Contents
A holding company does not run an operating business. It owns shares in other companies, assets or rights to intellectual property.
Why a holding company
- Bring several businesses under a single owner
- Separate assets from operating risks
- Simplify the ownership structure and succession
- Receive dividends and proceeds from the sale of shares
- Own brands and patents
Why the UAE is chosen
- A developed banking system and legal environment
- Clear ownership rules
Tax matters depend on the structure of the business and your country of residence. They are best discussed with a tax adviser.
Where holding companies are registered
Holding companies are set up in specific zones and jurisdictions that offer special regimes for such structures. The choice depends on what you own and in which countries. Comparison criteria are in the article How to Choose a Free Zone.
Limitations
- A holding company should not be a purely formal "empty" shell
- Banks scrutinise the ownership structure closely
- Proper accounting and documents are needed for each shareholding
Conclusion
A holding company is justified when you have several assets or businesses, or plan to scale them. For a single small business, an ordinary company is usually sufficient. Learn more on the company formation page.