Yes, and that’s mostly what they’re for. Offshore companies from RAK ICC, JAFZA Offshore or Ajman Offshore are often set up to own shares in other companies, hold intellectual property and, where the registry allows, own UAE property. Two things are off the table, though. No trading inside the country, and no visas for anyone. Which registry? Start from the asset and work backwards.
Thinking about putting a holding layer above your businesses? Our UAE offshore company setup team can help you match the registry to what you’re holding.
Founders usually come across offshore companies the wrong way round. Someone hears they’re cheap and quick, then tries to run a trading business through one, and it doesn’t work. Where an offshore holding company in the UAE does earn its place is above your businesses, not inside them. It owns things. It doesn’t sell things. Here’s what that looks like in practice, and where the limits are.
What Can an Offshore Holding Company in the UAE Actually Hold?
Quite a lot, as long as it’s holding and not trading.
Shares in other companies. This is the main use. Your Dubai trading company, that small subsidiary in Bangalore, a stake in a friend’s startup. All of it can sit under the offshore company. No more chasing three sets of share certificates with your personal name on each one.
Trademarks, software and other IP. Trademarks, software, content rights and patents can be held by the offshore company and licensed out to your operating companies. That keeps valuable IP apart from the day-to-day trading risk.
Property. Some registry companies can own real estate in designated freehold areas, with the land department’s approval. Which emirates and which areas depend on the registry, and this is one of the main reasons to choose one registry over another.
Investments and other assets. Portfolios, shareholdings in other ventures and similar assets can sit in the holding company too.
The idea is simple. Operating companies do the work and carry the operating risk. The holding company sits above them, owns them and keeps the assets in one place.
What Can’t an Offshore Company Do?
This part matters as much as the uses.
An offshore company can’t trade within the UAE. It can’t have an office lease in its own name for operations, it can’t sell to UAE customers and it can’t run a local business. If you need to do any of that, you need a free zone or mainland company, which the offshore company can own.
It also can’t sponsor residence visas. No visas for you, no visas for staff. If residency is part of your plan, it has to come through an operating company or another route.
Banking is possible but harder. UAE banks do open accounts for offshore companies, but they look closely at ownership, the purpose of the company and the source of funds. Expect more questions than you’d get with an operating company, and have a clear explanation of what the company holds and why.
Why Do So Many Founders Pick a RAK ICC Holding Company?
RAK ICC is probably the best-known offshore registry in the UAE, and it’s popular for holding structures for a few practical reasons.
Setup is straightforward through a registered agent, with no office or visa requirements. The registry is used to holding structures, so share ownership, IP holding and asset holding are all things it handles routinely. Its companies can also be used for property holding in certain approved areas, subject to land department rules. For a lot of founders, a RAK ICC holding company is the default starting point.
JAFZA Offshore and Ajman Offshore are the other names that come up. JAFZA Offshore has long been associated with holding Dubai property. Ajman Offshore is often seen as a lower-cost option. The differences between them come down to property eligibility, cost, how each registry handles administration and how comfortable your bank is with each one. If property is the main thing you’ll hold, start with which registries are accepted where your property is.
Here’s a setup we see often. A founder runs a free zone trading company in the UAE, has a small subsidiary in India and owns an apartment in a Dubai freehold area, all in their personal name. They set up an offshore holding company to own the free zone company, the Indian subsidiary and, where eligible, the apartment. Ownership is now in one place, it’s easier to bring in a partner at the holding level, and the operating companies carry on trading as normal. The work is in the paperwork and in getting the property side approved, not in the idea itself.
If you’re mapping out something similar, our UAE offshore company setup team can help you work out which registry fits what you’re holding.
Offshore companies get a reputation problem because people try to use them for things they were never built to do. As a holding company, they’re simple and genuinely useful. Decide what you want the company to own before you pick the registry, especially if property is involved, and get tax advice on the income it’ll receive. Most of the problems I see come from skipping one of those two steps.
— Mahima Sharma, Managing Partner, Smart Zone
How Is Holding Income Taxed?
Carefully is the honest answer. Get advice on your specific setup.
UAE corporate tax applies to offshore companies like other UAE juristic persons. For holding companies, the relevant question is usually how dividends and gains from the companies they own are treated. Dividends from UAE companies are generally exempt. Income from foreign shareholdings may be exempt under the participation exemption, but only if conditions are met, including a minimum shareholding, a minimum holding period and the subsidiary being taxed adequately where it is.
IP royalties and rental income from property are a different matter, and can be taxable depending on the structure. This is one area where getting a tax adviser involved before setup, not after, pays for itself. The structure can usually be designed to work well. It just needs to be designed on purpose.
