Often there comes a stage when a company successfully achieves its business goals and plans on diversifying its income sources by venturing into new opportunities. The UAE’s lucrative business laws allow investors to incorporate more than one businesses to their name.
This is where the investor must take up a sound strategy to expand on new prospects, and implement the best legal approach to erect a reliable corporate structure for the next venture. Should it be separate corporations/LLCs, or one big shareholding company to administer all of them, here is how to do it.
Generally, there are two main methods to incorporate multiple business entities in the UAE, each with their own advantages and disadvantages.
Creating New Limited Liability Companies
In UAE there is no limit to how many LLCs the investor can open as it usually is the first approach for adding new companies to their name. An investor already running a Salon & Spa setup can easily obtain a license to open a Restaurant Business in Dubai.
While the investor has to allocate additional resources, the main advantage of this strategy is it separates the risk of each business to its individual body. If one of the business’s sales takes a nose dive or faces legal complications, the other business remains unaffected from its liabilities.
Its disadvantage depends on how far the investor is accomplished and what kind of business activity he/she is pursuing. Since the operations are not centralized and not necessarily based on a definitive model, the investor will have to bear the burden of overhead costs for maintenance and additional licensing and paperwork fees. While these costs can be a major hurdle for budget constrained entrepreneurs, well-established investors usually go lengths to protect their incorporations which makes these expenses well worth.
Incorporating a Holding Company
One of the most preferable and legally secure approaches is to create or acquire individual corporations and bring them under the umbrella of a holding company. Through a holding company in Dubai, the investor can lawfully manage and control operations of new ventures in its fold and distribute monetary resources more effectively.
Aside from streamlining management of related companies, a holding company in Dubai also gives optimization of taxes, assets protection from any possible encroaches, owner anonymity, overcoming antimonopoly and currency restrictions, minimizing shareholder risk and shielding from economic volatility.
This often requires the expertise of a professional business setup agency in Dubai to help the business get through the various legal implications that involve in its incorporation.
How IBG Can Help?
IBG Consulting specializes in providing business diversification and management solutions for all kinds of activities in the UAE. As an experienced agency, we understand what investors expect from us, and provide the most competitive packages for Free zone company formation, mainland limited liability company or holding company in Dubai. To learn more about our services, contact our consultants now or visit our website ibgme.ae.