Expand Your Indian Business | Subsidiary Company Formation in Dubai

Introduction

A subsidiary company in Dubai is an entity legally registered in the UAE but owned or controlled by over 51% by an Indian parent company. This structure provides Indian businesses with an exceptional and independent presence in one of the most dynamic economic hubs in the world. Over the years, Dubai has gradually become a strategic avenue for Indian businesses and proudly presents benefits, including the best possible tax regime, connectivity to global markets, and pro-investor policies. Establishing a subsidiary of an Indian company in Dubai will guarantee solid grounds for international expansion. Arnifi provides end-to-end solutions to ensure a hassle-free and compliant expansion for Indian companies in the UAE market.

Why Indian Companies Choose Dubai for Subsidiary Setup

Dubai’s attractiveness to Indian businesses stems from numerous factors. Its strategic geographic position acts like a gateway, connecting India to emerging markets in the Middle East, Africa, and Europe. The emirate is favorably structured taxes-wise; no personal taxes and a very low corporate tax make the emirate profitable to companies. Indian companies can enjoy full foreign ownership in Dubai’s numerous free zones and, increasingly, up to 100% ownership in the mainland for a wide array of business activities. This rich ecosystem gives access to global investors, banking services that are second to none, world-class logistics infrastructure, and a multicultural and diverse workforce. Further, the synergies for trading and business growth are deeply rooted due to the historical ties that the UAE has with India.

Business Structures Available for Subsidiaries in Dubai

The principal structures that Indian firms can choose for a Dubai subsidiary are two-fold:

• Free Zone Subsidiary: It allows 100% foreign ownership, full repatriation of capital as well as profits, and exemptions from customs duties. Thus, free zones can be operated very easily and are perhaps best for export-oriented businesses, e-commerce activities where sellers do not wish to serve customers in the wider UAE market directly, and technology companies that want a more international clientele.
• Mainland Subsidiary: Setting up a mainland subsidiary allows companies access to the trading business both in Dubai and across the rest of the UAE with no limitations. For many years, this setup included the requirement of having a local sponsor who held 51% of the shares, but with the recent changes, many business activities now allow up to 100% foreign ownership.

The branch office and a subsidiary will have contrasting setups, and it will also help to note the distinction. A branch office is simply another extension of the Indian parent making similar transactions, whereas the subsidiary is a separate legal entity with its own distinct identity bearing liabilities, offering it greater operational flexibility and autonomy.

Step-by-Step Process to Start an Indian Subsidiary in Dubai

Setting up an Indian subsidiary in Dubai requires the following key steps:

Step 1: Choose Business Activity & Jurisdiction. Primary business activities must be decided, and the most appropriate jurisdiction must be chosen-mainland if broader market access is required, or free zone if certain benefits are desired.

Step 2: Reserve Trade Name. Choose a unique trade name for your sister company, complying with UAE naming conventions, which has been reserved.

Step 3: Prepare MOA/AOA. Prepare MOA and AOA, clearly stating the shareholding structure and the role of the Indian parent company.

Step 4: Submit Application & Documents. Gather and submit all the application requirements, such as the parent company’s registration certificate, IDs of all shareholders involved, and a board resolution authorizing the setting up of the new subsidiary.

Step 5: Obtain Initial Approval.  Get your initial approval from the related licensing authority (i.e., DED for Mainland or Free Zone Authority).

Step 6: Lease Office Space. Based on the appropriate jurisdiction, lease office space or make use of a flexi-desk option.

Step 7: Get a Trade License Issued.  Once all requirements are fulfilled, the issuance of the trade license will follow, followed by the Chamber of Commerce registration if operating on the Mainland.

Step 8: Open Corporate Bank Account & Apply for Visas. Complete the finalization process by opening a corporate bank account and applying for visas for employees.

This whole process turns out to be quite an arduous procedure, and Arnifi takes care of this for the Indian company by providing expert and proper guidance with respect to compliance, documentation, and liaison with the authorities.

Documents Required to Register an Indian Subsidiary in Dubai

The documents needed for registering a subsidiary in Dubai generally include:

• The incorporation certificate of the parent company.
• A board resolution from the Indian parent company approving the subsidiary setup.
• Memorandum and Articles of Association of the parent company.
• Passport copies of all directors and shareholders.
• Provide proof of the registered office in Dubai.
• Audited financial statements of the parent company may be required in some cases and for certain activities.

Cost of Setting Up an Indian Subsidiary in Dubai

The costs of setting up an Indian subsidiary in Dubai depend on a large set of variables:

• Mainland vs. Free Zone: Usually, Free Zones may turn out to be slightly economical in initial setup costs, while the Mainland has wider market entry.
• Number of visas: Each visa, of course, attracts an additional government fee and processing charge.
• Office space requirements: Costs for virtual offices or flexi-desks are lower than those for a physical office.
• Nature of business activity: For higher licensing fees being imposed upon regulated activities.

The cost can widely vary; however, Arnifi will offer packages with varying options and clear pricing so that Indian companies are forewarned of the expenses involved.

Benefits of Partnering with Arnifi for Subsidiary Setup

Partnering with Arnifi gives Indian businesses an advantage in their Dubai expansion. Our in-depth knowledge of Indian corporate regulations and the UAE business laws allows us to ensure compliance on both fronts. We also provide support in cross-border documentation, including the drafting of board resolutions, attestations, and, most importantly, the MOA/AOA. We provide turnkey solutions from license acquisition through visa processing forward to accounting, HR support, and, finally, tax and compliance services. Arnifi can also provide you with strategic advisory assistance regarding your choice of an appropriate jurisdiction (Free Zone or Mainland), considering your actual business goals.

FAQs on Indian Subsidiary Company in Dubai

Q1. Can an Indian company fully own a subsidiary in Dubai?

Yes, Indian companies can fully own subsidiaries, especially in the Free Zone and increasingly for many activities in Mainland Dubai.

Q2. How long does it take to register a subsidiary?

Registration typically takes two to four weeks, depending on the jurisdiction chosen, the activity of the business, and the timely submission of documents.

Q3. What’s the difference between a branch and a subsidiary?

A branch is an extension of the parent company; a subsidiary is a separate legal entity with independent operations and liabilities.

Q4. Do Indian subsidiaries need a local sponsor in Dubai?

Many activities on the Mainland no longer require a local sponsor, while Free Zone subsidiaries never did.

Q5. What are the tax implications for Indian subsidiaries in Dubai?

Subsidiaries in Dubai enjoy benefits such as no personal income tax and a fairly competitive corporate tax.

Conclusion

Dubai truly offers Indian companies ineradicable opportunities in their expansion across the globe through subsidiary company formation. This course helps a company to find prospects in new markets, within a business-friendly environment, and with certain considerable tax benefits. The robust infrastructure and impeccable international connectivity make Dubai a perfect springboard for Indian enterprises targeting international growth.

Arnifi serves as your trusted partner, providing all-around and expert support in a way that is smooth and fully compliant with all requirements. Our knowledge of the laws in India and the UAE, along with regulations, helps in streamlining the whole process from setting up to compliance.

Contact Arnifi today to establish your Indian subsidiary in Dubai and easily unlock new markets.