Hi, I'm Robert from the UK. My company already operates in London, and we're planning to expand into the UAE. Can we set up a Free Zone company as a subsidiary of our existing business, or do we need to create a completely separate company?
Hi Robert,
I'm Himanshi Dawra, and this is a question I often receive from businesses looking to expand into the UAE.
The answer is yes, a UAE Free Zone company can absolutely be established as a subsidiary of another company. Whether your parent company is based in the UAE or overseas, it can own 100% of the shares in the Free Zone entity, provided the Free Zone's requirements are met.
Although the subsidiary is owned by the parent company, it operates as a separate legal entity. This means it has its own trade licence, legal identity, and financial responsibilities. One of the biggest advantages of this structure is that the parent company's liability is generally limited to its investment in the subsidiary, helping protect its global assets from any obligations of the UAE business.
Another benefit is that there is no requirement for a local sponsor, allowing foreign companies to retain full ownership of their UAE subsidiary.
To complete the incorporation, you'll usually need documents from the parent company, including the Certificate of Incorporation, Memorandum and Articles of Association, and a Board Resolution approving the establishment of the UAE subsidiary. Depending on where the parent company is incorporated, these documents may also need to be notarised and attested.
If your objective is to establish a presence in the UAE while keeping your existing international business separate, a Free Zone subsidiary is one of the most efficient and widely used structures.
