As international business structures become more common, many entrepreneurs and business owners are exploring ways to expand their operations across borders. One powerful structure involves setting up a UK holding company that owns a UAE entity. But how does this actually work—and why do so many choose this model?

At Evolve Tax UAE, we help clients across the globe set up efficient, compliant cross-border company structures. In this blog, we’ll break down how a UK holding company can legally and effectively own a UAE company, and what benefits this offers.

What Is A Holding Company?

A holding company is a parent company that doesn’t usually engage in its own business operations but instead holds shares in other companies. In this case, the UK company owns shares in a UAE-registered entity.

Why Use A UK Holding Company?

Setting up a UK holding company comes with several strategic advantages:

• Reputation: The UK is a well-respected, low-risk jurisdiction—this builds trust with banks and clients.
• Access to Treaties: The UK has an extensive tax treaty network that can reduce withholding taxes on dividends and interest.
• Familiar Legal System: The UK’s corporate laws are stable, transparent, and well-established.
• No Withholding Tax on Dividends: Dividends paid by UK companies to non-residents are generally not subject to UK withholding tax.

Why Own A UAE Entity?

The UAE is a global business hub offering:

• 0% Corporate Tax (for Free Zone companies meeting qualifying criteria)
• No personal income tax
• Strategic location between Europe, Asia, and Africa
• 100% foreign ownership allowed in many Free Zones and mainland sectors

How The Structure Works

Here’s a simple breakdown:

1. Set up the UK Holding Company

• Typically a UK Ltd company
• Owned by the ultimate beneficial owner (individual or trust)
• Can be set up with as little as £1 share capital

2. Form A UAE Company

• The UAE company (usually in a Free Zone) is set up
• 100% of the shares are held in the name of the UK holding company

3. UAE Licensing & Compliance

• The UAE entity gets its license (trading, consulting, etc.)
• Appoints a director (can be a UK or UAE resident)
• Opens a corporate bank account locally

Ownership And Control

The UK company is the legal shareholder of the UAE entity. The individual owner still retains control by:

• Being the ultimate beneficial owner (UBO) of the UK holding company
• Acting as the director or having trusted individuals manage the UAE entity

Tax & Compliance Considerations

This structure is fully legal and compliant, but must be set up and maintained properly:

• UK Compliance: Annual filings, accounts, and tax returns are required in the UK
• UAE Compliance: Annual license renewal, VAT (if applicable), ESR (Economic Substance Regulations), and corporate tax (if applicable)

At Evolve Tax UAE, we help clients meet both UK and UAE obligations while optimizing their structure for tax efficiency and operational success.

Who Is This Structure For?

This model is ideal for:

• UK residents expanding into the UAE
• Business owners looking for international structuring
• High-net-worth individuals wanting asset protection
• Entrepreneurs looking to access UAE banking and residency benefits

How We Can Help

At Evolve Tax UAE, we offer end-to-end support for setting up UK and UAE entities. From company formation to bank account opening, tax strategy to ongoing compliance—we’ve got you covered.

We’ll tailor your structure to your goals and handle all the paperwork, legalities, and timelines so you can focus on growing your business.

Want To Discuss Your Structure?

Start with a free consultation. Let’s build a compliant, tax-efficient international setup that works for you.

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