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What is a holding company? How does a holding company function? | Advantages of having a holding company in Dubai.

A holding company is an organization or company possessing stocks of other companies. The holding company owns and controls these companies, decreasing the risk involved for owners, however, the company is not permitted to perform any business activities in the city.

Entities enabled under the holding company

  • Limited liability
  • Joint stock &
  • Free zone

Minimum Investment for a holding company in Dubai

  • There is no minimum share capital to set up LLC
  • A minimum of AED 10 million is required to set up a public shareholding company in the city
  • And AED 2 million to set up a private shareholding company
  • Free zone company establishments’ capital depends on the activities performed, although a minimum of AED 51,000 is required

There are two categories of a holding company, Onshore holding company, and Free zone holding company. Under a free zone holding company, foreign investors are eligible for 100% ownership, whereas, for an Onshore holding company, a local partner bearing 51% shares is mandatory.

The activities and regulations of a holding company are governed by a board of management or a director. Holding companies may also open subsidiaries in Dubai. A UAE legal representative is essential to register a holding company in the city.