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 several benefits from a holding company, including limited liability, asset protection, tax efficiency, etc. 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 relied on subsidiaries to conduct its businesses, the corporation avoids engaging in direct business activities. This separation of assets from subsidiaries’ liabilities protects shareholders from potential liability concerns. Moreover, holding corporations, favored by foreign and domestic investors in the UAE, provide advantages comparable to other business structures. They use subsidiaries to run their businesses, avoiding direct business activities. This strategic separation of assets from subsidiaries’ liabilities acts as a safeguard, shielding shareholders from potential liability concerns. Thus, the popularity of holding corporations among investors and business owners in the UAE mirrors the preference for this structure in various business contexts. 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. A holding company can be owned for as little as $1 in minimum capital.
Allowed Activities for Holding Company?
In the UAE, a holding companies can control and oversee the stock of other businesses operating in any industry. The holding company, commonly called the parent company, can legally own both tangible and intangible assets held by its controlled subsidiaries. The parent company cannot engage in direct business activity except for limited managerial control over its subsidiaries.
Why Open a Holding Company in UAE?
Establishing a holding company in Dubai and other parts of the UAE presents numerous advantages. Here are some key benefits:
Tax Efficiency with offshore status
Governmental support in the UAE
No minimum share capital requirement
Different company structures
How do you 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 proper agencies and also 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 to start a similar business in Abu Dhabi (ADDED).