Holding company structures

A holding company is a business entity that owns and manages assets, shares, or interests in other companies without engaging in operational activities. It is a strategic structure used for asset protection, tax efficiency, and corporate governance. In the United Arab Emirates (UAE), holding companies can be established in the mainland, free zones, or offshore jurisdictions, each offering unique advantages.

Types of Holding Companies in the UAE

✅ Mainland Holding Company

• Registered with the Department of Economic Development (DED).

• Can own shares in UAE-based companies and subsidiaries.

• Subject to UAE Corporate Tax (9%) on taxable income above AED 375,000.

• Must comply with UAE economic substance regulations (ESR).

✅ Free Zone Holding Company

• Established in designated Free Zones with 100% foreign ownership.

• Offers tax benefits, including 0% Corporate Tax on Qualifying Income (subject to conditions).

• Cannot engage in direct commercial activities in the UAE mainland.

• Popular in Dubai International Financial Centre (DIFC), Abu Dhabi Global Market (ADGM), and Jebel Ali Free Zone (JAFZA).

✅ Offshore Holding Company

• Registered in offshore jurisdictions such as JAFZA Offshore, RAK ICC, or Ajman Offshore.

• Used for international investments, asset protection, and tax optimization.

• No UAE Corporate Tax but cannot conduct business within the UAE.

• Not eligible for UAE residency visas or physical office space.

Advantages of a Holding Company in the UAE

✔ Tax Efficiency – Free Zone and Offshore Holding Companies can benefit from 0% tax on certain income streams.
✔ Asset Protection – Separates operational liabilities from investments and owned assets.
✔ Ownership & Control – Provides a centralized structure to manage multiple businesses and subsidiaries.
✔ Risk Management – Reduces exposure to financial and legal risks associated with operational entities.
✔ International Expansion – Facilitates cross-border investments with tax treaty benefits.