Holding Company in UAE is a company structure used to own shares and assets of other companies. It will help in asset protection and consolidation of earning all under a single roof. Holding Company in UAE does not indulge in any business by itself. However, it a preferred way to manage assets and wealth by investors based in UAE or operating outside of UAE.

What is a Holding Company License in UAE?

Holding Company License in UAE is ideal for shares or assets held by companies or entities in different jurisdictions. ‘Participation Exemption’ applies to holding shares of companies located elsewhere. The dividends earned by investing in shares of other companies in UAE or foreign subsidiaries through a UAE Holding Company is subject to tax exemptions.

This article highlights the scope of a Holding Company in UAE and how the Holding Company License in UAE is beneficial for investors to unify their businesses, assets into a single entity for better management and control. Thus, holding company in UAE will help business owners to secure company ownership effectively.

Table of contents – Holding Company in UAE

Starting a Holding Company in UAE will help business owners to maintain confidentiality, channel family wealth, and manage control effectively. Furthermore, having a holding company helps to better control a group of companies and manage their assets effectively. Additionally, the investors can benefit from tax savings by forming a holding company in a tax haven like UAE.

Holding Company in UAE

Start a Holding Company in UAE is a method not to expose the personal identity of the shareholder. It will help safeguard the identity of the shareholder who intends to manage their assets worldwide.

Setting Up a Holding Company in UAE

Business owners are always looking for ways to protect their business assets. One of the most effective ways to unify businesses that are into diverse sectors and activities is the formation of a holding company in the UAE. One of the most effective ways to unify businesses that are into diverse sectors and activities is the formation of a holding company in the UAE.

In UAE, there are mainly three business jurisdictions that offer provisions for establishing a  holding company.

1. RAKICC Offshore Holding Company

Offshore Holding Company in the UAE is a popular company type among investors within and outside UAE and conduct business internationally. As the holding Company will not be conducting any trade or service, it will only be holding the ownership of other companies operating around the world.

The RAKICC offshore holding company is a popular company structure that can be used for safeguarding shares, and assets in companies worldwide. It can also setup a RAKICC Free Zone subsidiary company with office space at Ras al Khaimah. RAIKICC Offshore Company is also eligible to purchase property in specific free hold areas of Dubai and Ras Al Khaimah.

Register Holding Company

2. Free Zone Onshore Holding Company in UAE

Holding Company in Free Zones can be setup to avail similar benefits of an Offshore Holding Company. The Free zone holding company will be eligible for having physical office spaces and visas under it.

Free Zones like IFZA, Meydan, RAKEZ, SHAMS are issuing Holding Company Licenses in the UAE. Foreign companies can set up a holding company in UAE and leverage the Double Taxation Avoidance Agreement benefits. Also, maintain secure company operations, and asset protection.

Setting up a Holding Company in the UAE is highly beneficial for investors especially those in high tax-paying countries. It is ideal for them to move their office to Dubai. There is no special approvals or additional requirements for the setup of a Holding Company in UAE.

3. Mainland Holding Company in UAE

A Holding Company in the UAE Mainland is established as a LLC and it solely holds assets and shares in other operating companies, The holding company cannot directly engage in any trade or service.

The Dubai Economy in Dubai issue the Holding Company License in Dubai. Similarly, respective Department of Economic Development of the other Emirates is the licensing authority that issues a Holding Company License in UAE.

The investors can secure and safeguard their identity and assets, shares, dividends from holding other company shares, etc, under a single roof. The Holding Company helps them structure their investments and assets more effectively.

Can a Holding Company Purchase Properties in Dubai and RAK Emirate?

Yes, RAKICC Offshore has announced a partnership with RAK Municipality Department for enabling investors to purchase and register properties in the Emirate of Ras Al Khaimah. Additionally, RAKICC Offshore Holding Companies are eligible to purchase properties in specific freehold areas of Dubai as well.

Investing in properties in the UAE through RAK ICC Holding Company (RAK ICC Holdco) has many benefits, such as:

  • No Paid-up share capital and 100% profits repatriation
  • Re-distribute assets to the holding company for tax purposes.
  • Ease of transfer when buying and selling properties.
  • Greater privacy, with no shareholder details on the public register.
  • Easy transfer of domiciliation or continuation.

Requirements for Opening a Holding Company in UAE

To set up a holding company in UAE the company must follow the below requirements:

  • Setting up a management board that will be in charge of the leadership and decision-making. A shareholder resolution needs to be made. (Aurion will assist you in this process)
  • The Director Board should be formed with at least one director for each subsidiary firm
  • Share Certificate representing the share capital and shareholding pattern for the holding company
  • Passport copies, home address proof and photographs of the directors and shareholder

Do Holding Company in the UAE have to pay Corporate Tax?

It is mandatory for all offshore holding company to register for corporate tax A UAE Holding Company can own shares in other companies and still benefit from 0% corporate tax on income derived from those holdings. This includes dividends and capital gains, provided certain legal conditions are met.

However, Holding Companies in UAE can still achieve a 0% tax rate on share-related income through the Participation Exemption regime.

Participation Exemption for UAE Companies: – Dividends received from UAE-resident companies are fully exempt from corporate tax, with no minimum ownership requirement.

Participation Exemption for Foreign Companies – Dividends and capital gains from foreign subsidiaries are exempt if the following conditions are met:

  • The UAE holding company holds at least 5% ownership in the foreign company, or the investment value is at least AED 4 million.
  • The shares are held (or intended to be held) for a minimum of 12 months.
  • The subsidiary is subject to a corporate tax rate of at least 9% in its home jurisdiction.
  • The Subsidiary must have at least 50% of non-qualifying activities in home country ( must be a real business in operation)

So, Holding Company License in UAE is a company structure that will investors to effectively manage their assets, capital investments, shares and dividends earned from shares of other companies they have invested all under a single legal entity.

Holding Company will act as a safeguard for the assets and income generated from other subsidiary companies. UAE is the perfect place to start a Holding Company as the governance structure and Licensing authorities provide a robust framework and support to launch the business in the region effectively.

To know more about Opening a Holding Company in UAE, talk to our expert business setup consultants right away!

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