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Dubai mainland allows the formation of different types of companies as per their needs. Although the laws and regulations are not as lax as Dubai Free Zones, the Mainland also offers lots of benefits, both economic and legal. To leverage on these, one can form a holding company, a special type of company that does not operate like a conventional one. A holding company on its own does not produce products or offer service; it owns stocks or shares of other companies, making it easy to start and manage without hassle of production and service. Formation and successful running of holding companies have been on the rise globally. The story is the same in Dubai. With the guidance and advice of CDA, Dubai Mainland can be the best place if you’re looking to form a holding company. These are the top 5 reasons to form a holding company in Dubai, Mainland.
Some of the major tax regimes which are prevailing in the UAE include the CT and VAT along with these taxes there are other tax advantages related to the capital gains tax and withholding tax etc. Let’s go through each and see how it affects
A 9% CT is charged on the profits based on the threshold as per the regime. Profits below this threshold are not taxed. The 9% CT is the lowest rate of tax charged in comparison to other GCC countries.
VAT applies to holding companies only if they engage in taxable activities by providing chargeable services to their subsidiaries or other third parties. The VAT is 5% in Dubai Mainland.
Dubai doesn’t have personal income tax. Individuals don’t have to pay tax on their salaries and other personal earnings.
There are no capital gains or withholding taxes on dividends, interest, or royalties. This implies profits can be distributed among investors without tax loss.
Customs duty
Dubai is positioned between Asia, Africa, and Europe. This provides connectivity with over 2.5 billion people in 4–8-hour flights. Although it can be said the same for the majority of the Middle East, what makes Dubai (UAE) different is that it offers business-friendly stability in a region of political volatility. UAE also has great trade and political relations with countries worldwide, including the US, China, and European nations. Dubai is also a popular tourist destination, attracting millions of tourists annually. This is a huge plus if you’re a native or a foreigner looking to start a holding company in Dubai.
Now you know the importance of Dubai as a location for your holding company. Now let’s look at the benefits offered by setting up a holding company. A holding company by structure separates different business assets and liabilities across subsidiaries. Each subsidiary is a legally separate entity. The holding company can better protect itself and its key assets from being impacted by lawsuits or debts incurred by any single subsidiary because it keeps various business functions within separate entities. Holding companies allow reducing overall exposure to market downturns or industry-specific risks by holding investment across multiple sectors or geographic locations. Holding companies can centralize and protect key assets, such as intellectual property, real estate, or capital, by holding them directly, minimizing exposure to operational risks, as these assets are insulated from claims against individual subsidiaries.
Operating a holding company in Dubai can give you enhanced control through centralized decision-making. This also ensures efficient allocation and use of resources across the group, optimizes investments, and avoids redundant efforts. Holding companies also generally have standardized policies and regulatory compliance. This approach promotes consistency across the group, reducing legal issues that might arise from differing practices across subsidiaries. By consolidating financial statements for reporting purposes and having direct oversight of subsidiary finances, a holding company can get a clear picture of the company’s overall status. In Dubai CDA can offer you the best service for this.
Let’s look at investing in Dubai; apparently that’s what a holding company is all about. In Dubai Mainland, your holding company can invest in diverse sectors to establish a presence in the region. These sectors might include the following
Investing in any of these sectors is a must if you’re looking to start a holding company to leverage Dubai’s strong growth potential.
We’ve seen 5 major benefits of starting a holding company in Dubai. But it’s not limited to these. As you have seen on the site, the possibilities of starting a business in Dubai are endless. All the more so if it’s a holding company. By having an experienced and skilled team like CDA, you can set up a holding company in Dubai hassle-free. We assure you that our team will enable you to get all the registration and legal requirements sorted whereby ensuring the compliance and reducing the chances of the penalties.
To know more about setting up the companies, connect to our team now.
