Free Zone
Relevant for selected activities, international structuring, visa and administration matters. Licence, activity, qualifying income, substance and documentation are decisive.
UAE Company
Free Zone, Mainland and holding structures should not be formed in isolation.
A UAE company should not be treated as a mere register product. Free Zone, Mainland, holding, SPV or administrative vehicles must fit activity, corporate tax, substance, visas, banking, place of effective management and international tax consequences.
Typical structure questions
Mainland
May be required where local business, customer relationships, personnel or operating presence outside a Free Zone are planned.
Holding / SPV
Relevant where participations, IP, loans, assets or international funds flow need to be organised.
Foundation reference
A company may interact with foundation, succession or governance structures; the tax analysis remains separate.
Before formation
- Which activity will actually be carried out and from which countries will clients, services and income originate?
- Which licence covers the activity and which activities would be excluded or tax-sensitive?
- Who makes decisions, where are contracts negotiated and where is effective management located?
- Which KYC dossier will the bank require and which source-of-wealth or source-of-funds evidence is available?
- Which corporate tax, VAT, UBO, AML, accounting and filing duties will arise?
Corporate Tax and substance
- Free Zone status does not automatically produce a favourable tax position.
- Qualifying income, beneficial recipient, excluded activities, de-minimis points and substance must fit together.
- Contracts, invoices, board minutes, personnel, premises, costs and funds flow should tell the same story.
- For German stakeholders, relocation, foreign tax rules, effective management, permanent establishment and CFC matters should be considered.
Outcome
- Structure comparison of Free Zone, Mainland, holding, SPV or alternative jurisdiction.
- Formation and banking roadmap with documents, sequence and responsibilities.
- Notes on substance, corporate tax, ongoing duties and international follow-up review.
- Documentation framework for banks, tax advisers, local service providers and later reviews.