When a holding company in France, Belgium, or another country has significant cash reserves, it may make sense to consider a real estate investment in Dubai through a local subsidiary. The logic is simple: rather than investing in one’s own name, the parent company creates a dedicated structure in the United Arab Emirates, which will hold the real estate assets.
Using existing cash reserves intelligently
Many holding companies accumulate cash over the years—dividends from operating subsidiaries, asset sales, retained earnings… amounts can become significant. Leaving these funds idle in a bank account is not always optimal.
Creating a subsidiary in Dubai allows the company to use these cash reserves to acquire property in a dynamic market while maintaining a clear corporate structure. The parent company remains at the top of the organizational chart, owning 100% of the Dubai subsidiary, which becomes the investment vehicle.
Establishing a subsidiary in Dubai
Specifically, the foreign parent company forms a company in Dubai. This subsidiary is legally independent (it has its own legal personality, unlike a branch) but fully owned by the holding company. It will have its own articles of association, bank account, and accounting.
The funds required for the real estate investment are provided by the parent company in two complementary ways:
As share capital;
As a shareholder current account.
Once the subsidiary is funded, it can proceed with acquiring one or more properties in Dubai. The property is legally owned by the local company, not directly by the parent company.
Rigorous and documented management
The Dubai subsidiary must maintain full accounting records. This includes preparing an annual balance sheet and income statement. This discipline is not an unnecessary burden: it allows precise documentation of asset values, rental income, expenses, and net results.
A locally accredited auditor must prepare an annual report. This is essential as it ensures transparency and compliance. The parent company thus has a clear, formal view of the subsidiary’s financial situation.
Additionally, an annual general meeting resolution must be drafted. This document validates the accounts, decides on profit allocation, and formalizes important decisions. It serves as legal protection and proof of good governance.
This organization enhances the credibility of the structure with banks, partners, and, of course, the parent company.
Dividend repatriation and the parent-subsidiary regime
One of the main advantages of this structure is the repatriation of dividends.
Once the Dubai subsidiary generates profits—through rental income or capital gains, for example—it can distribute dividends to its parent company. If the conditions in the holding company’s country (France, Belgium, etc.) are met, the parent-subsidiary tax regime can apply.
This regime allows, under certain conditions, almost full exemption of dividends received by the parent company. In practice, this means that profits flow back with optimized taxation at the holding level.
The structure then makes complete sense: the investment is made in Dubai, profits are consolidated at the parent company level, and everything remains fully documented.
A coherent and defensible framework
Contrary to some misconceptions online, this is not an “opaque scheme.” On the contrary, this approach is based on classical corporate law principles: a holding company, an operating subsidiary, documented cash flows, and transparent accounting.
The possibility of a residence visa
Another notable advantage concerns on-site presence.
Establishing a subsidiary in Dubai allows for the appointment of a local manager, who can obtain a residence visa linked to the company. For an executive or representative of the holding company, this facilitates travel, property management, and the development of complementary activities in the region.
The subsidiary can thus become a true foothold in the Middle East.
Feel free to contact us if you have any questions about this solution.
