Before operating in the United Arab Emirates, you must set up a subsidiary or partner with a subsidiary alternative. You’ll need to incorporate in the country before you can hire employees, run payroll, and work on a compensation and benefits plan.
Fully incorporating on your own can take anywhere from weeks to months, which means you may lose time to hire employees and start your business. Instead, Globalization Partners can reduce that process from a few months to a few days.
How to Set up a United Arab Emirates Subsidiary
Setting up a United Arab Emirates subsidiary is not a decision for your company to take lightly. You should consider various factors as you decide what you will need for your incorporation and where you should base your headquarters. Business factors such as your particular industry, the nationality of the individuals you hire, and any trade agreements can make a notable difference in your United Arab Emirates (UAE) subsidiary setup process.
Since the UAE has several different regions, the requirements for a subsidiary can vary based on your location. If you incorporate on the mainland, you will need to find a local sponsor who owns 51% of your company on paper. This sponsor can be an agent or a local sponsor service and will cost approximately 50,000 AED. You will experience fewer limitations and requirements in the country’s free zones, but you’ll need a certain level of minimum capital and will only be able to perform the activities you list on your trade license.
While Arabic is the UAE’s national language, different people groups speak other dialects. For example, the Emirati people speak the Gulf dialect of Arabic. Other popular languages include Persian, Nepali, Bengali, Pashto, and others. Since UAE was a British colony until 1971, most of the population continues to speak English, which can be helpful for business.
Most companies incorporate as a limited liability company. The steps to set up a United Arab Emirates limited liability subsidiary include:
- Reserving a company name
- Applying for registration at the Department of Economic Development (DED)
- Notarizing your company’s Memorandum of Association at the DED
- Filing company documents with the DED
- Obtaining a trade license
- Registering for membership at the Dubai Chamber of Commerce and Industry
- Opening in-country bank accounts
- Applying for an establishment card at the Ministry of Labor
- Registering native workers with the Ministry of Labor and the General Authority for Pension and Social Security
United Arab Emirates Subsidiary Laws
United Arab Emirates subsidiary laws vary based on the type of entity you decide to incorporate as. A limited liability company (LLC) requires at least two partners but no more than 50. Each partner’s liability is limited to the amount of capital they contribute as their share participation.
In the past, LLCs had to meet a minimum capital requirement of 300,000 AED in Dubai and 150,000 AED in Abu Dhabi and the other Emirates. Now, the country requires “sufficient capital,” which is judged by the DED of the Emirate in which you are incorporating. Foreign companies are encouraged to work with an advisor or another company knowledgable in United Arab Emirates subsidiary laws to determine the right minimum share capital.
What Do You Need?
If you set up your United Arab Emirates subsidiary alone, your company should prepare to spend both time and money. Each step of the process takes a significant amount of time and expenses that you will need to budget for, including travel back and forth to the UAE. If you do not have time to learn all of the United Arab Emirates’ subsidiary laws, you should either hire someone who knows these laws already or take the time to train one of your existing employees.
Benefits of a Subsidiary
By setting up your United Arab Emirates subsidiary, you can legally start working in the country. A limited liability company also keeps the parent company and subsidiary relatively separate. With a limited liability structure, the parent company remains protected from any of the subsidiary’s losses, and the subsidiary can create a company culture different from the parent company’s.
Your business will see more benefits by working with Globalization Partners. As an alternative to establishing a United Arab Emirates subsidiary, we offer you all the benefits and independence of a subsidiary without the time and cost needed to set one up on your own. We can hire employees to work for you in a matter of days, and we will make sure you stay compliant in every area from payroll to compensation and benefits. We’ll take on all risk as the Employer of Record, so you can focus on growing your business.
Contact Globalization Partners
When you’re searching for an effective alternative to establishing a United Arab Emirates subsidiary, contact Globalization Partners.