Company liquidation in UAE Free zone

How to setup a Subsidiary in Dubai, UAE?

UAE is one of the best countries for starting a business establishment. Many entrepreneurs choose Dubai, UAE as there are a lot of emerging business opportunities in the region. This article highlights the steps and process involved in Opening a Subsidiary Company in Dubai. Entrepreneurs already having a business in their home country who wish to move to Dubai and start a business entity in the region have many options to look forward to. Depending on their business requirements they can choose the right company structure. The low taxation, the improved business infrastructure, ease of doing business, reduced documentation, complete company ownership, top-class banking support, and more are few reasons why Dubai, UAE remains the top choice for business owners. Starting a Subsidiary Company in UAE Dubai is the perfect choice for Opening a Subsidiary Company for foreign investors. Opening a subsidiary is a strategic way of establishing a presence in a new market and expanding the business network easily. Registering a subsidiary in Dubai is relatively easy with a few additional attestations from the embassy and the Ministry of Foreign Affairs due to the compliance and laws. Else, the process is very straightforward and the investor can operate their branch in UAE as an independent entity driving business and contributing to the economy of UAE. Advantages of Establishing a Subsidiary Company in Dubai There are many advantages in establishing a Subsidiary Company in Dubai. Dubai offers the perfect infrastructure, economy, and governance. The business owner will have many benefits from being in Dubai. However, there are few attestation requirements and documentation to issue the trade license for the subsidiary company. Opening a Subsidiary in Dubai is lucrative to the business owner in many ways. Few of the benefits are as follows Full ownership of the company in Mainland or Free Trade Zone in the UAE Improved lifestyle, business infrastructure, and skilled labor, and more Favorable tax structure, cost effective company setup, ease of documentation Faster processing times, easy document attestation and approvals Ability to easily expand to newer markets Ability to take office space and get a bank account in UAE & more. So, there are many benefits in setting up a Subsidiary in Dubai for the business owners. They can easily expand their business to new geographies by making Dubai their base. Also, the ease of doing business in Dubai is an add-on for faster document clearance and obtaining the trade license for the company. Types of Subsidiary Companies in Dubai Subsidiary Company in Dubai is established either as a foreign company’s subsidiary or as a subsidiary of a local mainland company. There are two major business jurisdictions where foreign investors can start a subsidiary company in UAE. It is the Mainland and the Free Zone. The cost of setting up a subsidiary company in Dubai depends on varying business requirements. However, the trade license and a virtual office setup for the first year will cost approx. AED 28,000 for a services company. Also, a subsidiary can be set up with a general trading activity with a physical office. However, the cost of setting up the subsidiary company in Dubai will be significantly high for general trading with office type of business. By registering a Subsidiary company in UAE, the company can hire employees locally. It can also conduct trade operations in the region and abroad. In fact, the process of setting up a subsidiary is almost similar across the business jurisdictions as below. 1. Opening a Subsidiary in the Mainland of UAE In the mainland of UAE, the foreign company branch is set up as a new Limited Liability Company (LLC). If the foreign company wants to extensively expand in the UAE market, starting it as a new LLC Company is the ideal option for enhanced flexibility. Setting up a Foreign Company Subsidiary as an LLC Following are the steps for setting up a foreign company subsidiary as a Limited Liability Company in Dubai. Get the Parent Company Documents and the board resolution calling upon establishing a Subsidiary Company in UAE attested by the UAE Embassy in the home country. Get the Aforesaid attested Parent Company Documents Counter-Attested by the Ministry of Foreign Affairs Submit the Attested Company Documents and Board Resolution of the Parent Company to the Licensing Authority to start the subsidiary company’s incorporation process Reserve a company name and choose the business activities for your subsidiary company in uae Apply for the registration to the Department of Economic Development and submit the documents of the shareholders Make the required payment for obtaining the trade license Get the Memorandum of Association from the DED along with the Trade license Register the company with the Chamber of Commerce of the respective Emirate Open a Corporate Bank Account in UAE Apply for an establishment card for the company for applying visas for employees Benefits of Setting Up a Subsidiary in UAE Mainland Opening a subsidiary as a Limited Liability Company is beneficial for the parent company as they will not have to incur any liability. As a result, the subsidiary can act as an individual entity driving business in UAE. An LLC Company in UAE will have more flexibility such as hiring new employees, expanding the business by adding more office spaces, taking a warehouse, opening retail outlets, and more. Thus, being in the mainland of UAE the company can easily expand in the local market. It can as well as focus on the rest of GCC by building a robust distribution network in the region. 2. Opening a Subsidiary in the Free Zones of UAE Setting up a subsidiary company in UAE is beneficial for the investor as it is a global business center. Furthermore, UAE has a robust business networking setup for investors to easily grow their business. The Free Zones form a vital role in the business ecosystem of the UAE. Hence, most foreign investors prefer setting up their business in the Free Zones due to the ample business benefits and tax savings.

How to Open a Branch Office in Dubai?

Branch Office in Dubai is a popular business structure entrepreneurs from abroad prefer when they are looking to expand to the UAE. This article highlights the steps in setting up a branch office in the UAE. Often entrepreneurs are doubtful about ways to expand their business to the UAE. Opening a Branch Office of their company overseas is the most direct way for the business owner to maintain the ownership intact. Branch Office in Dubai So, a Branch Office is a fully own entity of the parent company but functionally it has its own characteristics. A Branch Office in Dubai, UAE can indulge in local business operations in the region. Additionally, through the branch office, the parent company can bring in their products and services to Dubai, UAE. They can hire employees in UAE, appoint a director or Managing Director to oversee the international operations by making Dubai the base. Moreover, a branch company in Dubai will enjoy all benefits offered by the specific licensing authority. They can take office space in Dubai, open bank accounts, and do business seamlessly in the region. Advantages of opening Branch office in Dubai Dubai is a perfect choice for foreign investors and entrepreneurs to start their company’s branch. Starting a branch office in Dubai is a hassle-free option if you hire a business consultants. Above all, there are numerous business advantages in setting up a new branch company in Dubai. As a global business hub, Dubai has a lot to offer investors. It has one of the best business infrastructure for entrepreneurs to easily expand their business to the UAE markets and beyond. 1. Get 100% Foreign Ownership The branch office is not a separate legal entity but as an extension of the parent company. Hence enjoy 100% ownership in the branch office and conduct the same business activities as the parent company. 2. Rent an Office Anywhere in UAE The branch office can be setup anywhere in Dubai as per the business requirements of the company shareholders. The company can opt for renting office space at a lower cost in Dubai Mainland to keep the administrative cost low. For organizations that do not require an office space at the center of the city, they can opt for offices with low rent anywhere in UAE. 3. Trade-in Mainland of UAE Setting up a branch office in the mainland of Dubai enables the company to actively trade-in the local markets of UAE. Branch Office allows a business to trade in the mainland of Dubai directly without the requirement of a local distributor, or agent. 4. Tax Benefits UAE has Zero Corporate and Income Tax, and Companies can gain maximum benefits out of this tax regime. By setting up a Branch Office in Dubai, the company can leverage the Double Taxation Avoidance Agreement (DTAA) and save tax in the home country. 5. Audit Report Requirement Auditing a large company with daily financial transactions is tedious. Setting up the Branch Office will help in legally tracking all the transactions between the branch and the parent company. 6. Low Administrative Cost The overall cost of opening a new branch is lower than setting up a new company in multiple countries. In UAE there is no requirement for branch offices to maintain audit reports. Also, taking a small office for your branch in Dubai will keep the administrative and costs low. 7. Cost-Effective Route to New Markets Setting up a Branch Office provides an easy way to enter a new market. The running cost of a branch office in Dubai is relatively lower than setting up a new company as a whole. Why Establish a Branch office in Dubai? So, a Branch office will help the business owner in many ways. It will help them easily start their business operations in Dubai. There are few procedures to follow for opening of a Branch office in Dubai. The branch office will have a separate trade license with the activities listed. They can provide seamless services to the customers across UAE and other regions by establishing a branch office in Dubai. A branch company in Dubai can operate independently and manage the business operations overseas. They can conduct business operations, prepare invoices, hire employees and more. Procedure to Open a Branch Office of a Free Zone or Mainland Company in Dubai There are certain procedures to open a branch office of a Free Zone or Mainland Company in Dubai. The Investor must get certain approvals and attestations from the respective authorities. Internally, the board of Directors, of the company must come to an agreement on opening a new branch in UAE. Then, get the documents attested from the UAE Embassy and counter-attested from the Ministry of Foreign Affairs in UAE. 1. Approval from the Board of Directors The approval from the board of directors is the first step. They must agree to the proposal of setting up a new branch company as part of the company’s expansion plans. They must pass the board resolution and sign to agree to set up the new branch company in UAE. The Board of Directors can appoint one director to carry out the setting up of the branch company and oversee the operations. 2. Branch Office Registration Following the board resolution, the company can proceed with branch registration. The Company can follow the above-represented steps to secure its business license and register the branch in mainland of Dubai. Aurion will assist you with end-to-end business support services to register your company’s branch office in Dubai in the most comfortable way. For a Free Zone Company with a service License category, the cost of setting up a branch office in Dubai is Approx. AED 30,000. The branch office will have the same name as the Parent Company with ‘Branch’ as the Suffix. It is entitled to conduct all the business activities of the parent company. Types of Branch Offices You Can Operate in UAE? A branch office in UAE can be set up two ways. FIrstly, with the Department

Mainland Company Liquidation in UAE

UAE is a land of business opportunities. There are numerous prospective business sectors where investors can conduct business and grow. However, there will be instances where a business investors require the liquidation of their company in UAE due to unforeseen events or changing the business jurisdiction from the Mainland to Free Zones, etc. Having the right know-how of the Company Winding up Procedures in the UAE will come in handy in such cases. There are a few steps to follow for Mainland Company Liquidation in UAE. Mainland company liquidation in UAE is a process through which ailing companies close down their business operations legally in UAE. It could be due to several reasons such as a crisis or financial downturn, the companies will have to opt for liquidating their companies. Mainland Company Liquidation – Key Highlights Mainland Company Liquidation in UAE enables companies to stop their trade and business operations of all forms. Investors can liquidate the company by submitting a cancellation request to the Department of Economic Development of the specific Emirate. The business authority will review the application and initiate the cancellation of the trade license accordingly. Also, the company must cancel all the employee visas, and terminate the related operations in UAE. The company must settle all outstanding balances, and debts to suppliers, banks, etc., before closing down. A company in UAE must close down legally. They must perform all the Winding Up procedures the right way to avoid fines. Company Liquidation is a mandatory procedure as per the Commercial Companies Law of UAE. Liquidating a UAE Mainland Company – Process Explained For the Liquidation of Mainland company in UAE, apply for the cancellation through the Department of Economic Development and acquire all the relevant clearances from: Ministry of Human Resources and Emiratisation Directorate of Residency and Foreign Affairs Relevant Water and Electricity Authority Leasing entity For companies with shares, the process is longer as it requires liquidating the shares, collecting debts, and paying the creditors before getting the DED approval for closing. If your company falls under the below legal form of business. You will have to appoint a liquidator for initiating the winding up of the company in the UAE. General Partnership Limited Liability Company Simple Limited Partnership Public Joint Stock Company Private Joint Stock Company What are the Steps to Winding Up a Mainland Company in UAE? The winding up of the company in the UAE mainland takes place in two stages: Stage 1: Notarized minutes of the shareholder meeting confirming the company liquidation and the appointment of a liquidator Arrange an official letter by a registered liquidator accepting the duty Apply for the company cancellation by filling the required form through DED or other approved channels Receive the liquidation certificate after the submission Publish the notice of liquidation in two local newspapers There are 45 days from the date of issue for the debtors to submit their claims Stage 2 Submit to the DED the declaration letter from the liquidator and the partners indicating no objection from any other parties during the grace period Collect required approvals of other government entities to cancel a license Cancel the firm card from the Ministry of Human Resource and Emiratisation Cancel the foreign partner’s visa sponsored by the company at the respective General Directorate of Residency & Foreign Affairs Submit all the above documents to get the approval for the final cancellation Pay the cancellation fees and receive the certificate of deregistration after paying the required fees Hence, in a nutshell, Company liquidation is a mandatory procedure in UAE for companies closing down. Canceling the Trade license, the right way will help the investors to start a new business establishment in other Free Zones. It also helps the investors to downgrade their business package, start a new company on the mainland, exit UAE and re-enter on a new visa, and more. What are the Three Major Penalties on an Expired Business License in Dubai? Be it businesses in the mainland, free zone, or offshore in the UAE, the business license has to be renewed yearly. The business license is the official and legal documentation that proves the existence of the business entity in the UAE. To conduct business operations in the UAE, the business has to always provide the trade license copy and number to check its authenticity. Non-renewals of business licenses incur penalties, so let’s examine them: 1. Monetary Penalties On the mainland, the DED has certain fines for businesses defaulting on their license renewal. There are various ways businesses defer their trade license renewals like: Business operations without the license Business without a renewed trade license Business with the additional office for an existing license without permissions The penalty fees vary across the mainland and free zones. You can check the DED website or the respective free zone website for the penalty for defaulting license renewal. 2. Company Black Listing A black listing is initiated against a company that fails to renew its trade license. Once the company is black listed they are not allowed to carry out any business or transactions. The bank accounts will come to a freeze. The company has to submit all the required documents to the government authorities for review to get them cleared off the black listing. 3. Restrict the Expansion of Business The non-renewal of business licenses will result in a stop in the future expansions of the businesses. Also, even in the event of liquidation, the default in the trade license renewal will come in the way of obtaining clearance and issuing the final license cancellation certificate. Hence small and large businesses have to keep track of their trade license renewals to avoid any penalty, black listing, or spoiled reputation. AURION’s team of professional Business Consultants will handle Company Liquidation steps in the UAE mainland depending on the investor’s specific requirements. The Team will provide end-to-end assistance in obtaining the Company License Cancellation Certificate the right way. Connect with our expert team to learn more about LLC Company

Company Liquidation in UAE Free Zone