Did you know that you can create your own Holding Company in the United Arab Emirates if Dubai is on your list of potential business destinations? You can gain a number of benefits from a holding company, including limited liability, asset protection, tax efficiency, and many more.
Fortunately, setting up your holding company in Dubai is not difficult and doesn’t cost much money. In this post, we will go into great length about what a holding company is and how it functions in the UAE, as well as the advantages of having one there, the sorts of businesses that are permitted, the requirements to establish a holding company, the associated fees, and much more.
What is a Holding Company?
A holding company is a business that holds the assets and stock of other businesses. Although it has its subsidiaries to run its businesses, it does not conduct any business activities directly. By separating its assets from the liabilities of its subsidiaries, it also shields its shareholders from liability concerns.
Holding corporations are favored by both foreign and domestic investors and business owners in the UAE, just like many other business structures. It is desired by people who want to enjoy ownership advantages and consolidate their company investments into a single entity.
We’ll now look at how the holding corporations in the UAE run their businesses there.
How Do Holding Companies Work In UAE?
Holding businesses operate within the UAE’s legal and regulatory framework for business. Holding firms are permitted to possess stock in other businesses but are not permitted to engage in commercial activities like trading, producing goods, or offering client services.
It is easier to start a corporation and lowers barriers to entry because there is no specific paid-up capital requirement for you to possess a holding company in the UAE. A holding company can be owned for as little as $1 in minimum capital.
Allowed Activities for Holding Company?
In the UAE, a holding company is allowed to control and oversee the stock of other businesses operating in any industry. The holding company, often known as the parent company, may also be the legal owner of the tangible and intangible assets of the subsidiaries under its control. Except for a limited amount of managerial control over its subsidiaries, the parent company is not permitted to engage in direct business activity.
Why Open a Holding Company in UAE?
Creating a holding company in Dubai and other parts of the UAE has several advantages. Here are some of them:
- Limited liability
- Tax Efficiency with offshore status
- Establishing Credit
- Governmental support in the UAE
- No minimum share capital requirement
- Different company structures
- Greater privacy
How to Open a Holding Company in UAE?
There are several crucial measures that you should take before forming your UAE holding company. These consist of:
selecting the appropriate commercial activity for your holding company
Getting permission from the appropriate agencies and authorities
Depending on where you intend to set up your business, you must obtain a trade license from the applicable Emirate or free zone government.
For instance, the Department of Economy & Tourism in Dubai (DED) is the licensing authority if you want to base your holding company there.
You must receive a license from the Abu Dhabi Department of Economic Development in order to start a similar business in Abu Dhabi (ADDED).
registering with the free zone authorities or the Ministry of Economy (MOE)
opening a business bank account in the UAE
applying for a visa,