How to Start a Holding Company in the UAE

holding company in the UAE

As an investor in the business world, handling a company can have its set of challenges, but managing a portfolio of businesses without a defined structure can leave you biting off more than you can chew. Starting a holding company can create a legally formed structure for business and financial portfolios.

Starting a holding company is a strategically sensible move for investors or entrepreneurs because it can reduce risk, increase diversity, and promote synergy to control various investments or businesses under a single umbrella. Starting a holding company in the UAE can unlock a multitude of benefits that can significantly enhance business success and financial prosperity. It offers numerous advantages that can greatly influence long-term success and wealth, including tax optimization, strategic expansion prospects, asset protection, and a host of other benefits.

Here, you will find relevant information about the business activities you can select under this license when establishing a holding company in the UAE.

Note: With one business license, you can have up to seven shareholders. Acquire an unlimited number of visas for investors, partners, or employees when you set up your business with SPC Free Zone.

6420.00 Activities of Holding Companies

This category focuses on the activities of an entity that exists to hold a portion of or a controlling stake in another business or company. In most cases, these types of business structures do not manufacture goods or provide services themselves but rather have a stake in another company or subsidiaries that do. A holding company’s main function is to own assets such as bonds, stocks, and real estate, and usually handle the financial and legal aspects of the assets.

By starting a holding company, you gain access to a range of advantages that include reduced risk, favourable tax benefits, and streamlined management of a diverse portfolio of businesses. They commonly use their structure as a strategic tool to consolidate multiple businesses into one large entity, enabling better corporate governance, efficient resource allocation, and diversification.

This category does not include the following classes of activities: active management of companies and enterprises; strategic planning and decision-making of the company;

Third-party Approval: This business activity does not require third-party approval.

Filing of Economic Substance Returns: The filing of economic substance returns is required for this activity

Anti-Money Laundering Compliance: This requirement does not apply to Business Activity 6420.00.

6420.01 Activities of holding companies

In this category, the primary function of the holding company is to hold assets and control the equity levels of a group of subsidiary corporations. Under this business activity, a holding company does not provide or offer any extra set of services to the subsidiaries they own, unlike other types of corporate entities.

These types of companies are mainly involved as owners and have no business becoming involved in the running of the subsidiary divisions. The distinct function of holding companies as strategic entities mainly focuses on their ownership and control over assets within a corporate group structure.

This category excludes the following classes of activities: strategic planning, corporate decision-making, and active management of businesses and enterprises.

Third-party Approval: This business activity does not require third-party approval.

Filing of Economic Substance Returns: The filing of economic substance returns is required for this activity

Anti-Money Laundering Compliance: This requirement does not apply to business activity 6420.01.


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