Establishing a company in the UAE for organization of holdings and structures
This article covers benefits of establishment of a company in the Arab Emirates to organize a holding structure with a control center in the territory of the UAE.
Building a holding structure with a control-management center in the UAE is an effective instrument to solve various business tasks. Such instrument allows:
- consolidate all the assets;
- increase profitability of business;
- optimize management of cash flows;
- obtain access to other financial resources.
With full transparency of the UAE tax system and participation of the state in events aimed at fighting money laundering, the legislation of the Arab Emirates is intended to ensure total confidentiality for foreign investors and protect from exchange of information (automatic).
Factors owing to which investors give preference to the Arab Emirates when choosing a place to establish an international holding structure:
- available developed network of agreements on avoidance of double taxation;
- protection of investments on a legislative level;
- absence of taxes at input/output of cash assets; zero tax on income – royalty, dividends, profit, free input/output of capital.
Benefits obtained upon establishment of a company in the UAE (parent company) when organizing a holding structure
The UAE are unique low-tax jurisdiction where nearly every business controlled from within this territory does not pay taxes (except 5% VAT if operating in the internal local market). In the Arab Emirates, you may realize your right for free input/output of capital, which allows you obtaining profit from your business. The state provides:
- low transaction costs;
- protection of investors’ assets;
- absence of currency control;
- absence of inflation.
These particular factors motivate investors to choose the United Arab Emirates for building an effective holding structure.
You may optimize the tax basis by applying provisions of the international convention on avoidance of double taxation
An international structure of holding is organized so that to minimize tax deductions and obtain the maximum profit from international business. With this purpose, provisions of agreements on avoidance of double taxation must spread over a parent company, daughter companies, and a recipient of dividends.
If the Arab Emirates and the country of registration of the key company had not concluded an agreement on avoidance of double taxation, you may still use more complicated holding structures, namely a mixed holding established on the basis of multiple jurisdictions. Your head company located in one of jurisdictions of the UAE will be dealing with management of assets in all branches, as well as will distribute financial flows to minimize risks and optimize tax deductions.
You may use the possibility of protection and concealment of a beneficiary
Under the legislation of the Arab Emirates and defined rules for establishment of different types of companies within one country, which are regulated by certain administrative bodies, there is a possibility of complete concealment of a final beneficiary of business.
The judicial practice of the Arab Emirates and the commercial legislation allow executing shareholding agreements that are a legal instrument protecting interests of all participants of business and allowing eliminating conflicts that may arise between partners.
Our specialists offer effective structures for organization of business that will keep confidentiality of beneficiaries and will become a reliable instrument for operating in the UAE territory. To obtain our services, please contact us at [email protected] .
Registration of company in the UAE in free zone – another service offered by us!
You may combine different business trends
A holding is a definitely structured chain where each link performs certain functions. Holding structures may combine an unlimited number of companies operating as within one country, so as abroad. Considering all issues that often arise when a businessman wants to perform different types of activity in a format of one legal entity, establishment of a holding allows solving this problem, as well as creating business with simple and clear system of control from within the territory of the UAE.
If there is a financing company in a holding, it is usually registered in a place with access to maximum cheap financial resources, as well as minimum taxation of interest return. Consequently, operation fees are established in the jurisdiction which provides maximum favorable conditions for making business as a whole. The United Arab Emirates are attractive jurisdictions under many parameters.
You may organize movement of cash flows within a group, as well as merger and acquisition of assets available abroad
The Arab Emirates provided all conditions for effective operation of holding structures in the territory of the state. Here you may:
- centrally manage cash flows;
- input/output assets;
- freely transfer a capital between your own branches around the world;
- organize lending for daughter companies from the head company to optimize the tax base;
- enjoy the absence of corporate taxes on profit;
- perform other operations.
With these instruments, you may:
- promptly control financial flows within a structure;
- obtain a minimized tax burden;
- withdraw cash assets in the most preferable jurisdiction.
Because of a global tendency to strengthen the control over cash turnover, we recommend you to ask our specialists for advice – they will develop correct schemes for holding organization for you.
You may develop transaction schemes without limitations or prohibitions within a holding structure
Companies within a holding structure may supply goods and provide services to other links of this holding at individually defined prices not bound to market ones. Therefore, companies within a holding structure can minimize the tax burden.
Statutory regulation of the “transfer pricing” significantly varies from country to country. Therefore, if you want to establish the utmost effective scheme, we recommend to hire professionals who know all the peculiarities of the international laws.
You may consolidate assets as well as establish “transparency” of the financial reporting
If a parent company of a holding is in the Arab Emirates, you may consolidate all business assets and reach high indexes in capitalization rate of a company, which speaks of financial stability and characterizes your paying ability in a long-term perspective. As result, you will be able to:
- participate in big tenders;
- attract cheap credit resources;
- obtain investments from the part of the strategic investor;
- conclude big contracts.
Besides, you will be able to use ready holding companies, which were established more than 2-3 years ago in the UAE, for provision of balance and audit reports for previous period according to international standards to certify stability of your business. By notarizing all documents in approved audit company in the Arab Emirates, you may increase the status of your company before counteragents, as well as may prove “transparency” of your bookkeeping and tax payments.
You may create a consortium in business o expand the geography of presence and development
Using a holding structure in the United Arab Emirates allows foreign investors creating consortiums subordinate to you, which let you enter global markets including countries of the Persian Gulf, own services or goods, under the flag of the UAE. This approach lets you have a loyal attitude of a business community and privileges available for companies opened in the Arab Emirates.
Specialists of our company are ready to provide professional assistance to all types of businesses. We offer complex solutions on building holding structures, opening companies, consulting and administrative support. Using solutions provided by our company, you will be able to create a control-management center in the territory of the Arab Emirates, the low-tax jurisdiction with all conditions for obtaining the maximum profit from business. Feel free to contact us at [email protected] , and we will get back to you as soon as possible.