Holding Company as the word suggests is an entity created to hold and not to produce goods or provide services. The entity can hold movable assets (e.g. shares) and immovable assets, tangible (e.g. properties) and intangibles (e.g. patents or trademarks).
Holding Companies are largely used to hold shares of its’ subsidiary companies which may be operating in various geography. The operations are carried out by the subsidiaries independently with its own management team. A Board level oversight may be provided by the Holding company, if required.
The immovable properties and intangible assets may be held either by the Holding Company or by other specially created subsidiaries depending on the requirements.
Advantages of having a Holding Company at the apex in a group structure include:
- Asset Protection
- Shielding of liability of operating entities
- Tax planning
- Raising of finances for group
- Better control over subsidiaries
- Succession Planning and Family Wealth
The selection of location of the Holding Company requires special attention and needs a careful evaluation of various factors which include:
- Purpose of Holding company
- Tax residencies of the UBOs
- Political system and Geopolitics
- Reputation of the location
- Legal system
- Banking and other support services
- Tax regime and Double Taxation Agreements
UAE located in the Middle East, midway between South East and Europe and with its excellent infrastructure support provides an excellent location for creating Holding Company structures. UAE is an ideal gateway to the Middle East and also unrivalled connectivity to Europe, the Indian Subcontinent and the Far East with connectivity to over 150 airports and sea ports spread over six continents.
The UAE Freezones of JAFZA, DIFC, RAKICC and ADGM amongst others offer excellent opportunities for restructuring group structures through a Holding Company structure in UAE.
We at Beta Consultants have considerable experience in advising on Holding Companies and creating such structures having assisted several large businesses from South East Asia, India and Europe to relocate to UAE.
For more information on holding companies and how it can be structured in a group structure, mail to ravichitnis@betaconsultants.ae
BETA CONSULTANTS
Office No. B/410 Al Hudaiba Awards Building Block B, Madinat Dubai Almelaheyah, Dubai P.O. Box 47279, Dubai, UAE Tel No: +971 4 3274105 | Fax: +971 4 3274106 | Email: ravichitnis@betaconsultants.ae | Web:www.betaconsultants.ae
