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Mastering Holding & Foreign Branch Setup in Dubai

With Adam Global, every step’s a sure bet up. 

Adam Global - Your Global Partner in Business Excellence

Dubai’s pro-business environment has made setting up a holding company and opening a branch of a foreign company in Dubai increasingly popular. The city’s tax benefits, and global connectivity attract businesses seeking asset diversification and market expansion. As a result, more firms are exploring how to open a representative office in Dubai and establish a strong local presence. 

But how do you navigate the process? How to start a branch office in Dubai or how to setup a holding company in UAE? This is where Adam Global’s expertise shines. Our team is adept at guiding businesses through every step, from understanding how to open a representative office in UAE to ensuring the smooth incorporation of a holding company in Dubai. 

Know More About Holding Company Formation

Know More on the Benefits of Setting up Holding Company in Dubai, UAE.

About Foreign Branch & Holding Company Setup in UAE

Feature Foreign Branch Holding Company
Legal entity Extension of the parent company Separate legal entity from the parent company
Liability Parent company is liable for all the debts and liabilities of the branch company Holding company is not liable for the debts and liabilities of its subsidiaries
Business activities Can carry out all business activities that are approved by the relevant local authority that the parent company is authorized to carry out Does not carry out any business activities of its own
Management and control Managed and controlled by the parent company Managed and controlled by the holding company
Taxation Subject to the UAE corporate tax laws. Subject to its own tax laws
Costs Foreign Branch is expensive in Mainland. Holding company less expensive in mainland. Holding company less expensive in mainland.
Benefits Can be used to enter the UAE market quickly and easily Can be used to take advantage of tax benefits and to protect the assets of the parent company

Understanding Holding Company Setup in UAE

Through a holding company license, a business can own shares in other businesses in UAE while remaining out of the day-to-day management of such businesses. It is a specific kind of parent company that owns stock in other businesses but does not actively manage them.

Benefits of Opening a Holding Company in UAE:

  • Asset Protection: Setting up a holding company in Dubaisafeguards valuable assets from operational business risks.
  • Tax Efficiency: The UAE's favorable tax regime offers significant benefits when you incorporate a holding company in Dubai or other emirates.
  • Diversification: Allows businesses to manage multiple investments across sectors, enhancing growth potential.
  • Consolidation:Streamline revenues and operations from various subsidiaries under one umbrella.
  • Strategic Position: The UAE's global connectivity makes it ideal for those pondering how to open a holding company.
  • Legal Flexibility: Enjoy the benefits of the UAE's evolving corporate laws and regulations tailored for holding structures.

Process of Holding Company Setup in UAE

To establish a Holding Company in the UAE, entities begin by selecting the appropriate jurisdiction within the country. They then submit a detailed business plan and the necessary documentation, highlighting the company's structure and objectives. Upon review and approval by the relevant UAE authorities, the company secures the required licenses. With all formalities completed, the Holding Company is officially set up and can start its operations in the UAE.

Required Conditions to Setup Holding Company in UAE

Here are the conditions you need to maintain to set up a holding company in the UAE: 

  • The holding company must be legally incorporated in the UAE.
  • The holding company must have a paid-up capital of at least AED 1 million in case of selected freezones, not required for mainland.
  • The holding companies in mainland need to obtain a trade license from the Department of Economic Development (DED) and for freezone companies the approval is required from the respective freezone authorities.
  • The holding company must comply with all applicable laws and regulations in the UAE.

    • Understanding Foreign Branch Setup in UAE


    When a foreign firm incorporates a branch in Dubai, the UAE's financial hub. This enables the international corporation to establish a physical presence in Dubai and broaden its business operations throughout the United Arab Emirates and the wider Middle East.

    Benefits of Opening a Foreign Branch in UAE:

  • Direct Market Access: Quickly tap into the UAE's thriving market by opening a branch of a foreign company in Dubai.
  • Brand Consistency: Maintain your global brand identity seamlessly in the UAE.
  • Cost Efficiency: Due to the lack of a share capital requirement, entering the UAE market is simple and extremely cost-effective with a branch established in Dubai. Operational expenses to run branch offices have a good chance of increasing without investing significant upfront expenses.
  • Easy Licensing:Streamlined processes make setting up a branch office in UAE straightforward.
  • Local Insights:Gain a deeper understanding of the UAE market and consumers.
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Condition You Need To Maintain To Open Foreign Branch In UAE

There are several conditions that foreign companies need to follow to open a branch in the UAE. These conditions vary depending on the emirate in which the branch is being set up. However, some of the most common conditions include:

  • The parent company must be legally incorporated in its home country.
  • The parent company must have a good standing in its home country.
  • The branch must obtain a trade license from the Department of Economic Development (DED).
  • The branch must comply with all applicable laws and regulations in the UAE.

Legal Structures for the Following

Mainland

  • Holding Company: Offers broader access to the UAE market, with no restrictions on business locations. 
  • Foreign Branch: Direct operations in the local market, with a requirement for a local service agent. 

Freezone

  • Holding Company: Provides 100% foreign ownership, and a simplified setup process. 
  • Foreign Branch: Allows full ownership in a designated zone, with tax benefits and no need for a local service agent. 

Offshore:

  • Holding Company: Ensures asset protection, confidentiality, and ideal for international operations. 
  • Foreign Branch: Facilitates international business activities with minimal setup requirements and tax advantages. 

Authorities That Provide Holding and Foreign Branch Setup in UAE

Although all the authorities provide holding and foreign branch setup in UAE but here are some of the recommended authorities and how they help: 

 

Zone/Authority Holding Company Foreign Branch
Dubai Department of Economic Development (DED) Allows establishment in Dubai's mainland. Permits setup in Dubai's mainland. Typically requires a local service agent.
Dubai International Financial Centre (DIFC) strong> Prime location for financial services, investments, and assets. Allows branches in banking, financial, and professional services sectors.
Abu Dhabi Global Market (ADGM) Robust framework for financial services-focused companies. Facilitates branches, especially in the financial sector.
Jebel Ali Free Zone (JAFZA) Permits setup with benefits like 100% foreign ownership. Facilitates the establishment of foreign branches.
Ras Al Khaimah Economic Zone (RAKEZ) Conducive for setup with various benefits. Allows the establishment with a streamlined process.
Sharjah Media City (Shams) Provides options, especially for media and creative sectors. Allows the establishment of foreign branches.
Ajman Free Zone (AFZ) Offers opportunities for setup. Permits the establishment of foreign branches.

This table provides a concise overview of the holding company and foreign branch setup options across various zones and authorities in the UAE.

How Adam Global Can Help?

Adam Global assists businesses in the UAE by streamlining the setup of both Foreign Branches and Holding Companies. Their services include: 

    Adam Global assists businesses in the UAE by streamlining the setup of both Foreign Branches and Holding Companies. Their services include:


  • Consultation:Understanding business objectives.
  • Documentation & Licensing: Guiding through paperwork and obtaining necessary permits.
  • Compliance:Ensuring alignment with UAE laws.
  • Financial Guidance:Assisting in banking and tax benefits.
  • Operational Support: Offering advice on location, staffing, and asset management.

    • In essence, Adam Global provides end-to-end support, making business establishment in the UAE efficient and hassle-free.

Frequently Asked Question

All you need to know about DIFC company formation in the UAE. Browse through this section to get a quick overview or Schedule a consultation with an expert business advisor

A holding company in the UAE is an entity that manages assets, stocks, or shares in other companies. In contrast, a branch of a foreign company operates as an extension of its parent company, conducting business under the same identity in the UAE.
To set up a branch office, you'll need to obtain a license from the relevant authority, either the Department of Economic Development (DED) for mainland or the respective free zone authority.
A representative office is a type of foreign branch that's limited to promoting its parent company's activities. It cannot conduct business operations. The process to open a representative office in Dubai involves obtaining a license from the DED or the chosen free zone.
Dubai offers numerous benefits for holding companies, including asset protection, tax efficiency, and the ability to consolidate revenues from multiple subsidiaries. The process of incorporating a holding company in Dubai is also streamlined, making it a strategic choice for investors.
The process is similar across emirates. You'll need to approach the Department of Economic Development or the respective free zone authority in the chosen emirate. They will guide you on how to start a representative office in the UAE based on their specific regulations.
The cost varies based on the jurisdiction (mainland, free zone, or offshore) and the specific emirate. It's advisable to consult with a local business setup consultant for detailed cost breakdowns.
Dubai offers a strategic location, world-class infrastructure, and a dynamic business environment. Opening a branch of a foreign company in Dubai provides direct access to a vast network of markets and a diverse consumer base.
It's crucial to consult with local experts or business setup consultants. They can guide you on how to open a representative office in Dubai or a foreign branch, ensuring compliance with all local laws and regulations.
Yes, when you set up a holding company in Dubai or other emirates, it can own real estate properties, depending on the jurisdiction and specific regulations of the area where it's established.
The timeframe varies based on the chosen jurisdiction and the specific requirements. However, with the streamlined processes in the UAE, especially when you're looking to incorporate a holding company in Dubai, it can be relatively quick, often within a few weeks.
A foreign branch can only engage in activities mentioned in its license and which its parent company undertakes in its home country. It's essential to understand how to start a representative office in UAE and its limitations.
A representative office is limited to promoting its parent company's activities and cannot make direct sales in the UAE. In contrast, a branch office can conduct business operations like its parent company.
Yes, with the right procedures and approvals, a foreign branch can be converted into a subsidiary or a holding company. It's essential to know the steps on how to open a holding company or a subsidiary to ensure a smooth transition.

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