A holding company in UAE incorporates subsidiary business entities, buys and owns the outstanding stocks of other companies, which it then manages. It doesn’t produce any products or delivers services. The company is ideally involved in shareholding, managing legal liabilities, trademarks, and patent ownership. Economic uncertainty, future mergers, and external threats are core characteristics around which a holding company operates.
Benefits of having a Holding Company in the UAE
Holding company structure is leveraged by businesses of all sizes-big, medium, and trim. Some of the publicly traded Multi-National Companies are Holding Companies. Even entrepreneurs can utilize this opportunity if they wish to invest in real estate.
UAE offers a lucrative opportunity for Holding companies by :
– Reducing administration and cutting across the red-tape
– Allows for holding and managing assets in a secure manner
The absence of corporate, capital gains and dividend taxes can prove to be of immense value for people searching for avenues to set up a holding company.
Here are some benefits of registering a Holding company in the UAE:
1- Tax Benefit:
Registering a holding company is a smarter option over individual business ownership. So, even while leaving UAE, companies are not liable to pay taxes for the income earned abroad by holding companies. Secondly, for entrepreneurs and investors, purchasing property in UAE through a holding firm attracts massive tax cuts. Also, the no-taxes particularly benefit people residing overseas. As they can set up this structure to hold assets elsewhere and receive income/dividends in UAE.
2- Simplified Banking:
We understand the hassle of opening up a corporate bank account in any country, including the UAE, especially for a newcomer. This process can be simplify riddled with rigmaroles to some extent with the help of resident visas. A citizenship permit and UAE business license by Business Link UAE can make the process simpler and faster. As internet banking has become commonplace these days, customer-friendly internet banking platforms offered by all UAE corporate banks can aid in accessing funds from almost anywhere on the globe.
3- Multi-Ownership :
A holding company’s primary business is to hold controlling interests in securities of other companies. It becomes pertinent to have more versatility in ownership choices. This flexibility in investment decisions reduces the risk of personal sensitivity to danger and improved the degree of protection. Against threats of loan obligations and litigation. This distribution of ownership over varied subsidiaries serves to pave ways for better investment opportunities, aid inflexible decision-making, and mitigate risks to a considerable extent.
4- Better Management and Control:
Management abilities are significantly improved in holding companies as it’s not solely focusing on minting money but concerned extensively with managing subsidiary companies. Two aspects of management namely: Legal and Human Resources witness an efficient utilization of resources.
Streamlining of legal changes across subsidiary organizations becomes easy with a Holding company. As employees can situate more efficiently, their skills can be optimally utilized, making the human resources function much easier.
A bird’s eye view can maintain by the Holding company wherein all reports on profits. Business information share with the main organization at regular intervals. This can enable the Holding company executives to understand movements across subsidiaries. An informed manner and also take timely corrective actions.
5- Ensuring Anonymity:
Anonymity is a privilege in today’s age and time and not everyone can afford it. High net worth individuals, for instance, are especially prone to a wide range of publicity wherein information regarding their investments can spread like wildfire. Also, situations might not always turn in favor and there can be significant losses too, but why should the blame be directed at a single soul? Holding companies are the panacea for such situations by keeping the information of shareholders private. The information doesn’t get out of the holding and their worth and net assets can save from the ravages of rumors and publicity.
6- Cost-Effective Management System:
Asset management can become less risky as the Holding company can control subsidiaries without owning a hundred percent of shares or membership interest. This renders the cost of ownership of a subsidiary to be lower for the holding company than acquiring the complete ownership interest of the subsidiary. Getting controlling interest without having to invest much is one of the winning aspects for an investor in a Holding company. Thus, investors have significant rights to influence and control business decisions without exposing assets to many risks.
7- Foster Innovation
The vital element, in today’s dynamic and uncertain environment, for companies is to achieve a competitive advantage. Innovation and creativity are the practices that render this cutting edge. For a Holding company, it can be a striking element contributing to their growth. The restructuring into subsidiaries enables investors or entrepreneurs to re-route the funds and channelize the business growth effectively. This enables the Holding company to keep striving ahead even if anyone venture fails.
Holding companies have the advantage of innovation flowing in through subsidiary organizations. Through their breakthrough researches, and can significantly leverage by aligning them with the firms’ goals. One simple way of doing it is to pick the most innovative firm and apply the strategies, researches, and techniques across the entire Holding to push for a greater growth curve. Thus, ensuring growth and generating business revenue can both easily achieve simultaneously if the Holding firm can develop creativity via the subordinate firms.
How Business Link can assist you in Setting up a Company in Dubai?
UAE is a land of vast opportunities and is fast carving a niche for itself in business setup in Dubai, UAE. A Holding company can bring in huge fortune for the investors. This setup process can be simplified to a great extent with expert advice and guidance. Business Link is renown across the UAE for helping people navigate through the entire rigmarole of setting up a company in Dubai. It can significantly tone down the hassle for newcomer investors and entrepreneurs. A team of expert professionals can guide you in keeping your documents in sync. With adequate knowledge, a productive strategy can formulate. Which can empower you with all pros and cons before entering the business and Business Link is there to assist you.
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