Dubai is the UAE’s most important trading network and hosts a great number of companies operating in all industries. Dubai’s legislation allows for free trade which is why it is probably one of the UAE’s most attractive cities for foreign investors. One can open onshore companies inside the Emirate or in one of its free zones.
Many foreign companies wanting to have an established presence in Dubai open branch offices or subsidiaries. The main difference between a branch office and a Dubai subsidiary resides in the independence the subsidiary has. While the branch office is tied to the parent company, the subsidiary will be able to conduct its own operations in Dubai.
With a vast knowledge of company formation in Dubai, our specialists can help those who want to set up a subsidiary in UAE in 2022 .
Characteristics of subsidiary companies in Dubai
Foreign companies seeking to have a presence in Dubai will choose the subsidiary because it is a legally independent company operating under the laws of the UAE and the Emirate it is established in. Compared to the branch office, which is not considered a legal independent structure, the parent company of a subsidiary will be able to decide on completing other activities through a Dubai subsidiary which can increase its profits substantially. Even if the subsidiary is regarded as an independent entity, the foreign company will act as a shareholder, therefore will have a decisional power of the subsidiary.
Those who want to create subsidiary companies in UAE should consider the following:
- The subsidiary will undertake its own operations under one of the business structures covered by the UAE and Dubai legislation;
- The private and public companies are the most employed types of structures for subsidiaries in Dubai;
- It is possible for a foreign company to establish a subsidiary in a Dubai free zone under the form of a free zone company;
- The subsidiary will be subject to the tax legislation in Dubai which will favor both the local and the parent company;
- The subsidiary can benefit from enhanced protection under the double tax agreements signed by the UAE.