Setting up a holding company in Dubai might seem complicated, but it can be made straightforward with the right guidance. When it comes to running a business, minimizing liabilities is essential for safety. Liabilities include things like accounts payable, interest payments, taxes, bills, loans, and more. Whether you’re in Dubai or anywhere else, dealing with these responsibilities can be a burden.
However, there is a solution to reduce these burdens – obtaining a Holding Company License in Dubai, UAE. This license allows you to own and manage various assets like real estate, stocks, or other companies, while separating them from your business’s liabilities and losses.
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What is a Holding Company?
A holding company is a business structure that owns assets and subsidiary companies—providing a tax-efficient and liability-limiting approach for businesses. Discover how a holding company acts as a parent company, controlling its subsidiaries and assets without direct involvement in their operations. Learn more about the benefits and function of holding companies in managing diverse assets within a group structure.
Holding companies solely focus on ownership and do not engage in managing subsidiaries or making decisions for them. Learn more about the distinct role of holding companies, which abstain from direct involvement in subsidiary management and asset administration within a group structure.
Advantages of opening a holding company in Dubai, UAE
Discover a host of advantages when opting for a holding company setup in Dubai. Enjoy a low 9% corporate tax rate on income exceeding AED 375,000, reduce liability risks, and gain entry into the local banking system. Holding companies facilitate swift business initiation, requiring no paid-up share capital, and offer cost-effective licenses. Additionally, they provide enhanced privacy, as ownership details are not obligatory for disclosure. Elevate your business prospects with the strategic benefits of a Dubai holding company.
Activities allowed for holding companies in Dubai
Holding companies in Dubai are restricted to specific activities, primarily centered around asset ownership. These permissible activities include holding physical properties (both commercial and residential), intellectual property, and subsidiary businesses. However, it’s important to note that holding companies are barred from engaging directly in manufacturing, selling goods or services, or the direct management of assets held within the company. This delineation ensures a focused and strategic role for holding entities in Dubai.
Types of Holding Companies in Dubai, UAE
In Dubai, UAE, there are various types of holding companies, each with its own characteristics:
1. Public Joint Stock Company (PJSC):
These holding companies are listed on stock exchanges like the Dubai Financial Market or the Abu Dhabi Securities Exchange, and they must have a minimum capital of AED 10 million.
2. Private Joint Stock Company (PJSC):
These holding companies are not publicly listed and require a minimum capital of AED 2 million.
3. Limited Liability Company (LLC):
Popular among small and medium-sized businesses, LLC holding companies have a minimum capital requirement of AED 300,000.
4. Free Zone Company:
These holding companies are registered in Dubai’s free trade zones, offering certain tax exemptions and regulatory benefits.
5. Offshore Company:
These holding companies are registered outside of the UAE, often used for holding assets or conducting international business.
Requirements for Set up a Holding Company in Dubai
Discover the specific requirements that Dubai holding companies must adhere to, including compliance with company law regulations.
- Select a management board to handle the subsidiary companies.
- Appoint directors for each of the subsidiaries.
- Oversee subsidiary activities. You can not directly perform any subsidiary activities.
- Provide Necessary capital to the subsidiary to stay a float
- Holding companies can not produce products or services
These requirements are ever-changing with the changing dynamic of the competitive market. You can choose a third-party company setup consultants who can help you through all these complexities.
Company Setup Consultants have experienced professionals who have been helping entrepreneurs, investors, and businesses through all these processes to make the most of their financial investments.
Steps to Open a Holding Company in Dubai
Starting a holding company in Dubai is almost the same as starting a small business. However, there are some unique requirements and guidelines that come with starting a holding company. The process of starting a holding company might confuse you if this is your first time dealing with this type of affairs. Company Setup Consultants can help you through the entire process.
If You Are Planning to Set up a Holding Company in Dubai, UAE! Send Us Your Inquiry
Here is the steps to get holding company license in Dubai, UAE:
1. Select a Company Name
You must choose a name that is unique in Dubai. The name you choose will hugely affect the success of your company, so you must make a wise decision. While choosing a name for your company, you must follow the rules and regulations of the local authority. For example, your company name must not contain any racial slur or disrespectful content.
2. Select a Location
You can either choose to start your holding company in the mainland or the free zone. we can retain 100% of the ownership of your company if you choose to operate in the free zone.
3. Pick a Management Board
Next, you will need to pick a management board that will set the policies of your organization. Additionally, they will supervise the business activities of the subsidiary companies.
4. Appoint Directors
After picking the management board, you must appoint directors for each of the subsidiary companies. The main duty of the directors is to oversee the finances, and the business operations undertaken by the subsidiary companies.
5. Business Consultants
The process of starting a holding company in Dubai is quite complicated compared to the process of starting a small business. So, it is best to take help from professional business consultants like Company Setup Consultants.
Company Setup Consultants will take care of the whole process of starting the holding company for you. Company Setup Consultants will also assist you in running your daily business operations.
Cost of Starting a Holding Company in Dubai
The cost of starting a holding company in Dubai will vary based on the size of your business operation and location. With a well-crafted business plan, you can reduce most of the unnecessary costs.
Here is a rough estimate of what it will cost to start a holding company in Dubai:
- Name approval costs: AED 600
- Initial approval costs: AED 120
- Memorandum of Association Drafting: AED 1,500
- Rent of Office Spaces
- Activity Fees: AED 15,000
- Licensing Fees: AED 10,000
Benefits of Starting a Holding Company in Dubai
Opening a holding company in Dubai comes with several benefits:
a). Tax Benefits:
While the UAE does have some taxes like VAT and corporate tax, they are relatively low, making it a cost-effective choice for running a holding company.
b). Risk Reduction:
Holding companies protect you from the debts and liabilities of your subsidiaries. If one subsidiary faces financial trouble, it won’t affect the others.
c). Access to UAE Banking:
You can easily open a corporate account with UAE banks and apply for loans to invest in assets.
d). Quick Setup:
Holding companies are straightforward to establish, and you can start with no paid-up share capital, saving on initial costs.
e). Flexibility:
Holding companies can be easily moved to different jurisdictions with more favorable tax conditions while keeping your operations intact.
f). Privacy:
Dubai’s holding company structure offers better privacy as ownership details don’t need to be disclosed.
g). Strategic Location:
Dubai’s central location in the Middle East facilitates expansion into Asian, African, and European markets.
h). Strong Infrastructure:
Dubai boasts modern transportation, ports, and telecommunications, simplifying business operations.
i). Government Support:
The Dubai government actively encourages foreign investment, offering incentives and assistance for business growth.
j). Diverse Workforce:
Dubai provides access to a highly skilled and multicultural workforce.
k). Investment Flexibility:
Holding companies can manage shares and assets across various business sectors, offering investment versatility.
l). Solid Legal System:
Dubai’s transparent and well-established legal system, based on common law principles, eases the process of setting up and running a business.
Can I start a holding company in Dubai?
Starting a holding company in Dubai is a straightforward process. You just need to file the articles of incorporation in your chosen jurisdiction, whether it’s on the mainland or in a free zone.
What is the tax rate for UAE holding company?
The tax rate for a UAE holding company is an effective 9% on its income or profits. If the jurisdiction’s tax rules don’t align with this 9% rate, the UAE’s Corporate Tax Law is used to calculate the 9% effective tax rate (ETR).
How can we help to start holding company in Dubai?
If you want to start a holding company in Dubai, UAE? you will get holding company licenses in Dubai . This is because Company Setup Consultants has helped numerous entrepreneurs from all over the world start various businesses in the UAE. Contact us today and hit the ground running.
To Speak with our Experienced Business Consultants for further information and assistance, call us at +971-582-595-164. Send a WhatsApp Message for Chat Query on +971 582595164 or email us at info@companysetup.ae.
