Jebel Ali Free Zone (JAFZA) offers a strategic platform for establishing a holding company in Dubai. By incorporating a holding company in JAFZA, you can streamline your business operations, optimize tax efficiency, and secure residency visas.
A holding company is a parent company that holds shares of another company. It is not an active business entity. It is just a part or a function of a company. One can reduce their withholding tax and protect the assets of a company by using a holding company in JAFZA.
Benefits of Starting a JAFZA Holding Company
Incorporating a holding company provides you with the following advantages:
Consolidated Tax Benefits
You can enjoy tax advantages by incorporating a holding company. For instance, the government exempts holding companies from income, corporate, and withholding taxes.
Protects your Company’s Assets
Holding company shields your parent company’s assets from any liabilities.
Reduces Risk
By investing in different businesses and holding companies, you can significantly reduce the risk associated with any individual company. The presence of other successful businesses lessens the negative impact on the holding company's overall performance if one operating company experiences hardships.
Enhanced Privacy
You will enjoy enhanced privacy by keeping your information confidential by incorporating a holding company.
Requirements of a JAFZA Holding Company
Before starting a holding company in JAFZA, you need to understand the following essential requirements.
- Holding companies in JAFZA cannot conduct business activities.
- The holding company's purpose is to own and manage other companies that can conduct business activities.
- Holding companies in JAFZA are exempt from taxes.
Types of Holding Companies in JAFZA
There are two types of holding companies, namely:
Offshore - JAFZA offshore companies can hold business entities but cannot perform any operations. Additionally, there is no minimum paid-up share capital requirement for JAFZA companies offshore.
Freezone - A freezone company is not limited to holding businesses and can engage in other business activities. However, JAFZA freezone companies must have a minimum share capital of AED 50,000 and are required to have physical office space.
How Can We Help?
The incorporation process of a JAFZA holding company can become more accessible with the help of a business consultancy like Business Setup Worldwide. We have a team of business consultants who hold years of experience in the same field. We can help you with all the legalities regarding the holding company formation. Whether you want offshore company formation in Dubai or a local setup in a free zone like JAFZA, BSW will make your business seamless and succesfull.
Contact us for more information; we’d be happy to help.
Frequently Asked Questions
No, a holding company in JAFZA cannot conduct business activities. Its primary purpose is to own and manage other companies which can conduct business activities.
Holding companies in JAFZA are exempt from customs duties and value-added tax (VAT) on imports and re-exports.
Yes, a holding company in JAFZA can hold shares in companies outside JAFZA as long as the relevant government authorities approve the investment.
