Setting up a subsidiary company in UAE is a sleek move if your business goal is to venture into the international horizon. Starting a new business into a seemingly new geographical can be a risky proposition. As an investor, you have to keep in mind a number of factors that can hinder the business set up process including the new laws and policies, capability risk, and business capital. A subsidiary company can address the risk factors while giving you an extended business reach in UAE with 100% ownership rights. This approach gives you insight into the new location and you can run an independently managed company from abroad or within the UAE. As a foreign investor, you can only set up a subsidiary company in the UAE as a limited liability company as per the rules and regulations. At, Good Solutions Businessmen Services we establish distinctive connections with various government institutions and keep a close tab of the changing rules and laws to facilitate easy subsidiary company set up solutions to our customers.
How is a subsidiary different from a branch company?
A subsidiary company is a separate legal entity to the parent company and can be managed from overseas or within the UAE. Whereas, a branch company is an extension of the overseas parent company.
You can obtain 100% ownership of the subsidiary company in UAE with limited liability. However, the management and manpower of the subsidiary company must be in UAE and the parent company can be overseas or in UAE.
Procedure for subsidiary company formation
We have outlined the steps that you must perform to set up a subsidiary company.
- Register your company with The Department of Economic Development (DED) in Dubai.
- Appoint a local agent to handle the business registration process on your behalf.
- Reserve the company name.
- Obtain approval for your business activities and operation from DED.
- Notarize the documents and draft articles and the Memorandum of Association (MOA) for the subsidiary company in Dubai.
- Submit documents and required information of your business shareholders and managers to DED.
- Apply for a business trade license at Dubai’s Chamber of Commerce and Industry.
Documents required to obtain business trade license.
- Articles and the Memorandum of association for the subsidiary company in Dubai.
- Application form of the Trade license.
- A business name approval letter form DED.
- Notarized passport copies of the shareholders and managers.
- Clearance certificate from relevant government authorities.
Advantages of Subsidiary company formation
- Legal independence: A subsidiary company in UAE is an independent legal entity from the parent company. This makes conducting business easier in the region.
- Credibility to the business: It is easier to gage with important entities such as banks, service providers and business partners as a subsidiary company giving credibility to the business.
- Unrivalled access to a wider economy in a new location: Setting up a subsidiary company will help you in gaining an understanding whether your business has a niche in the new region.
- Cost efficiency: Subsidiary companies are incredibly cost effective as there is less tax liability due to small annual turnover and low overhead costs owing to its small size.
- Business ownership flexibility: You can obtain 100% ownership of the subsidiary company and issue bonds and shares to the public and obtain a quotation on a stock exchange.
- Reduced administrative overhead: Since the subsidiary company has its own management manpower bookkeeping, auditing and other administrative tasks can be shared and completed efficiently.
How can we help?
We are proficient in developing unparalleled business set up solutions from ground up and assisting customers in documentation and obtaining clearances and approvals.
Our service offerings enable entrepreneurs and SME’s to establish their business in UAE conveniently in a short span. Contact us now for a free business consultation with our adept business consultants.