Start Your Dubai Holding Company or DIFC Foundation Today with Flyingcolour®
Expert Services

Your Solution for Succession Planning and Corporate Taxation

Request a Quote

Please share the details below & let us call you back

100% Privacy Guaranteed

The Dubai International Financial Centre (DIFC) is a globally recognized financial hub, offering an ideal environment for businesses aiming to establish a strong presence in the Middle East, Africa, and South Asia (MEASA) region. Among its many innovative structures, holding companies and foundations have become essential tools for businesses and individuals seeking asset protection, tax efficiency, and effective succession planning. This guide explores the key benefits and uses of these entities in the DIFC.

Why Choose DIFC for Holding Companies and Foundations?

Tax Efficiency

Favorable tax regime with access to double tax treaties and exemptions on capital gains.

DIFC entities benefit from tax exemptions on capital gains and dividends under certain conditions.

Asset Protection

Robust legal frameworks ensure that assets are safeguarded against external risks and liabilities.

Global Recognition

DIFC’s internationally recognized regulations provide credibility and transparency.

Succession Planning

Foundations and holding companies are ideal for transferring wealth and ensuring business continuity.

DIFC Features

Holding Companies in DIFC

A holding company is a non-operational entity designed to own and manage assets, shares, and investments in other businesses. In the DIFC, these companies are commonly referred to as prescribed companies and are tailored for tax-efficient ownership structures.

Key Benefits of DIFC Holding Companies
  • 1 Centralized Asset Management: Consolidate global investments under one entity for streamlined management.
  • 2 Corporate Tax Benefits: Take advantage of exemptions and reduced tax rates through the UAE’s tax treaties.
  • 3 Enhanced Corporate Governance: Holding companies are subject to internationally recognized governance standards, making them suitable for multi-jurisdictional setups.
  • 4 Limited Liability: Protect shareholders from personal liability, as the company’s assets are separate from personal assets.

Uses of Holding Companies

Ownership of intellectual property, real estate, and other investments.

Consolidation of subsidiaries and operational entities.

Simplification of international profit repatriation.

Foundations in DIFC

A DIFC Foundation is a legal entity that combines the benefits of a trust and a corporate structure, particularly suited for succession planning, wealth management, and philanthropic endeavors.

DIFC Foundation

Key Advantages of DIFC Foundations

Succession Planning

Foundations enable seamless intergenerational transfer of wealth without the need for probate.

Asset Separation

Distinguish ownership and control, allowing founders to manage assets while ensuring future distribution aligns with their wishes.

Wealth Preservation

Protection of family assets from external claims and liabilities

Philanthropy

Establish charitable initiatives and manage them effectively through a foundation

Uses of Foundations

Managing Family Businesses
Holding global assets, including real estate, stocks, and intellectual property.
Protecting assets from legal and financial risks.
Facilitating charitable activities.

Taxation in DIFC: Recent Updates

With the introduction of a 9% corporate tax in the UAE from June 2023, businesses have had to adapt their strategies for tax efficiency. DIFC remains a highly attractive jurisdiction due to its favorable tax policies for holding companies and foundations.

Key Tax Benefits

1

Tax Exemptions

Dividend and capital gains tax exemptions for qualifying holding companies and foundations.

2

Transparency and Compliance

Clear and predictable tax regulations, aligned with international standards.

3

Double Tax Treaties

Access to a wide network of treaties, reducing tax liabilities on international transactions.

Corporate Tax Clarifications

As per Ministerial Decision No. (261) of 2024, holding companies structured for asset management and owned by foundations may qualify for tax transparency or exemptions if:

They hold non-commercial assets such as real estate or shares.
They are established for the benefit of natural persons.
They engage in no active commercial activities.

No Inheritance Tax in the UAE

The absence of inheritance tax is a significant advantage for families establishing foundations or holding companies in the DIFC. This allows for:

Cost-effective wealth transfer across generations.
Protection of family businesses and assets from additional tax burdens.
Inheritance Tax Benefits

How to Set Up a Holding Company or Foundation in DIFC

Steps for Holding Companies

1
Define the purpose and scope of the holding company.
2
Prepare the required documentation (founder details, Articles of Association, etc.).
3
Register with the DIFC Registrar of Companies.
4
Obtain a Certificate of Incorporation.

Steps for Foundations

1
Draft the charter and by-laws.
2
Appoint council members and guardians (optional).
3
Submit the application to DIFC authorities.
4
Receive the foundation's registration certificate.

Why Choose Flying Colour for DIFC Structures?

At Flying Colour Business Setup Services, we specialize in helping businesses and families establish holding companies and foundations in the DIFC.

18,000+

World Wide Clients

20+

Years Experience (since 2004)

2900+

4.9★ Google Reviews

175+

Strong Team of Professionals