Dubai?

The United Arab Emirates is the most popular place for establishing businesses because of its thriving economy and business-friendly policies. Business owners get the best opportunities for starting a business in Dubai. 

For the past few years, Dubai has been moving from an oil-based economy to a service-based economy. Therefore, you’ll find many new businesses and start-ups coming up here in the Middle East rapidly. 

Setting up a holding company in Dubai offers a variety of advantages like exemption from taxation, reliable protection of foreign assets and the possibility of entering local advantages.

Back to top

What is a Holding Company?

A holding company in Dubai is a legal entity which owns the shares, holds, and manages investments in other companies. In other words, a holding company acts as a parent company managing its subsidiary company’s legal liabilities.

The UAE allows the incorporation of holding companies in all its Emirates. They approve the required license by naming the business activity as “activities of holding companies”. 

A holding company in Dubai -

• Can’t set up a business in the industry of manufacturing goods and delivery services.

• Should hire a director for all its subsidiaries with the discussions and votes of the shareholders.

• It should consist of an administrative framework, i.e., a board of directors to manage the activities of the subsidiaries.

• Controls the flow of money to and from the subsidiaries.

• Engages in the negotiation, establishment of terms, and contractual agreements for the subsidiaries.

• In case of an offshore company, it cannot sponsor resident and employment visas.

• Must bear the responsibility for the subsidiaries' obligations and debts within the confines of its financial contribution to each respective business.

• Imposes specific limitations on the risk of exposing the subsidiaries. This includes but is not limited to foreign exchange risks, as well as risks associated with other markets or industries.

• Must verify that the subsidiary (or subsidiaries) possesses the essential resources required for executing their operational activities.

• Is prohibited from engaging in hands-on management, strategic development, and planning activities within subsidiaries but is authorised to facilitate the opening of corporate bank accounts.

• The company must ensure its subsidiaries have the much-needed capital to operate.
   

Back to top

Types of Dubai Holding Companies - 

Business owners can set up different types of Dubai holding companies. They are as follows –

1. The Onshore Holding Company:

A company with a foreign investor who needs to have a local partner owning 51% of the company is called an onshore holding company.

2. The Free Zone Holding Company:

A company with 100% foreign ownership is called a free zone holding company.

Back to top

Registration Procedure of a Holding Company in Dubai -

A holding company registration process requires adherence to the laws issued by the government. 

The steps are explained below –

a) Systematic Planning and Research:

The company needs to do research and plan according to the business goals and objectives. 

This includes The type of industry, type of holding structure, acquisition of subsidiaries, etc, which must be decided before the registrations. 

b) Select a Business Activity:

The big reason for the increase in business formations is the various business activities in Dubai entrepreneurs get to pursue across various sectors. 

Activities like investment holding, property holding, intellectual property holding, etc, are all options a company can choose according to what best suits them.

c) Select the Right Location:

A company needs to select the right location in Dubai. This allows the company to get the right consumers and clients fast, thus boosting revenue. 

Hence, research is essential for ensuring that you buy the right location or rent it according to your business plans.

d) Type of Entity:

Under this step, choosing a suitable type of entity which is beneficial to the company is an essential step.

The most common entities are Free Zone Company, Mainland Company, and Offshore Company, each having its own advantages and limitations.

e) Submission of Documents:

It‘s recommended that you prepare the necessary documents and agreements for a hassle-free registration process.

These documents are helpful during legal proceedings, providing information and acquiring approvals.

Read about Private Shareholding Company here.

Also, read about the Public Shareholding Company because it will help you learn more about setting up a Dubai holding company.

Back to top

Setting Up a Dubai Holding Company -

One of the best places for setting up your holding company in Dubai is the Dubai International Financial Centre (DIFC). It’s a leading financial hub in the region for fintech, business, and lifestyle.

DIFC holding companies are used for holding assets within the Emirates, the GCC, or anywhere else globally. These include real property and shares in other companies in the UAE and worldwide.

Back to top

Advantages of Setting Up a Dubai Holding Company -

Understanding the advantages of setting up a holding company in Dubai will help you with better and quicker decision-making. 

The benefits are as follows – 

• Zero tax on personal income.
• 100% foreign ownership is allowed.
• No restrictions on foreign employees.

• No restrictions on capital repatriation.
• The leading fund domicile in the region.
• Highly regarded as the independent regulator.
• High prominence in Deal-making in the region.
• Zero tax for 50 years on profits, capital, or assets.
• The concentration of international financial institutions.
• World-class regional and international professional services.
• Well-positioned to harness the potential of emerging markets.
• GCC Management offices, holding companies and family offices are located closer to the assets they own or manage.

With the United Arab Emirates becoming more and more popular with ex-pats as a place to live and work, owning a property through a holding company makes good business sense in more ways than one.

Establishing a holding company in Dubai offers numerous opportunities due to the business-friendly policies and well-planned location. By conducting thorough research, choosing the right legal structure, and complying with local regulations, businesses can benefit from tax advantages and a supportive infrastructure. 

Seek professional guidance throughout the setup process to ensure a smooth and successful company formation.

Back to top

Start your Holding Company Setup with Commitbiz -

The process of setting up a holding company in Dubai has been designed with simplicity in mind. That said, it does take some in-depth knowledge of the UAE and its many customs and regulations. 

That’s why it’s always advisable to contact a business consultancy firm which will advise you on the process, seek out the most suitable license and setup type for your business based on your needs and budget. 

We at Commitbiz can help you open a holding company in Dubai. Right from business incorporation to office space, we cover it all. Contact us today for more information.

Back to top