So, you're thinking about growing your business beyond India's borders? Dubai is quickly becoming the top spot for Indian companies looking to expand, and for good reasons. But what exactly does it mean to set up an Indian subsidiary company in Dubai, and why is this city such a magnet for Indian business owners?
A subsidiary is a separate business entity that is owned or controlled by a parent company (in this case, your company in India). It operates under UAE laws but still stays connected to the Indian headquarters. This setup is super useful because it lets businesses jump into new markets, try out different things, and even protect their main company from certain risks.
Dubai's appeal to Indian businesses is huge. It's not just close by and has strong historical ties; it also offers an incredibly welcoming environment for business. We're talking about easy setup processes, a reputation for being simple to do business in, and fantastic tax benefits. Dubai has worked hard to create a perfect place for global success. Indian companies are realizing that Dubai isn't just a way into the Middle East and Africa; it's a smart move for international trade and innovation.
Why Dubai is a Smart Choice for Indian Companies?
For Indian companies looking to scale internationally, Dubai is a practical, strategic, and future-ready destination. Here’s why:1. Strong India-UAE Bilateral Relations
The political and economic ties between India and the UAE are stronger than ever, especially after the India-UAE CEPA agreement. This trade pact has reduced tariffs, eased customs procedures, and opened up easier access for Indian companies in the UAE market, giving Indian businesses a smoother landing.2. Tax Benefits
One of the biggest reasons Indian companies prefer Dubai is the tax advantage. There’s no personal income tax, no capital gains tax, and a 0% corporate tax for qualifying businesses (under certain thresholds or in Free Zones). This means higher profits and lower operating costs.3. A Soft Landing for Indian Startups and SMEs
Dubai has startup-friendly hubs like the International Free Zone Authority (IFZA), Ajman Free Zone, Dubai Silicon Oasis (DSO) and Dubai Internet City, which offer accelerator programs, innovation funding, and tech-friendly infrastructure.4. Quick and Simple Banking Access for Indian Companies
While banking is strict in most countries, Dubai offers dedicated business banking support for Indian companies, especially those backed by a credible business consultant like Shuraa India. Many Free Zones now work closely with banks to simplify account openings for Indian firms.5. Low Import Duties & Seamless Re-export Opportunities
Dubai is built for trading. It offers low customs duties and world-class logistics, making it easier for Indian companies in manufacturing, foodstuff, or trading to import goods from India, store them in Dubai, and re-export them worldwide without a heavy tax burden.6. Reputation & Trust in Global Business
Having a presence in Dubai adds to your global brand reputation. Clients and investors often see Dubai-based companies as internationally credible, financially stable, and strategically positioned.Understanding Subsidiary Company Structure in Dubai
A subsidiary is a separate legal entity established in Dubai and owned or controlled by a parent company, such as your Indian headquarters. It operates independently in terms of assets, liabilities, profits, and losses. This legal separation offers robust liability protection, limiting risk to the subsidiary’s assets alone.100% Ownership Allowed:
As per the recent UAE corporate law reforms, 100% foreign ownership is now permitted for most business activities on the mainland. Furthermore, all Free Zone subsidiaries allow full foreign ownership, with no UAE national shareholder required.Mainland Subsidiary Rules:
Setting up a mainland subsidiary in Dubai involves specific rules and processes governed by the Department of Economic Development (DED). Here's what you need to know:- Legal Structure: The most common legal structure for a mainland subsidiary is a Limited Liability Company (LLC). This structure offers liability protection to the shareholders, meaning their personal assets are protected from the company's debts.
- Business Activity Approval: You must clearly define your business activities and get them approved by the DED. Some activities may require additional approvals from other government bodies.
- Office Space: A physical office space is typically required for a mainland company. You'll need to provide a lease agreement (Ejari) for your chosen premises.
- Licensing and Registration: The process involves obtaining initial approval, reserving a trade name, drafting and notarising the Memorandum of Association (MOA) and Articles of Association (AOA), submitting shareholder information, and finally obtaining the trade license from the DED. Registration with the Chamber of Commerce is also mandatory.
- Corporate Tax: Mainland subsidiaries are subject to UAE corporate tax at a standard rate of 9% on taxable income exceeding AED 375,000. However, businesses in free zones can often benefit from significant tax exemptions.
Legal Status & Autonomy of the Subsidiary:
- A subsidiary is a fully independent legal entity, separate from its parent company; decisions, liabilities, and financial activities are contained within that subsidiary unless otherwise agreed.
- The subsidiary can enter into contracts directly in its own name, giving it more credibility and ease of doing business in the local market.
- Unlike a branch, which simply replicates the parent’s operations, a subsidiary can pursue different activities suited to the market or strategic goals of the parent company
- For tax consolidation, the parent must hold at least 95% ownership and control of the subsidiary to qualify as a consolidated group under UAE corporate tax rules (effective June 1, 2023).
What are the Documents Required from the Indian Parent Company?
To register a subsidiary company in Dubai, the Indian parent company needs to provide several official documents.- Certificate of Incorporation
- Memorandum & Articles of Association (MoA & AoA)
- Board Resolution approving the Dubai subsidiary
- Passport copies of shareholders and directors
- Certificate of Good Standing (if required)
- Audited Financial Statements (if applicable)
- Notarization and Attestation of all documents by an Indian Notary, the Ministry of External Affairs (India), the UAE Embassy in India, and the UAE Ministry of Foreign Affairs (MoFA)
How to Set Up an Indian Subsidiary Company in Dubai?
Subsidiary company registration in Dubai involves a few key steps, from choosing the right jurisdiction to getting licensed and operational.1. Define Your Business Activity
Clearly identify the exact nature of your business operations in Dubai. This is crucial as it dictates your license type, the required approvals, and even the best jurisdiction. Dubai's Department of Economic Development (DED) for the mainland, and each Free Zone Authority have specific lists of permitted activities.2. Choose Your Jurisdiction
Decide whether to establish your subsidiary in:- Mainland, which offers full access to the UAE’s local market.
- Free Zone, which allows streamlined setup, 100 % ownership, and tax benefits.
3. Select a Legal Structure
For an Indian subsidiary, the most common legal structure is a Limited Liability Company (LLC), whether on the mainland or in a Free Zone (often called a Free Zone LLC or FZ-LLC). This protects the parent company's liability.4. Reserve and Register Trade Name
Pick a compliant and unique business name and register it with the DED if mainland, or the relevant Free Zone Authority.5. Prepare Required Documents
Collect and legalise all documents from the Indian parent company, including MoA, Board Resolution, PoA, etc.6. Notarise all Documents
Ensure all Indian documents are:- Notarised in India
- Attested by MEA (India)
- Legalised by the UAE Embassy in India
- Attested by MoFA in the UAE
