Navigating the Legal and Regulatory Landscape of Owning Multiple Businesses in Dubai

business setup in Dubai

Often, there comes a stage when a business fulfills its objectives and wants to diversify its revenue streams by pursuing new prospects.  This is where the UAE’s advantageous business regulations come in. The business climate in Dubai permits investors to have multiple new business setup in Dubai.

Dubai is a business-friendly country that encourages entrepreneurship and foreign investment. There are a variety of business structures available, including sole proprietorship, limited liability company (LLC), and a branch office. All of these allow multiple businesses to be established and operated within Dubai.

At this point, the investor must adopt a strong plan to explore new opportunities and implement the best legal strategy to build a solid corporate foundation for the upcoming project.

There are primarily two ways to have an expanded business setup in Dubai. And open several company companies with advantages and drawbacks:

1. Register each business separately as a new legal entity with the Dubai Department of Economic Development (DED).

There are no restrictions on the number of LLCs an investor can establish in Dubai. Because this is frequently the initial step in adding additional firms to their name. A license to create a restaurant business in Dubai is simple to obtain for an investor who already operates a salon and spa business setup in Dubai.

The fundamental benefit of this method is that it divides the risk of each business into its particular body. Even though the investor must provide additional resources. The other business is untouched by the obligations of the other business if one of the businesses’ sales plummets or runs into legal issues.

2. Set up a holding company that owns multiple subsidiary companies, each operating as a separate legal entity. This can provide various benefits, such as centralized management and shared resources.

A legally preferred method is to establish or purchase individual corporations and bring them under the control of a holding company. The investor can legally oversee and control the operations of new businesses under its umbrella and more efficiently allocate financial resources through a holding company in Dubai.

A holding company offers tax efficiency, asset security from potential intruders, owner anonymity, and currency restrictions. It also helps lower shareholder risk and protects from economic instability, facilitating the management of businesses.

The Process

The process of having multiple businesses in Dubai can vary depending on the specific situation and the type of businesses involved. However, the following are general steps to consider for a company formation in Dubai:

  • Determine the legal structure of each business: Decide whether to set up each business as a sole proprietorship, partnership, or company. The legal structure will affect the registration process, the liability of the owners, and other factors.
  • Choose a trading name for each business: The business name must be unique and comply with Dubai’s naming regulations. You must give a minimum of three options to the authorities.
  • Submit the required documents to the Dubai Department of Economic Development (DED): The required documents may include a trade license application, a Memorandum of Association, and other relevant documents.
  • Obtain necessary approvals: Depending on the nature of the business, approvals may be required from other government entities, such as the Dubai Municipality or Dubai Civil Defense.
  • Obtain the trade license: Once the approvals are obtained, the DED will issue the trade license.

Additional steps will be involved if you set up a holding company. Such as setting up each subsidiary company and transferring ownership and management to the holding company.

It’s important to note that the process can be complex, and it is recommended to seek professional advice from reputable business consultants in Dubai. To ensure proper legal and regulatory compliance.

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