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How to Start a Holding Company in Dubai (Freezone vs Mainland)
A holding company in Dubai lets you own operating companies, real estate, or intellectual property under one parent, manage risk and governance in one place, and prepare for investment or exit. In this guide, we’ll compare Freezone vs mainland holding company Dubai, outline the steps for Dubai holding company setup, and show how Leela International can steer you end-to-end.
What a holding company actually does
At its simplest, a holding company in Dubai does not trade on its own; it holds shares or assets and oversees strategy, funding, and IP. Typical Holding company structure Dubai models include a parent that owns multiple LLC subsidiaries for operations, plus an SPV for assets. This separation helps restrict liabilities and simplifies investor due diligence.
Mainland Vs Free Zone?
The Freezone vs mainland holding company Dubai decision turns on market access and compliance. While Mainland offers trading across the UAE without any subject of local restrictions and with 100% foreign ownership, Free zones offer fast onboarding, sector-specific ecosystems, and possible corporate tax benefits. Both routes support efficient Dubai holding company setup.
Regulatory snapshot (2025)
Ownership: Most mainland activities allow 100% foreign ownership; only a narrow list remains restricted. Check Dubai’s official “foreign ownership restrictions” list before you file.
Corporate tax: Standard federal corporate tax is 9% above AED 375,000 of taxable profits (0% up to AED 375,000). Free zone persons may achieve 0% on qualifying income if they meet substance/activity tests; non-qualifying income is taxed at 9%.
Economic Substance Regulations (ESR): The ESR requires companies on the free zones and mainland to carry out any of the relevant activities.
How to start a holding company in Dubai (Mainland)
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Define scope and Holding company structure Dubai
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Choose legal form (LLC is common) and activities with Dubai’s Department of Economy & Tourism.
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Reserve the name, obtain initial approval, and draft MOA
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Lease approved premises (physical or flexi-desk; depends on scale) and apply for establishment card.
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Open bank account, register UBO, and enrol for taxes where required
These steps are part of wider Dubai company formation compliance.
How to start a holding company in Dubai (Free zone)
- Pick a zone aligned to your assets or industry.
- Select licence type (Holding/SPV) and shareholders.
- Submit KYC, business plan, and board resolutions online; receive initial approval quickly
- Setup your office (often flexi-desk permitted), issue share capital if required, and collect incorporation docs.
- Complete bank onboarding, UBO, and ESR filings
Some DMCC/SPV paths are known for rapid turnarounds once documents are complete. These activities conclude in streamlined Dubai holding company setup.
Costs, Timing, and feasibilities (Freezone vs Mainland)
- Offices & visas: Mainland generally scales visas with office size whereas Free zones may cap visas per licence
- Banking: Banks favour clear source-of-funds, group charts, and board resolutions authorising the parent to own UAE subsidiaries.
- Timeline: Mainland timelines vary with approvals but many free zones complete incorporations within days once documents are in order.
- Substance: To keep incentives, ensure director oversight and adequate presence where required (especially for qualifying free zone status and ESR).
Freezone vs Mainland holding company Dubai:
- Market access: Mainland can contract across the UAE; many free zone entities are limited to their zone and overseas unless they appoint a mainland distributor.
- Data & privacy: Free zones often keep shareholder registers non-public. Mainland may provide data to health sectors.
- Recruitment & control: Free zones offer concierge services but may have licence-based visa caps. Mainland provides broader hiring flexibility.
- Tax & incentives: Free zones can deliver 0% on qualifying income if criteria are sustained; mainland follows the standard corporate tax regime
How to choose?
- Choose the mainland if you plan local acquisitions, need unlimited visas, or want to bid on onshore contracts.
- Choose a free zone if you prioritise speed, sector clusters, and potential 0% qualifying income, and your trading is overseas or via subsidiaries/distributors.
Either pathway supports a compliant Holding company in Dubai with a scalable Holding company structure Dubai.
Frequently Asked Questions
The best way to start a holding company in Dubai is choosing the mainland or a free zone based on market access
Corporate tax is 0% up to AED 375,000 and 9% above; some free zone entities may keep 0% on qualifying income if they maintain substance and limit excluded activities.
Yes. Many free zones operate visa quotas per licence, while mainland companies scale visas with office size and activity scope.
Yes, for most activities subject to a narrow restricted list published by the authorities?
CONCLUSION
Choosing between Dubai Mainland and Free Zone for your business rely on your specific goals and needs. Both jurisdictions have their own pros and cons, so it’s important to sensibly consider your priorities before making a decision.
Connect with Leela international for the tailored legal services for Dubai holding company setup. We are specialised in providing comprehensive services, from company registration and licensing to PRO services and visa assistance, we’ll support you at every step in Dubai company formation. Post-launch, we maintain registers, yearly ESR filings, and renewals as part of ongoing Dubai company formation support.
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