Business setup · Finance & holding
How to Set Up a Holding Company in the UAE
A holding company in the UAE is an entity that owns shares in other companies or holds assets such as property and intellectual property, rather than trading itself. It can be formed on the mainland, in a free zone such as DMCC, ADGM or DIFC, or as an offshore company in JAFZA or RAK ICC, depending on what it holds and where.
Fact-checked against official sources on · EH Management Consultancy LLC
At a glance
Key facts
- Purpose
- Owning shares, property or IP rather than trading
- Free zone options
- DMCC, ADGM, DIFC and others
- Offshore options
- JAFZA Offshore, RAK ICC
- Tax
- Participation exemption may apply to qualifying dividends and gains
- Visas
- Offshore companies cannot sponsor visas
What do you need to know first?
The right jurisdiction depends on what the holding company owns. Holding UAE mainland subsidiaries, foreign subsidiaries, UAE property or IP each raise different questions about registration, banking and tax. Common-law centres such as ADGM and DIFC are popular for investor-facing groups; offshore companies suit simple asset holding with no UAE operations.
Under UAE corporate tax, dividends and capital gains from qualifying shareholdings may be exempt under the participation exemption, which requires conditions including an ownership interest of at least 5% held for at least 12 months. Holding companies still register with the Federal Tax Authority and must show where decisions are made.
Holding companies are also used for succession planning and to separate operating risk from valuable assets. Foundations, available in DMCC, ADGM and DIFC, can complement a holding company for families who want to keep control while planning for the next generation.
Regulators
Which approvals are needed?
Where to set up
Which jurisdictions suit this activity?
Visas: Free zone and mainland holding companies can sponsor visas within their premises allocation. Offshore holding companies cannot sponsor residence visas.
Process
Step by step
-
01
Map the assets
List the shares, property and IP the company will hold.
-
02
Choose the jurisdiction
Mainland, free zone, common-law centre or offshore.
-
03
Form the company
Register and appoint directors and shareholders.
-
04
Open banking
Prepare ownership and source-of-funds evidence.
-
05
Register for tax
Register with the FTA and assess the participation exemption.
Checklist
What should you prepare before applying?
Settle these before you pay any government fees.
- 01
List what the company will hold and where those assets are.
- 02
Decide whether investors or banks prefer a common-law jurisdiction.
- 03
Check whether the holding company needs visas or premises.
- 04
Document where board decisions are made.
- 05
Assess the participation exemption before relying on 0% on dividends.
Frequently asked
Questions about holding company in the UAE
Can a UAE offshore company own a mainland company?
Ownership of mainland shares by offshore companies is subject to the rules of the mainland licensing authority. Check before you structure, as some authorities restrict it.
Are dividends received by a UAE holding company taxed?
Dividends from qualifying shareholdings may be exempt under the participation exemption, which requires at least a 5% ownership interest held for 12 months, among other conditions.
Which is better for a holding company: ADGM or DIFC?
Both are common-law financial centres. The choice usually depends on investors, banks, team location and whether you prefer Abu Dhabi or Dubai.
Does a holding company need an office?
Free zone and mainland entities need registered premises. Offshore companies use a registered agent’s address and cannot lease UAE premises.
Can a holding company have employees?
Mainland and free zone holding companies can sponsor staff within their premises allocation. Offshore holding companies cannot sponsor visas.
Official sources
Verify it yourself
Regulators update their rules. These are the authoritative references behind this guide.
Related
Services and guides
Ready to license your holding company business?
We confirm the activity, approvals and best jurisdiction before you pay any government fees.