Holding Company Setup in Dubai

If you wish to expand your business and secure your assets, a holding company setup in Dubai is the smart solution. The Emirates has one of the world’s most investor-friendly markets and a lively business environment that offers numerous advantages, including a booming location, access to global markets, and streamlined regulations.  

The business-friendly policies provide an ideal platform for managing assets, shares, or subsidiaries by setting up a holding company in Dubai. A holding company can be opened in either a freezone or the mainland, and offers investor better control over investments and operations under one umbrella. 

This guide will walk you through everything including meaning of a holding company in Dubai, key benefits and the process to start one. 

What is a Holding Company in Dubai, UAE: Explained 

A holding company is a legal entity that manages assets, shares, or interests in other companies without directly engaging in their day-to-day operations, such as selling products or services, manufacturing activities, and other direct business operations.  

It enables entrepreneurs to control multiple entities or investments under one corporate structure while leveraging tax benefits and the business-friendly environment in Dubai. Through a holding company setup in Dubai, entrepreneurs can streamline operations, reduce risks, and easily manage subsidiaries and investments, while diversifying and expanding their business ventures in its thriving economy.  

A holding company license in Dubai helps them manage multiple investments and assets efficiently and achieve their strategic objectives, thereby driving growth. 

Uses and functions of holding company in Dubai 

Holding companies are used across various industries, especially by large enterprises with diverse product lines, such as FMCG companies producing skincare, hair care, and other products.  

In fact, many publicly traded firms are structured as holding ventures, allowing for simplified management with one central company supervising several subsidiaries, where each entity operates independently. On the other hand, small companies and individual entrepreneurs also benefit from these structures. 

Let’s learn about the function of a holding company with a few examples:- 

An entrepreneur who wishes to earn rental income from an apartment building may establish an LLC to own the building and a holding company to own the LLC. 

Similarly, if a business owner wants to expand operations, they could set up a holding company to raise capital by selling shares, funding new ventures, etc. 

Holding companies in Dubai are allowed to engage in various activities, including :

• Ownership of Subsidiaries
• Investment in Assets
• Management and Administrative Services
• Intellectual Property Management
• Financial Services
• Tax Optimization  
• Asset Protection
• Receiving Dividends
• Corporate Restructuring
• Consultancy and Advisory Services

What are the key benefits of opening a holding company in UAE? 

Starting a holding company in Dubai offers numerous benefits for those looking to expand and protect their assets. 

• Asset Protection : A holding company safeguards the assets from financial risks associated with individual subsidiaries by separating ownership and control.  
• Tax Efficiency : The favorable tax conditions in Dubai allow holding companies to maximize profitability.  
• Centralized Control : A holding company streamlines management by combining control of multiple businesses under one entity.  
• Risk Mitigation : A holding company isolates liabilities within individual subsidiaries and protects other assets and ventures from the financial problems.  
• International Expansion : With a strategic location, excellent infrastructure, and investor-friendly policies, the UAE provides an ideal base for holding companies looking to enter global markets and manage international operations efficiently. 
• Access to Global Markets : Through a holding company setup in Dubai, business owners can have easy access to the Middle East, Africa, and Asia, availing significant opportunities for business growth.  
• Access to Free Zones and Mainland Options : Dubai is home to diverse business jurisdictions offering unmatched flexibility, 100% foreign ownership, expanded access to local and GCC markets, and various tax exemptions. This allows holding companies to optimize their structure while maximizing benefits. 

Structures for starting a holding company in Dubai 

Depending on the business goals and operational needs, business owners can choose a structure for their holding company in Dubai:

• Limited Liability Company (LLC) : LLC is a popular choice for small and medium-sized enterprises (SMEs) that allow control of assets and subsidiaries within the UAE. Besides, there is usually no minimum capital requirement for LLCs holding company setup in Dubai, making it accessible for those aiming for asset management within the UAE.
• Free Zone Company : A holding company in Dubai free zone can enjoy attractive benefits such as 100% foreign ownership, tax exemptions, and minimal stringent regulations, and focus on leveraging the tax efficiency and easy market access of Free Zones.
• Offshore Company : Although an offshore holding company is registered outside of the UAE and outlawed from conducting business within the country, it can be used for asset protection, tax optimization, offshore investment management, or international business operations.

Since each structure caters to different business strategies, business owners must understand their operational needs, geographic focus, and financial objectives to leverage the flexibility and a range of benefits offered in Dubai.  

Step-by-step procedure to start a holding company in Dubai 

A holding company setup in Dubai requires careful planning and implementation. The process involves a series of steps that ensure that the setup is optimal and working in your favour.  

Step 1. Choose the Jurisdiction: 

Based on your business goals and requirements, select a jurisdiction between Free Zone and Mainland. While Free Zones offer complete foreign ownership and several distinct advantages, the Mainland provides broader market access and credibility. 

Step 2. Define Business Activities and register trade name:

Define the intended business activities for proper licensing and to ensure compliance with local regulations. For example, managing investments, holding intellectual property, or controlling subsidiaries. 

Also, choose a suitable name and get it registered with the authorities. 

Step 3. Comply with Legal Requirements:

Arrange and authorize all the legal documents, including the Memorandum of Association and Articles of Association. Also, make sure that they fully comply with the UAE regulations. Seeking professional help from Dubiz can save you from filling in the wrong information and getting rejected. 

Step 4. Obtain the Required Licenses:  

Once you have defined your business activities and selected a jurisdiction, apply for a holding company license in Dubai by fulfilling all the requirements of the regulatory authority. Make sure to cross-check every document before submission and renew the license consistently before its expiry. 

Step 5. Open a Corporate Bank Account:

A corporate bank account in Dubai helps manage business finances effectively and maintain accurate financial records of all business transactions. Therefore, choose a reliable bank that aligns with your financial needs and banking goals. Accordingly, prepare all the documents and submit them to the bank officials. 

Step 6. Appoint Key Personnel :

The key personnel required for a holding company may include directors, shareholders, and management team members who are well-qualified in their field. Provide a clear view of their role and responsibilities, and what is expected of them.   

Step 7. Establish Subsidiaries: 

Set up subsidiary companies that will be owned by the holding company. Plan the ownership percentage of each subsidiary, and create management roles and operational frameworks for seamless operations. Also, make sure that each company fully understands its purpose and keeps proper records of ownership. 

Step 8. Implement Reporting Mechanism:

Develop strict and clear systems for financial reporting, governance, and management of all subsidiaries. Implement a good accounting software and reporting rules, and train the staff about their reporting duties. Make sure to review the reports regularly for full compliance. 

Key requirements to set up holding company in Dubai 

The documentation requirements for a holding company setup in Dubai vary based on the applicant, whether it is an individual or a corporate entity: 

For Individuals: 

• Passport copies of all shareholders and directors 
• Proof of residential address (utility bill or bank statement) 
• UAE visa and Emirates ID 
• Professional resume/CV of shareholders 
• UBO Declaration letter 
• All-inclusive business plan 
• Proposed company names (at least three) 

For Corporate Entities: 

• Certificate of Incorporation 
• Memorandum of Association and Articles of Association 
• Board resolution authorizing the establishment of the holding company 
• Power of Attorney (if required) 
• A passport copy of the Managing Director 
• Proof of address 
• UBO Declaration letter 
• Comprehensive business plan 
• Three proposed company names 

Please note documents can vary based on your business needs. We can help you with more detailed information, so please contact us. 

Cost involved in a holding company setup in Dubai 

The cost of a holding company setup depends on the specific setup, location, and visa requirements. The common costs involved in the Mainland and Free zone setup are as follows: 

Mainland: 

• Trade name registration: AED 735* 
• Trade name registration (Arabic): AED 10500* 
• Additional cost for holding/investment activity: AED 15000* 
• Initial approval: AED 235* 
• MOA: AED 1000* 
• Investor visa and status change: AED 3000* 
• Medical test: AED 400* 
• Biometrics scanning: AED 400* 

Since the office space is mandatory in the Mainland company setup the cost may vary depending on the location and size of the acquired space. 

Freezone: 

Free zone setup package generally starts at AED 12900*, exclusive of visa, and the additional costs are also waived off. 

Please note that costs can vary* 

Conclusion 

Within Dubai’s welcoming environment, low taxes, excellent location, and supportive regulations, starting a holding company can be a smart choice, especially for those looking to expand their business and protect their assets.  

A holding company setup in Dubai not only helps manage multiple businesses and investments but also preserves the overall financial health of the company through strategic distribution of financial and legal risks. 

However, the setup process might entail certain complexities, especially for those who are unfamiliar with UAE business laws.  

Start your holding company with Dubiz! 

Dubiz will assist you every step of the way, helping you prepare the necessary documents and secure the proper approvals for your Holding company license in Dubai. With the support of their professional experts, you can focus on establishing your holding company in Dubai and growing it competently.  

Fast-track your business setup in Dubai with our specialists. 

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📧 Email: info@dubiz.co  

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