Holding Company Setup in UAE: Expert Guidance by Dahhan Business Services
A holding company owns controlling stakes in its subsidiary companies and manages investments rather than directly engaging in operational business activities. This structure offers a strategic advantage for asset protection, risk management, and centralized control over various business entities. The United Arab Emirates (UAE), with its robust legal framework and strategic location, has become a prime destination for establishing holding companies.
Why Choose the UAE for Your Holding Company Setup?
The UAE provides numerous benefits for holding company setup, making it a top choice for investors and multinational enterprises. Some key advantages include:
Tax Benefits:
The UAE offers a tax-friendly environment with no corporate taxes for most companies except for oil companies and branches of foreign banks. There are also no personal income taxes.
Geographical Advantage:
The UAE’s strategic location acts as a gateway connecting the East and West, facilitating global business operations and trade.
Robust Legal Framework:
The UAE has a well-established legal system that offers asset protection through international treaties and robust corporate laws.
Access to Global Markets:
The UAE’s numerous free trade zones provide access to global markets and provide 100% foreign ownership.
Stable Political Environment:
The UAE offers a stable political environment which is crucial for the longevity and stability of holding companies.
Types of Holding Companies in the UAE
A holding company in the UAE is a business entity that owns shares in other companies but does not engage in direct operational activities. These companies are commonly used for asset protection, investment management, and tax optimization. The three main types of holding companies in the UAE are:
Mainland Holding Company
Registered under the UAE Commercial Companies Law.
Can own shares in both mainland and free zone companies.
Requires compliance with UAE corporate tax regulations.
Suitable for investors seeking greater flexibility in business operations.
Free Zone Holding Company
Established within a UAE free zone (e.g., DIFC, ADGM, JAFZA).
Allows 100% foreign ownership without the need for a local partner.
Offers tax benefits such as 0% corporate tax (subject to UAE tax laws).
Limited to owning shares in companies within the same free zone or internationally.
Offshore Holding Company
100% Foreign Ownership – Full control over your company without needing a local partner or sponsor.
Tax Benefits – Zero corporate tax, personal income tax, and withholding tax in offshore jurisdictions and No Value Added Tax (VAT) obligations for offshore companies.
Asset Protection – Safeguard assets such as real estate, shares, intellectual property, and investments under a legally recognized entity.
Helps in estate planning and wealth management.
Limited Liability Protection – Shareholders’ liability is limited to their capital investment, protecting personal assets.
No Office Space Requirement – Unlike mainland and free zone companies, offshore companies do not need a physical office in the UAE. A registered agent provides the official address.
No Audit or Financial Reporting Requirements – Offshore companies in the UAE are not required to submit annual financial audits or reports in most cases.
Confidentiality & Privacy – No public disclosure of shareholder or director details in offshore jurisdictions. Beneficial for business owners who prefer to keep their financial affairs private.
Ease of Global Business Operations – Can own shares in UAE and international companies. Suitable for international trade, investments, and IP holding.
Cost-Effective Setup & Maintenance – Offshore company formation has lower setup and renewal costs compared to mainland and free zone entities.
Repatriation of Profits – 100% repatriation of capital and profits without currency restrictions.
Best UAE Offshore Jurisdictions
- RAK ICC (Ras Al Khaimah International Corporate Centre)
- JAFZA Offshore (Jebel Ali Free Zone)
- Ajman Offshore
Key Advantages of Holding Companies in the UAE:
Asset Protection – Secures investments and intellectual property.
Tax Benefits – Access to corporate tax exemptions in certain free zones.
Investment Diversification – Holds multiple businesses under a single entity.
Ease of Business Operations – Simplifies management and regulatory compliance.
Steps to Set Up a Holding Company in the UAE
Setting up a holding company in the UAE involves several steps, depending on whether you choose a mainland, free zone, or offshore jurisdiction. Below is a step-by-step guide:
Step 1Choose the Jurisdiction
Decide where to establish your holding company:
Mainland – Requires a local service agent; governed by UAE Commercial Companies Law.
Free Zone – Full foreign ownership, tax benefits, and streamlined processes.
Offshore – Asset protection, international operations, and no physical presence required.
Step 2Determine Business Activities
A holding company can own shares in other businesses, real estate, intellectual property, and other assets. However, it cannot conduct operational activities—only manage its investments.
Step 3Choose the Legal Structure
Limited Liability Company (LLC) (for mainland)
Free Zone Holding Company
Offshore Holding Company (RAK ICC, JAFZA Offshore, Ajman Offshore)
Step 4Reserve a Company Name
The name must comply with UAE regulations and should not include offensive or religious terms.
Some jurisdictions require “Holding” in the company name.
Step 5Submit Required Documents
Typical documents include:
- ZPassport copies of shareholders and directors
- ZProof of address (utility bill, bank statement)
- ZBusiness plan (for some free zones)
- ZNo Objection Certificate (NOC) if applicable
- ZMemorandum & Articles of Association (MOA/AOA)
Step 6Obtain Initial Approvals
The relevant authority (mainland, free zone, or offshore) will review and approve the application.
Step 7Lease a Virtual or Physical Office (If Required)
Some free zones require a minimum flexi-desk or office space rental.
Offshore companies typically do not need physical office space.
Step 8Pay Fees & Register the Company
Pay the incorporation and licensing fees, which vary by jurisdiction.
Step 9Open a Corporate Bank Account
Choose a bank and provide the required compliance documents.
Offshore holding companies may require an international bank.
Step 10Obtain Business License & Corporate Documents
Once approved, receive the trade license, incorporation certificate, and share certificates.
Step 11Comply with UAE Regulations
File financial statements (if required).
Renew licenses annually.
Adhere to UAE Economic Substance Regulations (ESR) and Ultimate Beneficial Owner (UBO) requirements.
Post-Setup Requirements for a Holding Company in the UAE
After successfully setting up your holding company in the UAE, certain administrative and compliance tasks must be executed:
Maintaining Proper Records
The holding company needs to keep proper financial records and minutes of meetings.
Annual Renewal
Business licenses in UAE need to be renewed annually along with lease renewals where applicable.
Auditing
Some free zones require audited financial statements annually. It’s a good practice regardless of legal requirements for maintaining transparency and good corporate governance.
Visa Processing
If you need to bring in employees or partners, you need to apply for residency visas. Dahhan offers visa processing services to make this process smooth.
Why Partner with Dahhan Business Services?
Dahhan Business Services stands out as a leading service provider in the UAE owing to its comprehensive range of business setup services. Our expert team guides you through every step of holding company establishment:
Expert Consultation:
We provide expert advice on the best jurisdiction and legal structure for your holding company based on your unique business needs.
Document Handling:
We handle all the paperwork including company name reservation, initial approvals, and license applications.
Office Solutions:
We assist in finding suitable office space whether it’s a physical office or a flexible virtual office solution.
Bank Account Opening:
Dahhan Business Services helps you navigate the process of opening a corporate bank account in the UAE smoothly.
Visa Assistance:
Our experienced team makes the visa application process hassle-free.
Conclusion
Establishing a holding company in the UAE unlocks powerful advantages—ranging from tax efficiency and global asset protection to the UAE’s strategic business location. Whether you’re interested in setting up in a free zone or choosing a mainland structure, the process doesn’t have to be complicated.
With Dahhan Business Services as your trusted partner, you gain expert guidance and seamless support tailored to your unique business goals. Our team simplifies every step—from documentation to government approvals—ensuring a compliant and future-ready business structure.
Take the smart step toward strategic growth. Contact Dahhan Business Services today to set up your UAE holding company with confidence.
