Key Highlights:

• The India-UAE CEPA nearly doubled bilateral trade to USD 83.7 billion in 2023-24, opening new opportunities for Indian businesses in Dubai.
• Indian companies can now own 100% of subsidiaries in both Dubai’s mainland and free zones, with robust liability protection and market access.
• Recent reforms let free zone subsidiaries expand into mainland Dubai by obtaining additional licenses, removing traditional trading barriers.
• Mainland and free zone setups each offer unique tax benefits, streamlined processes, and flexible capital requirements tailored to business needs.

The relationship between India and the UAE has reached unprecedented heights with the India-UAE Comprehensive Economic Partnership Agreement (CEPA) implementation. 

Since the agreement came into force in May 2022, bilateral merchandise trade has nearly doubled from USD 43.3 billion in FY 2020-21 to USD 83.7 billion in 2023-24, sources confirmed. This trade pact has created numerous opportunities for Indian businesses, with non-oil trade accounting for more than half of the total trade.

Additionally, the numbers speak volumes about Dubai’s appeal to Indian entrepreneurs. In 2023 alone, 15,481 Indian enterprises joined the Dubai Chamber of Commerce, representing a 38% increase from the previous year. 

In the first half of 2024, 7,860 Indian companies registered with the Dubai Chamber, making Indian businesses the leading group among new non-Emirati companies. Currently, over 90,000 Indian member companies are registered with the Dubai Chamber of Commerce.

Moreover, if you want to set up a subsidiary company in Dubai from India, this will be a helpful guide for you. 

Understanding Subsidiary vs Other Business Structures

1. What is a subsidiary company?

A subsidiary company is a separate legal entity established in Dubai that is owned or controlled by a parent company in India. Unlike other business structures, a subsidiary operates independently with its own assets, liabilities, profits, and losses while remaining connected to the Indian headquarters.

The key characteristic of a subsidiary is its legal independence from the parent company. This separation provides robust liability protection, limiting risk to the subsidiary’s assets alone and protecting the parent company’s assets in India. The subsidiary can enter into contracts directly in its own name, giving it more credibility and ease of doing business in the local market.

2. Subsidiary vs Branch Office

The differences between a subsidiary and a branch office are fundamental to your business structure decision:

Legal Independence: A subsidiary is a fully independent legal entity, while a branch office is simply an extension of the parent company without separate legal status. This means the parent company remains directly liable for all branch operations and debts.

Liability Protection: Subsidiaries offer complete liability protection to the parent company, whereas branch offices expose the parent company to unlimited liability for branch operations.

Operational Flexibility: Subsidiaries can pursue different business activities suited to the local market or strategic goals, while branches typically replicate the parent company’s existing operations.

Tax Treatment: Subsidiaries are treated as separate taxable entities under UAE corporate tax law, while branch offices are considered part of the parent company for tax purposes.

3. Subsidiary vs Representative Office

Representative offices serve a different purpose compared to subsidiaries:

Operational Scope: Representative offices can only conduct promotional and liaison activities without engaging in commercial transactions. Subsidiaries have full operational capabilities to conduct business, enter contracts, and generate revenue.

Revenue Generation: Subsidiaries can actively trade and generate profits, while representative offices cannot engage in profit-making activities.

Market Access: Subsidiaries provide complete access to UAE markets and can serve customers directly, whereas representative offices are limited to market research and relationship building.

Types of Subsidiary Setup Options in Dubai

1. Mainland Subsidiary

Mainland subsidiaries offer the most comprehensive market access in the UAE. When you establish a mainland subsidiary, you gain full trading rights throughout the UAE without restrictions.

Market Access: Trade directly with the local UAE market and serve customers across all seven emirates without limitations. You can also bid for government contracts, which often require a mainland presence.

Business Activities: Choose from over 2,000 approved business activities available in the UAE. Your subsidiary can engage in multiple activities under a single license, providing operational flexibility.

Ownership Rights: Indian companies can now own 100% of mainland subsidiaries in most business activities, thanks to recent legal reforms. This eliminates the need for local sponsors in eligible sectors.

Physical Presence: Mainland subsidiaries must maintain a physical office space registered with Ejari (UAE’s real estate registration system). This requirement builds local credibility and enables face-to-face customer interactions.

2. Free Zone Subsidiary

Free zones offer specialized benefits designed to attract international businesses:

Tax Advantages: Free zone subsidiaries can benefit from 0% corporate tax on qualifying income, provided they meet specific criteria. Non-qualifying income is taxed at 9% on amounts exceeding AED 375,000.

Full Foreign Ownership: All free zone subsidiaries allow 100% foreign ownership without requiring UAE national shareholders.

Streamlined Setup: Free zones offer simplified registration processes with dedicated one-stop-shop services. The setup timeline is typically faster compared to mainland options.

Industry Focus: Many free zones cater to specific industries, providing specialized infrastructure and services. For example, Dubai International Financial Centre (DIFC) focuses on financial services, while Dubai Internet City targets technology companies.

Trading Flexibility: Recent reforms under Dubai’s Executive Council Resolution No. 11 of 2025 now allow free zone companies to expand into mainland Dubai by obtaining additional licenses, removing traditional trading restrictions.

Also Read: Why Russian Entrepreneurs Are Choosing Dubai for Business Relocation

Legal Requirements and UAE Government Regulations 

1. Jurisdiction Selection (Mainland vs Free Zone)

The choice between mainland and free zone setup significantly impacts your subsidiary’s operations and compliance requirements.

Mainland Considerations:

• Access to the entire UAE market without restrictions
• Higher setup and operational costs
• Subject to 9% corporate tax on taxable income exceeding AED 375,000
• Mandatory physical office space with Ejari registration
• Financial audit requirements for most companies

Free Zone Considerations:

• Potential 0% corporate tax rate on qualifying income
• Lower setup costs and flexible office options
• Industry-specific infrastructure and services
• Streamlined compliance procedures
• Mainland market access now possible through additional licensing
• Document Requirements from Indian Parent Company

Corporate Documents:

• Certificate of Incorporation from the Registrar of Companies
• Memorandum and Articles of Association (MoA & AoA)
• Board Resolution approving the Dubai subsidiary establishment
• Certificate of Good Standing (if required by authorities)
• Audited Financial Statements for the past two years

Personal Documents:

• Passport copies of all shareholders and directors
• Address proof documents (bank statements or utility bills)
• Educational certificates for key management personnel

Attestation Process:

All Indian documents must undergo a comprehensive attestation process:

1. Notarization by an Indian Notary Public
2. Attestation by the Ministry of External Affairs (MEA) in India
3. Legalization by the UAE Embassy in India
4. Final attestation by the UAE Ministry of Foreign Affairs (MoFA)

2. Board Resolution for Subsidiary Setup

Your Indian parent company must pass a board resolution authorizing the establishment of a Dubai subsidiary. This resolution should include:

Authorization Details: Clear authorization for setting up the subsidiary, including the proposed share capital and business activities.

Appointed Representatives: Names of individuals authorized to complete the setup process and sign documents on behalf of the parent company.

Financial Commitments: Approval for the required capital investment and ongoing financial commitments.

Management Structure: Initial management appointments and decision-making authority for the subsidiary.

Step-by-Step Subsidiary Setup Process

Phase 1: Initial Planning and Documentation

Step 1: Define Business Activity

Clearly identify the exact nature of your business operations in Dubai. This determines your license type, required approvals, and best jurisdiction choice.

Step 2: Choose Jurisdiction

Decide between a mainland or free zone setup based on your market access needs, tax preferences, and operational requirements.

Step 3: Select Legal Structure

Most Indian subsidiaries opt for the Limited Liability Company (LLC) structure, which provides liability protection and operational flexibility.

Step 4: Reserve Trade Name

Choose a unique and compliant business name and register it with the DED (mainland) or relevant Free Zone Authority.

Phase 2: Documentation and Approvals

Step 5: Prepare Required Documents

Collect and prepare all Indian parent company documents, ensuring proper attestation through the complete chain.

Step 6: Secure Office Space

For mainland companies, secure a physical office with Ejari registration. Free zone companies can choose from flexi-desks to dedicated offices.

Step 7: Draft Legal Documents

Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) outlining the subsidiary’s structure, activities, and management.

Phase 3: Licensing and Approval

Step 8: Submit Application

Submit your complete application to the relevant authority – Department of Economic Development (DED) for the mainland or a specific Free Zone Authority.

Step 9: Government Processing

Authorities review your application, conduct due diligence, and process approvals. This involves verification of documents and compliance checks.

Step 10: Trade License Issuance

Upon approval, receive your official trade license authorizing business operations in Dubai.

Trade License Issuance Timeline

Government processing timelines vary by jurisdiction and complexity:

• Mainland Processing: 2-4 weeks from complete document submission, depending on business activity complexity and required approvals.
• Free Zone Processing: 1-2 weeks for standard activities, with some free zones offering express processing for simple business structures.
• Additional Approvals: Specialized activities may require sector-specific approvals, extending the timeline by 1-2 weeks.

Minimum Capital Requirements

The UAE has significantly relaxed capital requirements for subsidiary companies:

Mainland Companies: No minimum capital requirement for Limited Liability Companies (LLCs), though companies must specify a capital value in their articles of incorporation.

Free Zone Companies: Capital requirements vary by free zone authority, but most have eliminated or significantly reduced minimum capital thresholds.

Joint Stock Companies: Require minimum share capital of AED 10 million for public companies.

Practical Considerations: While no legal minimum exists, ensure sufficient capital to cover initial setup costs, office rent, visa fees, and operational expenses.

Corporate Tax Structure 

The UAE’s corporate tax regime applies different rates based on your subsidiary’s structure and income sources:

Mainland Tax Rates:

• 0% on taxable income up to AED 375,000
• 9% on taxable income exceeding AED 375,000

Free Zone Tax Rates:

• 0% on qualifying income for Qualifying Free Zone Persons (QFZP)
• 9% on non-qualifying income

Qualifying Income Requirements:

To benefit from 0% tax in free zones, your subsidiary must:

•  Maintain adequate substance in the free zone
• Derive income from qualifying activities
• Ensure non-qualifying revenue doesn’t exceed 5% of total revenue or AED 5 million
• Prepare audited IFRS financial statements
• Comply with transfer pricing requirements

Corporate Bank Account Opening

Opening a corporate bank account is essential for your subsidiary’s operations:

Required Documents:

• Valid trade license and corporate formation documents
• Memorandum and Articles of Association
• Passport copies of company directors and authorized signatories
• Visa and Emirates ID copies of shareholders
• Office lease agreement (Ejari for mainland companies)
• Parent company’s audited financial statements

Key Requirements:

• Business Substance: Banks require evidence of genuine business operations and physical UAE presence
• Source of Funds: Clear documentation of legitimate business revenue and financial transactions
• Ultimate Beneficial Owner (UBO): Full disclosure of individuals ultimately controlling the company – Adhere to UBO Compliance 
• Processing Timeline: Bank account approval typically takes 2-4 weeks, with some banks offering express services for additional fees.
• Minimum Balance Requirements: Vary by bank and account type, typically ranging from AED 3,000 to AED 25,000 for business accounts.

Costs and Fee Structure

Understanding the complete cost structure helps you budget effectively for your subsidiary setup:

Mainland Company Setup Costs:

• Initial Approval: AED 120
• Name Approval: AED 620
• Trade License Fee: AED 10,000-15,000 annually (varies by activity)
• MOA Notarization: AED 900-1,500
• Office Space: Varies significantly by location and size
• Total Estimated Cost: AED 15,000-25,000 for initial setup

Free Zone Setup Costs:

• Business License and Registration: AED 10,000-25,000
• Office Space (flexi-desk): Starting from AED 6,000 annually
• Visa Processing: AED 3,000-7,000 per person
• Total Estimated Cost: AED 12,000-20,000 for basic setup

Additional Costs:

• Visa and Emirates ID: AED 3,000-5,000 per person
• Bank Account Opening: AED 1,000-3,000 in fees
• Professional Services: AED 5,000-15,000 for consultancy

Important Note: These costs are subject to change based on government regulations and should be verified with current authorities before making decisions.

Expansion Possibilities

1. Adding Business Activities

You can expand your subsidiary’s scope by adding new business activities to your trade license. This requires approval from the licensing authority and may involve additional fees.

2. Opening Branch Offices

Established subsidiaries can open branch offices in other emirates or locations within Dubai, expanding their physical presence.

3. Free Zone to Mainland Expansion

Dubai’s new regulations allow free zone companies to obtain mainland licenses while maintaining their free zone benefits, providing unprecedented operational flexibility.

4. Geographic Expansion

Your subsidiary can expand operations to other UAE emirates or internationally, leveraging Dubai’s strategic location and business environment.

Also Read: Top 10 Profitable Business Ideas to Start in Dubai in 2025

Frequently Asked Questions (FAQs)

Q1: Can Indian companies own 100% of a Dubai subsidiary?

Yes, Indian companies can own 100% of a Dubai subsidiary in both mainland and free zone areas. The UAE government amended Federal Law No. 2 of 2015 through Federal Decree-Law No. 26 of 2020, allowing foreigners to establish companies with complete ownership in most commercial and industrial activities. Only certain strategic sectors like defense and telecommunications may still require local partnership.

Q2: What is the difference between a subsidiary and a branch office in Dubai?

The key differences between subsidiaries and branch offices are significant for your business structure decision. A subsidiary is a separate legal entity, while a branch office is an extension of the parent company without independent legal status. Subsidiaries offer complete liability protection to the parent company, whereas branch offices expose the parent company to unlimited liability. 

From a tax perspective, subsidiaries are taxed independently under UAE law, while branch profits are considered part of the parent company’s income, potentially leading to double taxation. Additionally, subsidiaries can pursue different business activities, while branches must replicate parent company operations.

Q3: How long does it take to set up a subsidiary in Dubai?

The timeline varies by jurisdiction and business complexity. Mainland processing typically takes 2-4 weeks from complete document submission, while free zone processing requires 1-2 weeks for standard activities, with some zones offering same-day approvals. Specialized activities may require sector-specific approvals, extending the timeline by 1-2 weeks. The total process typically takes 3-6 weeks, depending on document readiness and business complexity.

Q4: What is the minimum investment required to start a subsidiary in Dubai?

No legal minimum capital requirement exists for most business structures. Mainland companies have no minimum capital requirement for Limited Liability Companies (LLCs), though companies must specify capital in incorporation documents. 

Free zone requirements vary by zone, but most have eliminated minimum thresholds. From a practical standpoint, you should budget AED 15,000-25,000 for mainland setup or AED 12,000-20,000 for free zone setup, covering licenses, office space, and initial operational costs.

Q5: Should I choose the mainland or a free zone for my subsidiary?

Choose mainland if you need direct access to the UAE local market, plan to bid for government contracts, require maximum operational flexibility, and don’t mind higher setup costs and 9% corporate tax above AED 375,000. 

Choose a free zone if you want 0% corporate tax on qualifying income, prefer lower setup costs and streamlined processes, your business fits within free zone specializations, and international market access is your primary goal.

Q6: What documents are required from the Indian parent company?

Essential documents include the Certificate of Incorporation from the Registrar of Companies, the Memorandum and Articles of Association (MoA & AoA), the Board Resolution approving the Dubai subsidiary establishment, passport copies of shareholders and directors, address proof documents, audited financial statements for the past two years, and the Certificate of Good Standing if required. 

All documents must be properly attested through the complete chain: Indian notary, MEA India, UAE Embassy India, and UAE MoFA.

Q7: Can I open a corporate bank account immediately after getting the license?

Yes, but the process requires specific documentation, including a valid trade license and formation documents, a memorandum and articles of association, passport copies of directors and authorized signatories, visa and Emirates ID copies of shareholders, an office lease agreement (Ejari for mainland), and the parent company’s audited financial statements. Bank approval typically takes 2-4 weeks, with minimum balance requirements ranging from AED 3,000 to AED 25,000.

Next Steps

Setting up an Indian subsidiary in Dubai is now more straightforward—and more advantageous—than ever. You benefit from full foreign ownership, a streamlined licensing process, competitive tax rates, and unmatched access to regional and global markets. 

By choosing the right jurisdiction, preparing compliant documentation, and budgeting for realistic setup costs, you position your company to leverage Dubai’s pro-business ecosystem and the India-UAE CEPA’s trade advantages. Take a methodical, compliance-first approach, and your subsidiary will enjoy a fast start and a solid foundation for long-term growth across the Middle East and beyond.

Note: All information provided is based on current UAE regulations as of 2025. Business setup requirements and costs are subject to change, so always verify the latest information with relevant UAE government authorities before making final decisions.

Book your Free Consultation call today with the expert of JSB Incorporation for assistance regarding setting up your business in Dubai from India.