Optimal jurisdictional placement and structural design for holding entities across UAE, Cyprus, and Switzerland.
The holding company is the structural cornerstone of virtually every sophisticated corporate architecture. Its jurisdictional placement determines the tax treatment of dividend flows, capital gains, and inter-company transactions across the entire group. An optimally placed holding company can significantly reduce aggregate tax burden while providing liability isolation, asset protection, and administrative efficiency.
Polaris designs holding structures that leverage the complementary advantages of our three jurisdictional platforms. UAE holding entities benefit from the extensive and expanding double taxation treaty network and the qualifying free zone person exemption. Cyprus holding companies access the EU Parent-Subsidiary Directive, eliminating withholding taxes on intra-EU dividend flows. Swiss holding structures provide institutional credibility and access to the Swiss treaty network.
The choice between these platforms — and the possibility of multi-tier holding arrangements — depends on the specific characteristics of the operating subsidiaries, the tax residency of ultimate shareholders, the nature of income flows, and the long-term strategic objectives of the group.
Answers drawn from the published rules of the UAE authorities and regulators. Each answer links to its official source. Last reviewed 25 October 2026.
Not where the participation exemption applies. Article 23 of Federal Decree-Law No. 47 of 2022 exempts income from a Participating Interest, meaning an ownership interest of 5 per cent or more in the shares or capital of another company that the holder has held, or intends to hold, for an uninterrupted period of at least 12 months, provided the subsidiary is subject to tax at a rate of not less than 9 per cent, the holder is entitled to at least 5 per cent of profits and liquidation proceeds, and no more than half of the subsidiary's assets are interests that would not themselves qualify. We test each subsidiary against these conditions before placing it under a UAE parent.
Source: Ministry of Finance — Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments (consolidated text) (accessed 24 October 2026)
Yes, where the Participating Interest conditions are still met. Article 23 of Federal Decree-Law No. 47 of 2022 provides that gains or losses on the transfer, sale or other disposition of a Participating Interest are not taken into account in determining taxable income once the 12-month holding period has run, alongside dividends from foreign participations, foreign exchange gains and impairment gains or losses. A disposal within the first 12 months, or of a stake below 5 per cent, falls outside the exemption. We time disposals and structure the holding tier so that the exemption is available when an exit comes.
Source: Ministry of Finance — Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments (consolidated text) (accessed 24 October 2026)
Yes, if it is a Qualifying Free Zone Person earning qualifying income. Article 3 of Federal Decree-Law No. 47 of 2022 sets a 0 per cent rate on the qualifying income of a Qualifying Free Zone Person and 9 per cent otherwise, and Article 18 requires the company to maintain adequate substance in the State and derive qualifying income as defined by Cabinet decision. Ministerial Decision No. 229 of 2025, which repealed Ministerial Decision No. 265 of 2023, lists the holding of shares and other securities for investment purposes as a qualifying activity, with shares deemed held for investment once held for an uninterrupted period of at least 12 months. We set up RAKEZ, DMCC, IFZA and other free zone holding companies and keep the substance file current.
Sources: Ministry of Finance — Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments (consolidated text); Ministry of Finance — Ministerial Decision No. 229 of 2025 Regarding Qualifying Activities and Excluded Activities for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (accessed 24 October 2026)
Yes, within the defined scope. Ministerial Decision No. 229 of 2025 lists headquarter services to related parties, and treasury and financing services to related parties or for the company's own account, as qualifying activities for a Qualifying Free Zone Person. Headquarter services include senior and general management, administrative and procurement services, business planning, risk management and coordination of group activities; treasury services include cash and liquidity management, financing, debt management and centralised payment and collection. Transactions with natural persons are excluded, and the fees must be at arm's length. We draft the intra-group service agreements so the activity is recognisably within the list.
Source: Ministry of Finance — Ministerial Decision No. 229 of 2025 Regarding Qualifying Activities and Excluded Activities for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (accessed 24 October 2026)
Generally no. Ministerial Decision No. 229 of 2025 lists the ownership or exploitation of immovable property as an excluded activity, other than commercial property located in a free zone where the transaction is conducted with a free zone person. Income from residential property anywhere, or from mainland commercial property, is therefore taxed at 9 per cent even in the hands of a Qualifying Free Zone Person. Where a client wants to hold both shares and property, we usually separate them into different vehicles so the property income does not sit inside the company relying on the 0 per cent rate.
Source: Ministry of Finance — Ministerial Decision No. 229 of 2025 Regarding Qualifying Activities and Excluded Activities for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses (accessed 24 October 2026)
The Ministry of Finance states that the UAE has concluded 137 double taxation agreements with most of its major trading partners and, counting bilateral investment treaties as well, 193 agreements in total. The Ministry lists their aims as eliminating double taxation and additional or indirect taxes, preventing fiscal evasion, protecting investments against non-commercial risks such as expropriation, and ensuring the free transfer of profits. Treaty relief on dividends, interest and royalties paid to a UAE holding company depends on the specific treaty and on the company qualifying as a UAE resident under it. We check the relevant treaty before recommending the UAE as the holding jurisdiction for a given subsidiary.
Source: Ministry of Finance — Double Taxation Agreements (DTAs) (accessed 24 October 2026)
Yes, at 95 per cent ownership. Article 40 of Federal Decree-Law No. 47 of 2022 lets a resident parent company apply to the Federal Tax Authority to form a tax group with one or more resident subsidiaries where it owns at least 95 per cent of each subsidiary's share capital, voting rights and entitlement to profits and net assets, and the other conditions of the Article are met. The group is then treated as a single taxable person for filing purposes. Whether to consolidate is a design decision we take with you when the holding structure is set, because it affects loss use, intra-group pricing and the exit of any member.
Source: Ministry of Finance — Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments (consolidated text) (accessed 24 October 2026)
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