Holding company in Dubai is a separate legal corporation whose principal function is to own and hold interests or assets in other businesses. The primary role of a holding company is that of a parent business, managing the assets, liabilities, and stock ownership of its subsidiaries.

Foreign investors have the option of registering or setup a holding company in Dubai and other Emirates of the UAE under the Dubai Company Act. This requires getting a holding company license and designating the company’s primary line of work as “activities of holding companies.” Holding companies in Dubai are subject to the following rules and regulations.

1. Business Activities: Holding companies are not permitted to engage in activities such as product production or service provision. Their major responsibility is to own and oversee investments in affiliate businesses.

2. Supervisory Structure must be in place for a holding company to oversee the activities of its subsidiaries. This may take the form of a director or a board of directors.

3. Holding companies are prohibited from participating in the day-to-day operations, strategic decision-making, or long-term planning of their subsidiaries. Their duty is to keep an eye on things rather than to run things themselves.

4. Corporate Bank Account: Holding corporations may set up corporate bank accounts to handle business-related financial activities.

5. Usually with the help of shareholders, holding firms must appoint a director in each of their subsidiary companies.

6. Provide Resources: Holding corporations are responsible for providing their subsidiaries with the tools they need to function successfully.

7. Risk Restrictions: There are constraints on the level of risk, such as foreign exchange and market hazards, that a holding company’s subsidiary companies can undertake.

8. Debt and Obligations: To the extent of its participation to each business, a holding company is liable for the obligations and debts of its subsidiaries.

9. Holding companies have the ability to regulate the transfer of capital to and from its subsidiaries.

10. Negotiation and Contracts: Holding firms negotiate the terms of agreements and contracts with their subsidiary companies.

Two types of holding company is available in Dubai

1. You can form a “Onshore Holding Company” by having a local partner control 51% of the company’s shares. This form is utilized to meet the requirements of UAE ownership laws.

2. A Free Zone Holding Company can be established in a UAE Free Zone, granting foreign investors full ownership and other advantages.

Some of the most important things to think about when set up a holding company in Dubai are the location, the available jurisdictions, and the documentation (shareholder resolutions, share capital information, director passport copies, business plans, and details about any subsidiaries).

• Establishing a holding company in Dubai has many benefits
• Opportunity to obtain UAE residency through property ownership
• significant tax savings
• capital gains and dividends
• 100% foreign ownership in Free Zones
• asset anonymity and risk mitigation
• strategic human resource management
• access to funds through corporate banking
• streamlined management of subsidiary companies
• simplified reporting.

To sum up, a holding company in Dubai, UAE is an advantageous corporate entity that provides numerous benefits to international investors and plays a significant role in managing investments and subsidiary companies.

Setup a holding company in DUBAI  requires high professionalism and good relationships with banks and authorities. With years of experience in structuring holding companies, we offer professional advice and services. Contact us for assistance.

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