Indian company as shareholder in a Dubai LLC

The situation

A foreign company can hold shares in a mainland LLC. The authorities need its incorporation documents and a board resolution, attested for use in the UAE.

The law

• Federal Decree-Law 32 of 2021 on Commercial Companies: Corporate shareholders allowed subject to documents
• Art 34, Federal Decree-Law 47 of 2022: Transactions between the Dubai LLC and its parent must be at arm's length

What it means for you

Corporate ownership makes the LLC a related party of the Indian parent, so fees, loans and recharges between them must follow arm's length pricing for Corporate Tax. The India-side questions, such as overseas direct investment filings and Indian tax on dividends, belong to TaxSavvy's India service. Example: a management fee of AED 200,000 from the LLC to the parent must be supported by a pricing basis.

What to do

1. Get the parent board resolution and incorporation certificate attested.
2. Name the individual manager of the LLC.
3. File the beneficial owner register showing the people behind the parent.
4. Set a written intercompany pricing basis from day one.

Related

• Full foreign ownership of a mainland LLC
• First-year compliance calendar for a new company
• Documents a bank wants for a new company account
• Sole establishment or LLC for a small trading business
• Corporate Tax registration deadline for a new company
• VAT registration when starting a mainland company