Dubai, a bustling global economic center, has transformed into the vibrant and diverse capital of the United Arab Emirates (UAE), drawing business people and investors globally. Its strategic location, top-notch infrastructure, business-friendly policies, and tax benefits make Dubai a sought-after destination for companies looking to expand their footprint in the Middle East.
In this article, we'll walk through the process of setting up an Indian company in Dubai, offering practical insights into establishing an Indian presence in this dynamic city.
Why choose Dubai for an Indian Company?
Dubai is a great choice for an Indian company for several reasons. First off, Dubai has been growing rapidly, and its leaders have big plans for the future. The city's location is ideal, acting as a bridge between the East and the West, which makes it a smart spot for business.
One major perk is the excellent infrastructure in Dubai. They've got top-notch facilities, modern transportation systems, fantastic airports, and advanced communication networks. All of this makes it super easy to run a business smoothly.
Dubai is also known for its open and welcoming approach to businesses. The government has set up free zones like the Dubai International Financial Centre (DIFC) and the Dubai Multi Commodities Centre (DMCC). These places offer great benefits, like 100% foreign ownership, no corporate or personal income taxes, and a straightforward process for setting up a company. It's basically a business-friendly haven.
Setting up a subsidiary company in Dubai comes with several advantages for many Indian businesses:
- Lower Corporate Tax: In Dubai, the corporate tax is just 5%, a significant drop from the 25% Corporate Income tax in India. This means more savings for the business.
- Freedom with Foreign Currency: Businesses can keep foreign currency accounts in Dubai, giving them flexibility and control over their finances.
- Cost Savings on Currency Conversions: Dubai offers competitive rates and significant savings on foreign currency conversions, helping businesses manage their finances more efficiently.
- Smooth Import/Export Operations: Dubai's strategic location makes it easy for businesses to engage in import/export activities, particularly with African and European countries.
- Strong India Connection: Dubai maintains strong ties with India, making it convenient for Indian businesses. This connection facilitates the deployment of employees on both short and long-term assignments.
Setting up your Indian subsidiary company in Dubai involves a series of steps that can be broken down into a more straightforward process:
- Define Your Business Activity: First things first, figure out what your Indian subsidiary company will be doing in Dubai. It's crucial to understand the rules and limitations related to your chosen business activity.
- Pick a Company Structure: Choose the right legal structure for your subsidiary. You can either go for a free zone entity, a mainland company or set up a branch of your existing Indian company.
- Explore Dubai's Free Zones: If you decide on a free zone entity, look into the different free zones available in Dubai. Each has its own set of rules, benefits, and restrictions. Pay attention to the number and types of visas offered by each free zone and find one that fits your business needs.
- Reserve Your Company Name: Come up with a unique name for your Indian subsidiary company and get it reserved. Make sure it follows Dubai's naming guidelines and doesn't step on any existing trademarks.
- Get Initial Approvals: Seek initial approvals from the relevant authorities in Dubai. This might mean submitting documents like a business plan, feasibility study, and a No Objection Certificate (NOC) from your Indian parent company.
- Secure Office Space: Find a physical office space for your subsidiary company. The space requirements depend on the company structure you've chosen. Free zones often provide flexible office solutions.
- Prepare Legal Documents: Draft essential legal documents like the Memorandum of Association (MOA) and Articles of Association (AOA). These documents outline your company's activities, shareholders, and corporate governance structure.
- Apply for a Trade License: Put in an application for a trade license from the relevant authorities in Dubai. This license allows your subsidiary to carry out business activities legally in Dubai.
- Meet Visa and Labour Requirements: Take care of the visa and labor needs of your employees. This involves getting residency visas, work permits, and Emirates ID cards. There might be medical examinations and document submissions as part of this process.
- Register with Authorities: Register your Indian subsidiary company with the Dubai Department of Economic Development (DED) or the appropriate free zone authority. This step involves submitting necessary documents, paying fees, and obtaining commercial registration.
- Open a Bank Account: Set up a corporate bank account for your subsidiary in Dubai. Choose a reputable bank that aligns with your business requirements and meets the necessary documentation.
- Ensure Compliance and Tax Registration: Make sure you're following all local regulations and meeting tax obligations. If your company is eligible, and the conditions are met, register for Value Added Tax (VAT).
To set up your Indian Company Subsidiary in Dubai, you'll need a few important documents. Here's a more straightforward breakdown:
- Declaration from Directors and Shareholders
- Identification Documents
- Proof of Current Address
- Permanent Account Number (PAN) Card
- Undertaking and Declaration from Directors
- Certificate of Incorporation from a Foreign Company
- Address Validation for Foreign Companies
- Verification of Registered Office Address for Indian Company:
- Lease agreement, property ownership deed, or sales agreement.
- Recent electricity bill or receipt for society maintenance charges.
- No objection certificate (NOC) from the property owner (lessor).
- Board resolution (if the premises are owned by a legal entity).
These documents ensure that everything is in order and complies with the necessary regulations for setting up your Indian Company Subsidiary in Dubai.
In conclusion, choosing Dubai for establishing an Indian subsidiary company comes with numerous advantages. The vibrant business community, strategic location, and investor-friendly regulations make it an appealing destination. For companies aiming to expand into the Middle Eastern market, Dubai stands out due to its well-established infrastructure, enticing incentives in free zones, and efficient company formation processes.
Getting advice from KDP Accountants, who specialize in setting up Indian company subsidiaries in Dubai, can streamline the process and ensure compliance with all regulations. With their expertise, entrepreneurs can confidently navigate the intricacies and make the most of the opportunities offered by Dubai's thriving business environment.
The above note is subject to further study and clarifications. This note does not form an opinion from our end and before taking any decision based on above, it is recommended to consult our experts on the subject.Kamdar, Desai & Patel will not be liable for any damages (including, without limitation, damages for loss of business projects, or loss of profits) arising in contract, tort or otherwise from the use of or inability to use this article, or any of its contents, or from any action taken (or refrained from being taken) as a result of using this article or any such contents.