UAE is the best choice for starting a Subsidiary Company for foreign investors. It is a great business opportunity for them. Expanding the business to Dubai and choosing UAE as the base helps to reach new levels.
Also, UAE is the perfect place to hire global talents and collaborate with other businesses. It also helps to secure key business contracts to tap into new markets. Hence, setting up a subsidiary company in UAE enables foreign investors to start their business operations quickly.
Thus, there will be minimal challenges in terms of business compliance for the company to start operating in the UAE.
Starting a Subsidiary Company in UAE
There are two major business jurisdictions where foreign investors can start a subsidiary company in UAE. It is the Mainland and the Free Zone.
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.
- 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.
The 100% foreign ownership of the company is a key trigger driving the foreign investors to the free zones of UAE. Meanwhile, opening a subsidiary company in the free zones of Dubai is a straightforward process for foreign investors.
However, compared to a new company registration it requires little documentation to be prepared for compliance purposes.
Documents Required
The following documents are required for opening a subsidiary in UAE. The parent company documents must be attested in the home country by the UAE Embassy and counter-attested by the Ministry of Foreign Affairs in UAE.
Thus, there is a thorough compliance process followed in UAE to ensure the parent company is legally incorporated and has a good legal standing in the home country.
Documents Required for Subsidiary Company in UAE
- Parent company documents – Memorandum of Association, Certification of Incorporation, Good Standing Certification
- Board Resolution for opening the branch in UAE and appointing a manager
- Power of Attorney to the Manager
- Manager Passport Copy, Photograph
- Application form for registering a branch in Free Zone/Mainland
The newly incorporated subsidiary company in Dubai enables the investor to conduct business operations on its own as an in depend entity in UAE.
In addition to that, they can avail tax benefits by operating from Dubai. The Subsidiary can leverage the Double Taxation Avoidance Agreement and save taxes eventually. They can obtain the Tax Residence Certificate from UAE Federal Tax Authority as proof for tax savings in their home country.
Hence, in a nutshell, opening a subsidiary company in UAE is highly beneficial for the foreign investor for their business growth and expansion, the tax savings, 100% ownership of the company, expansion across UAE, and GCC markets.
Why Choose UAE for Opening a Subsidiary Company?
UAE is the perfect choice for Opening a Subsidiary Company for foreign investors. It 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.
To know more about opening a Branch Office of a Free Zone or Mainland Company in Dubai, read our blog.
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