Lead Story

As family-owned businesses look to expand into Asia, they must consider several issues, including the structure of their holding companies, subsidiaries and joint ventures, as well as ownership arrangements and succession planning. These decisions can determine whether international expansion creates lasting commercial value.

A family business based in the UAE may have spent many years building a strong reputation, customer base and financial position in the Gulf. Asia offers considerable opportunities for growth, with access to larger markets, manufacturing facilities, technology and investment. However, establishing a presence in a new jurisdiction requires careful planning. The structure chosen can affect taxation, legal obligations, business financing, intellectual property protection and the extent of liability exposure.

Many UAE family businesses face important decisions about the corporate structure best suited to their international expansion. Should they establish branches, incorporate new subsidiaries or create a regional or international holding company? The answer will depend on the group's existing structure, the countries it intends to enter, the nature of its activities and the level of involvement the family wishes to retain.

A trading organisation entering a single Asian market may require a relatively straightforward structure. However, a business planning multiple acquisitions, manufacturing operations or joint ventures across several countries will need a more carefully designed corporate arrangement.

The UAE Ownership Structure

The first step is to examine the existing structure of the UAE business. Many family enterprises have developed complex arrangements involving companies established both within and outside free zones, alongside separate investment vehicles. Over time, several layers of ownership may have emerged.

Before investing capital internationally, the family should establish which entity owns the core business, who holds the shares, where intellectual property and other valuable assets are registered, and whether existing debt arrangements or contractual obligations restrict the transfer of ownership. Shareholder agreements, constitutional documents, guarantees and financing covenants should also be reviewed.

A holding company can be established in the UAE to provide a central platform for investments across multiple jurisdictions. Rather than having the core operating business acquire overseas businesses directly, the group may establish a holding company that owns shares in its operating subsidiaries. This can help create a clearer distinction between the family's investment interests and the liabilities of individual businesses.

The UAE offers different corporate structures, including limited liability companies and private joint-stock companies. The appropriate choice will depend on ownership arrangements, governance requirements and capital needs. Free-zone and financial free-zone structures may also be relevant. However, a financial free-zone entity should not be treated as interchangeable with an ordinary commercial company, as each operates within a distinct legal and regulatory framework.

It is also important to establish whether the proposed holding company will have genuine commercial substance. An entity with little operational or management activity may encounter difficulties when seeking to benefit from tax treaties or demonstrate the commercial rationale for its international arrangements.

Holding Company

A holding company is often an attractive option for UAE family businesses planning to enter several Asian markets. It can own separate subsidiaries in the countries where the group intends to operate. Each subsidiary can enter into local contracts, employ staff, obtain licences, hold permitted assets and maintain its own accounts.

This arrangement can help contain commercial risks. If a manufacturing subsidiary experiences financial difficulties, its liabilities will generally remain within that legal entity. However, guarantees, insolvency rules and circumstances in which a court may disregard the separation between companies can affect this position. The holding company and other subsidiaries are not automatically liable for the obligations of an individual subsidiary.

Limited liability is not absolute. Parent-company guarantees, intercompany loans, shared decision-making, inadequate capitalisation and transactions that prejudice creditors can all create complications. In some jurisdictions, directors may also incur personal liability for breaches of their duties or obligations arising from insolvency.

The group should also decide whether to invest directly or establish an intermediate holding company. For a single investment, direct ownership may be simpler and less expensive. However, an intermediate holding company may be justified where the family expects to make several investments, introduce regional partners, raise capital or reorganise ownership in the future. This additional layer will bring incorporation costs, annual filing obligations, accounting requirements, tax considerations and substance requirements.

Any additional corporate layer should have a clear commercial rationale.

Selecting a Jurisdiction in Asia

Asia comprises countries with significantly different commercial and regulatory environments. Although Singapore, India, Hong Kong, Malaysia, Thailand and Indonesia offer opportunities for international investment, their company laws, foreign investment restrictions, taxation systems and rules governing capital movements vary considerably. The group should understand these differences before deciding where and how to establish its operations.

Singapore is often considered by international groups seeking to establish a regional headquarters or investment platform. A foreign parent company can incorporate a local subsidiary, which will have a separate legal identity. Alternatively, it can register a branch, although this remains an extension of the parent company and does not provide the same separation of liability. Singapore's Accounting and Corporate Regulatory Authority provides guidance on the differences between these structures. Representative offices have a more limited role.

A holding company may also be established in Singapore to act as a regional investment platform for Southeast Asia. However, incorporation in Singapore does not automatically establish tax residency or guarantee favourable treatment of income earned elsewhere. The location of management, decision-making, commercial activities and applicable tax rules will all be relevant.

India offers considerable opportunities because of its large domestic market. Family businesses may consider investments in manufacturing, infrastructure, technology, retail, logistics and professional services. Foreign investment is permitted in several sectors, although the applicable conditions depend on the nature of the activity, ownership arrangements and regulatory restrictions. While some sectors allow substantial or complete foreign ownership, others are subject to foreign investment caps, licensing requirements or additional scrutiny.

A UAE parent company may establish a subsidiary in India, acquire a stake in an existing business or enter into a joint venture with an Indian partner. The appropriate route will depend on the sector and the level of control required. Foreign investment reporting, exchange-control requirements, share transaction pricing and restrictions on repatriation and certain financial arrangements must also be examined.

Hong Kong may be considered by groups seeking access to international financial markets, regional trading networks and business opportunities involving mainland China and other Asian economies. Its territorial profits tax system distinguishes between profits arising in or derived from Hong Kong and those sourced elsewhere. However, incorporation in Hong Kong does not automatically establish that profits qualify for offshore treatment. The actual operations and activities generating the income remain important.

A jurisdiction with an attractive banking infrastructure or tax regime may not necessarily be the best location for manufacturing, employing staff or holding operational assets. The group should distinguish between the location of its holding company and the jurisdictions in which its actual business activities take place.

Joint Ventures

In some Asian markets, a local partner can provide valuable commercial advantages. Building relationships with suppliers, distributors, regulators and customers can take considerable time. A joint venture may offer access to established local networks while reducing the initial investment and allowing the UAE family business to share commercial risks.

The legal structure of the joint venture requires careful consideration. The percentage of shares held by an investor does not necessarily determine the level of control it exercises over the business. Board appointment rights, reserved matters, voting requirements, access to information, management appointments and restrictions on share transfers can be equally important.

A shareholders' agreement should clearly establish which major decisions require unanimous consent, how additional funding will be provided and how disagreements between partners will be resolved. Exit rights, deadlock mechanisms, pre-emption rights and tag-along and drag-along provisions should also be addressed.

Family businesses should be particularly cautious about relying on informal agreements or personal relationships with local partners. Arrangements that work while the original founders remain actively involved may become difficult when the next generation assumes responsibility. The agreement should provide a workable framework that remains effective even after changes in ownership or management.

Taxation Considerations

Tax planning is an important element of international expansion. If a UAE holding company receives dividends or capital gains from an Asian subsidiary, it may qualify for the participation exemption under the UAE Corporate Tax Law, provided the statutory conditions are met.

Generally, the participation must involve at least 5% ownership and be held for a minimum period of 12 months. Other requirements also apply, including conditions relating to the nature of the subsidiary and the relevant tax treatment. The group should assess these requirements before relying on the exemption.

Withholding taxes on dividends, interest and royalties must also be examined in the countries where the subsidiaries operate. Double taxation agreements may provide relief, but this will depend on the applicable treaty provisions, beneficial ownership requirements and anti-abuse rules. The existence of a tax treaty between the UAE and an Asian jurisdiction does not automatically guarantee favourable treatment for all payments between group companies.

Intercompany transactions require particular attention. Management fees, technical service charges, royalty payments, financing arrangements and the supply of goods between related companies should reflect the functions performed, assets employed and risks assumed by each entity. Transfer pricing rules apply to related-party and connected-person transactions involving both foreign and domestic entities.

Inadequate documentation may result in adjustments to taxable income, disputes with tax authorities and financial penalties. The group should maintain appropriate agreements, supporting calculations and evidence that related-party pricing complies with the arm's-length principle. It should also examine whether its proposed structure could create a permanent establishment or tax-residency exposure in another country.

Cash Flow Considerations

The movement of funds between the UAE and Asian jurisdictions also requires attention. Equity investments, shareholder loans, dividend distributions and intercompany financing may be subject to local exchange-control rules and reporting requirements. These obligations should be factored into the group's financing arrangements from the outset.

Protecting Intellectual Property

For family businesses expanding through technology, manufacturing, franchising or distribution, intellectual property may represent one of the group's most valuable assets. Trademarks, patents, software, designs, proprietary processes and commercial know-how should be identified and appropriately protected before overseas operations begin.

The group may retain ownership of its key intellectual property in a designated entity and grant licences to operating subsidiaries. This can help maintain consistency across different markets. However, the arrangement should reflect genuine commercial activities and comply with local intellectual property, taxation and transfer pricing requirements.

Trademark protection is particularly important. Registration in the UAE does not automatically provide protection in India, Singapore or other Asian jurisdictions. The group should identify the countries in which its brands will be used and secure the necessary local registrations. Licensing agreements should also address quality control, permitted use, confidentiality, infringement and termination.

Data protection and technology regulations require similar attention. Where customer, employee or financial information is transferred between UAE and Asian subsidiaries, the group must examine the applicable data protection laws, cross-border transfer restrictions and cybersecurity requirements in each jurisdiction.

Family Governance and Succession

International expansion can introduce additional complexities into family governance. A business previously controlled by a small group of family members may eventually have shareholders living in different countries. Some may participate actively in management, while others may be interested primarily in their investment returns.

Ownership and management responsibilities should be clearly separated. A family council, board of directors and professional management team can help prevent commercial decisions from becoming entangled in family disagreements.

A family constitution can establish the principles governing family participation in the business. These may include the appointment of family members to senior positions, dividend policies and the transfer of shares between generations. Although it does not replace legally enforceable corporate documents, it can provide a framework for managing disagreements and maintaining continuity.

Succession planning should also be addressed at the holding-company level. The death or incapacity of a founder may affect ownership and decision-making across several jurisdictions. Wills, trusts, foundations and shareholder agreements may form part of the arrangements, but their effectiveness must be assessed against the applicable inheritance, matrimonial property and company laws.

For UAE-based families, the distinction between personally owned and corporate assets is particularly important. The family should establish who legally owns the shares and investments, which inheritance regime applies and how control can pass to the next generation without disrupting business operations.

Dispute Resolution

An international group should establish in advance how commercial disputes will be resolved. Contracts involving overseas subsidiaries, joint-venture partners, distributors, suppliers and financiers should clearly specify the governing law and the mechanism for resolving disputes.

International arbitration may be suitable for cross-border commercial agreements, particularly where the parties require a neutral forum. However, it may not be the most appropriate option for every transaction. Certain corporate, employment, insolvency, regulatory and property matters may fall within the exclusive jurisdiction of local courts.

The enforceability of court judgments and arbitral awards, the availability of interim relief and the location of the parties' assets should all influence the choice of dispute-resolution mechanism. A contractual dispute clause may prove commercially ineffective if a judgment or award cannot be enforced in the jurisdiction where the counterparty holds its assets.

The group should also establish internal procedures for managing regulatory and operational risks. These should cover financial reporting, anti-bribery controls, sanctions screening and third-party due diligence. Although individual subsidiaries may face different local requirements, the holding company should maintain an effective group-wide compliance and oversight framework.

Best Structure for Long-Term Expansion

The most suitable structure for a UAE family business expanding into Asia cannot be determined by a single tax advantage or the cost of incorporating a company. It should reflect the group's commercial objectives, ownership arrangements, financing requirements and long-term plans for family wealth.

For a business entering a single Asian market, a directly owned subsidiary may be sufficient. However, a group planning multiple acquisitions or operations across several countries may benefit from a UAE holding company with separately incorporated overseas subsidiaries. A regional holding company may also be justified where it performs genuine investment, financing or management functions. Joint ventures can provide access to local expertise, provided ownership arrangements and exit mechanisms are properly documented.

The legal and regulatory requirements of each target country must be assessed, including foreign investment restrictions, taxation, exchange controls and corporate governance obligations. The group should also consider the financial and administrative costs of maintaining multiple entities across different jurisdictions.

Ultimately, international expansion should not move faster than the family's ability to manage its investments. A well-designed structure can help separate operational risks, protect valuable assets, attract external investment and ensure business continuity when ownership passes to the next generation. A poorly designed arrangement, by contrast, can result in overlapping liabilities, tax disputes, shareholder deadlocks and costly restructuring.

For UAE family businesses looking towards Asia, the more important question is not simply where to incorporate the next company. It is how to build a group capable of operating across different jurisdictions while maintaining clear ownership, effective commercial control and the long-term protection of family wealth.

A holding company can make a significant difference to international groups looking to expand across borders. The structure can influence how investments are managed, how intangible assets are owned, how profits are repatriated, how acquisitions are financed and, ultimately, how a business is transferred to the next generation or new investors.

Singapore is one of the most preferred locations in Asia because of its strong corporate laws, financial services sector, political and regulatory stability, international connectivity and favourable tax environment. With many companies operating across Asia, the Middle East, Europe and other emerging markets, Singapore is increasingly being considered as a hub from which to manage international business interests.

A holding company may not conduct active business operations. Its primary purpose may simply be to hold shares in subsidiaries, own strategic investments or intellectual property, or facilitate financing within the group. However, to obtain the intended benefits, the legal and commercial aspects of the structure need to be carefully considered.

Central Holding Company

An international group may have several companies incorporated in different jurisdictions. Without a central holding company, shareholders may have multiple ownership interests and corporate relationships to manage.

A holding company can provide a central structure for share ownership. Establishing an entity in Singapore allows the ultimate shareholders to consolidate their interests through a single corporate vehicle.

For example, if a group has several subsidiaries in the UAE, India, Malaysia and Indonesia, the investments could be placed under a holding company incorporated in Singapore. Each subsidiary would remain a separate legal entity and continue to be governed by the laws of its country of incorporation. The holding company would oversee the group's investment strategy and major ownership decisions.

Having a holding company can bring greater clarity to the ownership structure, make it easier to bring in new investors and simplify acquisitions, disposals and corporate restructurings. It can also help separate investment ownership from the operational risks associated with individual businesses.

However, this does not remove the legal obligations of the underlying companies. All subsidiaries remain subject to their respective company, employment, licensing, tax and regulatory requirements.

Legal Entity and Asset Protection

One of the main reasons for establishing a holding company is to achieve separation of legal ownership. Under the Companies Act 1967, companies have a legal personality distinct from their shareholders. They can own property, enter into contracts, borrow money, and sue or be sued in their own names.

If structured correctly, this separation can provide a degree of protection. Where a subsidiary incurs liabilities through its normal business operations, those liabilities do not automatically pass to its parent or sister companies.

For example, if a construction subsidiary faces liabilities arising from contractual obligations, commercial disputes or creditor claims, other companies owned by the holding company do not automatically become responsible for those liabilities.

There are, however, limitations to this protection. Where fraudulent activities, improper asset transfers, sham arrangements, personal guarantees or misuse of corporate entities are involved, courts and regulators may examine the circumstances. Parent companies may also assume direct responsibility through guarantees, contractual obligations or their own actions.

Ultimately, effective asset protection requires genuine separation between the entities. A holding company should not be viewed as a mechanism for moving assets beyond the legitimate reach of creditors.

Tax Environment and Dividend Repatriation

Singapore has an attractive tax environment. The corporate income tax rate is 17%, although qualifying businesses may benefit from partial tax exemptions and various tax incentives. There is no separate, dedicated holding company tax regime. Instead, Singapore's general tax framework, foreign-sourced income exemptions, tax treaties and regulatory stability contribute to its popularity.

One important feature is the exemption available for certain foreign-sourced income received in Singapore.

Under Section 13(8) of the Income Tax Act 1947, a Singapore tax-resident company may receive specified categories of foreign-sourced income tax-free, subject to statutory conditions. These include foreign dividends, foreign branch profits and certain foreign-sourced service income.

There are several requirements to qualify for the exemption. Under Section 13(9), the income must have been subject to tax in the foreign jurisdiction, the highest corporate income tax rate in that jurisdiction must be at least 15% when the income is received in Singapore, and the Comptroller of Income Tax must be satisfied that granting the exemption is beneficial to the Singapore-resident company.

This is an important consideration for groups looking to repatriate profits from overseas subsidiaries. The tax residence of the holding company, the nature of the income, the subsidiary's tax position and the applicable statutory requirements must all be examined.

Singapore also operates a one-tier corporate tax system. Dividends paid by Singapore-resident companies are generally exempt from further Singapore tax in the hands of shareholders. This can facilitate the movement of profits through the group without an additional layer of domestic dividend taxation.

However, foreign withholding taxes, the laws of the subsidiary's jurisdiction and the tax residence of the ultimate shareholders may still affect the amount that can be distributed.

Double Taxation Agreements

Another reason Singapore is a popular international holding location is its extensive network of Avoidance of Double Taxation Agreements. These agreements are designed to prevent the same income from being taxed twice and to allocate taxing rights between the countries concerned.

Depending on the relevant agreement, a Singapore-resident company receiving dividends, interest or royalties from an overseas subsidiary may qualify for reduced withholding tax rates. This can be particularly beneficial for international groups with investments across several jurisdictions.

The holding company may receive dividends from operating subsidiaries and, where commercially appropriate, provide funding to other businesses within the group.

However, access to treaty benefits is not automatic. Companies will generally need to demonstrate that they are tax-resident in Singapore and satisfy the relevant conditions under the applicable agreement. IRAS generally considers whether control and management are exercised in Singapore. The location of board meetings and the decisions made by directors are among the relevant considerations.

In the case of foreign-owned investment holding companies, IRAS notes that those earning only passive or foreign-sourced income may generally not be regarded as Singapore tax-resident if they merely follow instructions from overseas shareholders.

To establish tax residence, the company must demonstrate that its board exercises genuine control over its affairs. Board meetings should involve substantive discussions about investment opportunities, financial commitments, acquisitions and risk management. Directors should make decisions based on the information available to them rather than simply approving instructions received from overseas.

Depending on the company's activities, appropriate staffing, expenditure, office facilities and administrative resources may also be necessary. There is no single substance requirement that applies to every holding company. However, the company must have arrangements that support the functions it claims to perform.

Good governance is equally important. This includes maintaining proper statutory registers, accounting records, filing annual returns, preparing financial statements where applicable and complying with beneficial ownership disclosure requirements.

Funding Subsidiaries

A holding company can also serve as the central financing vehicle for an international group. The parent company can coordinate funding requirements rather than requiring each subsidiary to approach lenders independently.

The parent company may raise equity, borrow from banks, provide shareholder loans or arrange other forms of financing. This will depend on the company's legal powers and any applicable regulatory requirements. The funds can then be advanced to subsidiaries to finance acquisitions, infrastructure projects, working capital or business expansion.

A central funding arrangement can provide greater visibility over group debt, reduce duplication and help management assess the financial performance of different businesses. It can also offer a more structured approach to bringing in external investors or lenders.

Loans to related parties should be properly documented and priced on an arm's-length basis. Singapore's transfer pricing rules require related-party transactions to reflect the conditions that independent parties would have agreed under comparable circumstances. Supporting documentation may also be required.

Interest deductibility, withholding tax, debt-equity considerations and restrictions imposed by the subsidiary's jurisdiction must also be examined. A financing arrangement that appears efficient at the holding company level may create unexpected tax or regulatory issues elsewhere in the group.

Intangible Assets

If a business relies on technology, trademarks, patents, software, proprietary processes or other intangible assets, a holding company may be used to own these valuable assets.

Centralising ownership can help manage licensing arrangements, brand protection and the commercial exploitation of intellectual property. Operating subsidiaries may obtain rights to use these assets through licensing agreements, with payments determined by the commercial arrangements and applicable transfer pricing rules.

Singapore has a well-established intellectual property protection framework and is an important business hub in the region.

However, the fact that intangible assets are owned by a Singapore company does not automatically mean that the resulting profits will be taxed there. Tax authorities increasingly examine which entities perform and control the functions involved in developing, enhancing, maintaining, protecting and exploiting intellectual property.

A company claiming income from the ownership of intangible assets must be able to demonstrate the commercial basis for its role. Artificially transferring valuable intellectual property to a holding company, without transferring the relevant functions, risks and decision-making responsibilities, can lead to challenges under local tax and transfer pricing rules.

Acquisitions and Succession Planning

Establishing a holding company in Singapore can also offer practical advantages when a group plans to acquire another business, sell an existing subsidiary or bring in a strategic investor.

Instead of changing the ultimate shareholders' interests in several operating companies, investors may purchase shares in the holding company or in a particular subsidiary. The appropriate approach will depend on the transaction, regulatory approvals, tax implications and the rights of existing shareholders.

For family-owned international businesses, a holding company can form part of a long-term succession plan. Shares may be transferred through sales or family arrangements, subject to the applicable inheritance, tax and company laws.

A holding company does not replace the need for a properly prepared succession plan, shareholder agreement or estate-planning arrangements. However, it can provide a central ownership structure within which these arrangements can be implemented.

Reasons to Choose Singapore

Singapore offers a stable business environment supported by strong legal protections, financial infrastructure, international tax relationships and an established corporate services sector. However, groups should carefully consider what they intend to achieve before incorporating a holding company in Singapore.

Important considerations include where strategic decisions will be made, how subsidiaries will be financed, where intellectual property functions will be performed, how dividends will be repatriated and what regulatory requirements apply in each jurisdiction.

International groups must also consider changes in global tax standards. The OECD's Pillar Two framework introduces a 15% global minimum effective tax rate for multinational groups within its scope. Businesses should examine how Singapore's tax incentives interact with these rules and how the tax position of individual subsidiaries may be affected.

A holding company that exists only on paper will provide little protection. However, with competent directors, properly documented decisions, genuine business functions and effective compliance procedures, the structure will be on much stronger legal and commercial footing.

Ultimately, Singapore can provide a credible platform for international businesses seeking to own, finance and manage investments across multiple jurisdictions. Its effectiveness will not depend simply on the address appearing on the incorporation certificate, but on the quality of the legal, financial and governance arrangements supporting the structure.

Choosing whether to hold family wealth in a trust or a holding company can be one of the most important decisions in long-term wealth planning. Both structures can help families organise their assets, manage investments and plan for succession. However, it is essential to understand what each structure offers legally and how well it aligns with the family's ultimate objectives.

For families that own businesses, property and investments, or have assets spread across multiple jurisdictions, this can become a significant consideration. A structure that works well for a family-owned business may not necessarily be the best option for protecting wealth and providing for multiple generations. In some circumstances, using both structures together can be more effective.

Ultimately, the choice will depend on the family's objectives, the jurisdictions involved and the legal implications of transferring ownership.

Key Differences

A holding company is a legal entity established to hold shares in other companies, investments, property or other assets. It has its own legal identity. Assets registered in the company's name belong to the company, while shareholders own shares in that entity.

The underlying property does not ordinarily belong directly to the shareholders. Instead, as a shareholder, you have certain rights attached to your shares, such as voting rights and entitlement to receive dividends, depending on the company's constitutional documents and applicable law.

A trust, by contrast, is generally a legal relationship under which assets are transferred to a trustee for the benefit of beneficiaries or for a specific purpose. The trustee holds legal title to the trust property, while beneficiaries may have equitable or beneficial interests, depending on the governing law and the terms of the trust.

A traditional trust is not necessarily a separate legal entity. Its legal status will depend on the governing law.

Ownership

One of the most common misconceptions is that transferring assets into a trust or holding company automatically removes them from the original owner's control and protects them against future claims.

A holding company will generally provide greater direct control over business and investment activities, as the founder can remain a shareholder, exercise voting rights and, subject to the applicable arrangements, appoint directors. Different classes of shares can also be created, where permitted, to provide economic interests without corresponding voting rights.

For example, a family may establish a holding company to own shares in several businesses. The founder may retain voting rights, while the economic interests can be distributed among children or other family members. This can provide a framework for managing the group while separating ownership interests from day-to-day management.

With a trust, the trustee manages the assets in accordance with the trust deed and governing law. The settlor may reserve certain powers, appoint a protector or establish mechanisms for overseeing investments. The extent to which such arrangements are permitted will depend on the jurisdiction.

Attempting to retain extensive control over trust assets can create legal complications. If the settlor remains heavily involved in managing the assets, questions may arise about the genuine separation of ownership and control. Courts may examine the actual circumstances rather than relying solely on the terms of the trust deed.

Families should therefore distinguish between retaining some influence over their assets and transferring genuine legal ownership and management responsibilities to the appropriate parties.

Succession

Succession is often where the practical differences between the two structures become most apparent.

If family assets are held personally, the owner's death or incapacity may trigger inheritance procedures, probate requirements and disputes among heirs. Where property, company shares and financial investments are spread across different jurisdictions, the process can become considerably more complicated.

A holding company can provide a relatively straightforward structure for managing ownership of family assets. Multiple investments and business interests can be held through a single corporate entity. On succession, the transfer of shares in the holding company may be sufficient to change ownership of the underlying corporate interests. This can simplify administration, although it does not necessarily avoid inheritance taxes, probate requirements or mandatory succession rules.

Shareholder agreements, articles of association and family governance arrangements can establish procedures for transferring shares, restricting external ownership, allocating decision-making powers and resolving disputes. They can also provide a framework for dealing with a shareholder's death, incapacity or decision to exit the family business.

A trust can provide a longer-term succession planning mechanism. The settlor can establish provisions for distributing income or capital to beneficiaries when they reach certain ages, upon specific events or according to their needs. Where a discretionary trust is established, the trustees will have the authority to decide when and how distributions are made, within the limits of the trust deed.

This can be particularly useful where beneficiaries are young or have limited experience in managing wealth. It can also help reduce the risk of fragmentation of a family business into numerous smaller ownership interests.

However, the trust must be properly structured and funded. Simply executing a trust deed does not transfer ownership of assets. Shares, property and other assets must be transferred in accordance with the relevant legal procedures.

Protection

Asset protection is often regarded as a major reason for establishing trusts and holding companies. However, neither structure offers absolute protection against creditors, litigation or regulatory action.

A holding company provides legal separation between the company and its shareholders. Assets registered in the company's name generally belong to the company rather than to individual shareholders. This can help separate business activities and investment risks.

However, there are limitations. Where a shareholder has personal debts, creditors may be able to pursue the shares held by that individual. Directors and shareholders may also face personal liability in certain circumstances, including where they have provided personal guarantees or engaged in fraud, wrongful conduct or other statutory breaches. Courts may also pierce the corporate veil in exceptional circumstances where the legal requirements for doing so are satisfied.

A trust can provide a different level of separation between the settlor and the trust property. If properly established, it may make it more difficult for the settlor's personal creditors to claim the trust assets. This will depend, among other things, on whether the transfer was genuine and completed before the settlor encountered financial difficulties.

However, transfers made to avoid existing or anticipated creditors may be challenged under insolvency, fraudulent transfer or similar legislation. Courts may examine whether the arrangement was genuine or a sham, and whether the settlor retained control over the assets.

The timing and substance of the arrangement are also important. A trust or holding company should not be regarded as a means of concealing assets, avoiding legitimate liabilities or defeating existing claims.

Taxation

Tax treatment can be an important consideration, particularly where a family has international investments. However, it is not necessarily the case that trusts are more tax-efficient than companies or that holding companies will always attract a higher tax burden.

A holding company can be established as a central entity to receive dividends, hold investments and provide funding to subsidiaries. Tax treaties, participation exemptions, withholding tax rules and controlled foreign company provisions may all influence the overall tax position, depending on the jurisdictions involved.

The company's place of incorporation may not be the only relevant consideration. Tax authorities may examine where key business decisions are made, where directors perform their functions and where the company is effectively managed. Even if a company is incorporated in a low-tax jurisdiction, it may still have tax obligations elsewhere if its management, operations or income create a sufficient connection with another jurisdiction.

The taxation of trusts will depend on the applicable local law. Discretionary and fixed trusts, revocable and irrevocable trusts, and resident and non-resident trusts may all receive different tax treatment. The tax connections of the settlor, trustee and beneficiaries may also influence the position.

Cross-border arrangements introduce additional considerations, including reporting requirements, beneficial ownership disclosures, exchange of financial information and anti-avoidance rules. A structure recognised in one jurisdiction may not necessarily receive the same treatment in another.

For families investing through the UAE, several options may be available. Corporate structures, foundations and trust arrangements are recognised in certain financial free zones. The choice requires careful consideration of the legislation governing the relevant jurisdiction, the location and nature of the assets, and the tax and succession implications in the countries where family members reside.

Governance

Alongside choosing the legal structure, families need to establish rules governing how decisions are made, disputes are resolved and the next generation becomes involved.

A holding company can provide a familiar corporate governance framework. Directors manage the company's affairs, while shareholders exercise their rights in accordance with company law and the constitutional documents. Shareholder agreements and family constitutions can provide additional guidance on family members' involvement in the business, employment arrangements, dividend distributions and transfers of ownership.

In a trust, greater emphasis is placed on the duties of the trustee. The trustee must manage the trust in accordance with its terms and applicable fiduciary duties. Depending on the structure, protectors, investment advisers or other individuals may also be appointed to perform specific oversight functions.

Careful consideration should be given to the appointment of the trustee. The trustee should have the necessary expertise, independence, regulatory standing and ability to manage assets across international jurisdictions. Problems with the trust deed or an unclear allocation of responsibilities can lead to disputes over investment decisions and distributions.

Communication between family members remains equally important. Even where a succession plan is legally sound, a lack of understanding among beneficiaries about their rights and the purpose of the arrangement can create disagreements.

Combined Structure

In many cases, a combined structure may be more practical for families with substantial estates.

A family trust could hold the shares in a holding company, while the holding company owns operating businesses, property interests and investment subsidiaries. This can provide a clear framework for managing family wealth. The trustee would administer the trust in accordance with its terms, while the holding company's directors would manage the company's affairs.

For example, a founder may want to ensure that the family business continues to be professionally managed while providing financial benefits for children and future generations. The trust could hold the shares in the holding company, which would in turn own the operating subsidiaries. Distribution provisions could provide for the beneficiaries without requiring them to become directors or participate in the management of the business.

Such an arrangement requires careful drafting to avoid conflicts between the trust deed, shareholder agreements and constitutional documents. The trustee's powers, voting arrangements, distribution provisions and succession mechanisms should all operate consistently.

Choosing the Right Structure For the Future

The starting point should be a clear understanding of the family's objectives. If the intention is to consolidate investments, establish subsidiaries and retain direct corporate control, a holding company may be the more suitable option.

If the priority is long-term succession planning, separating asset ownership from the interests of beneficiaries and providing for distributions across generations, a trust may offer greater flexibility. Where both objectives are important, a combined structure may be worth considering.

Families should also examine the legal status of their assets, existing shareholder rights, inheritance restrictions, exposure to creditors and regulatory requirements in each relevant jurisdiction. Property, private company shares and financial investments may all involve different procedures and requirements for transferring ownership.

Ultimately, the effectiveness of a wealth structure cannot be measured simply by the value of the assets it holds or the jurisdiction in which it is established. It should reflect the family's intentions, comply with applicable laws and provide a practical framework for managing wealth over time.

A structure designed solely around the founder's interests may not necessarily serve the next generation equally well. Long-term planning requires a coherent framework for ownership, control, accountability and succession that can remain effective beyond the individuals who originally created the wealth.

The UAE is becoming a popular choice for global businesses looking to establish corporate structures that provide a base for investing in multiple countries.

For example, a business established in Dubai or Abu Dhabi could have manufacturing operations in India, joint ventures in Saudi Arabia, shareholdings in a logistics company in Africa and investments in other projects across the Middle East. Having a corporate structure in the UAE provides a central point for ownership, funding and control.

This is particularly useful for family businesses, private investors, multinational corporations, private equity firms and entrepreneurs. The UAE has several advantages for investment, including a strong financial framework, international connections, established corporate laws and a network of bilateral agreements.

However, what is important is ensuring that your corporate structure is designed to accommodate different legal systems. This can help protect your assets and facilitate the movement of funds without creating unnecessary legal or regulatory complications.

Selecting the Right Corporate Structure

There are several corporate investment structures available in the UAE. These include:

Holding Company

This is often used by groups with interests in multiple countries. A holding company owns shares in subsidiary companies or other businesses. It receives dividends and manages investments within the group. This can help with succession planning, changes in ownership and the sale of individual businesses.

If you have operations in multiple countries, a holding company can help separate ownership from the activities of your subsidiaries. If there is an issue in one of your operating businesses, it will not necessarily affect your other businesses, provided they are kept legally and financially separate. However, guarantees and other agreements can affect the extent of this protection.

Special Purpose Vehicles (SPVs)

These are generally established to hold a specific asset, investment, project or financing arrangement. An investor may wish to acquire a commercial property and hold it through an SPV. These vehicles can also be used for joint ventures, acquisitions and project financing.

The key benefit is risk segregation. Ownership, obligations and funding can be kept within a single legal structure. This makes it easier to identify the assets and liabilities associated with a particular transaction. An SPV does not automatically protect you from liability. Guarantees, cross-collateralisation and a failure to keep funds separate can affect the level of protection available.

Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) have their own structures for this purpose. ADGM SPVs are passive holding vehicles used to separate financial and legal risks. They cannot be used to conduct ordinary operational activities or employ people.

ADGM removed its previous UAE and GCC nexus requirement for SPVs in September 2026, allowing international investors to establish these vehicles without demonstrating the former regional connection. However, non-exempt SPVs must still appoint an ADGM-licensed Company Service Provider to manage incorporation and ongoing statutory requirements.

DIFC also updated its Prescribed Company regime, opening up the structure to a wider range of applicants. The revised regulations came into force on July 24, 2026, removing the previous eligibility requirements. Most companies using this structure will need to appoint a DIFC-licensed Corporate Services Provider to manage their administration, although exemptions apply. Prescribed Companies are passive holding vehicles rather than operating businesses.

These developments give investors greater flexibility, but they will need to consider their investment objectives, governance requirements, ownership arrangements and costs when choosing between ADGM, DIFC and other jurisdictions in the UAE.

Regional Subsidiaries

Once you have decided on your parent or holding company, you will need to consider how you intend to establish an interest in individual countries.

Setting up subsidiaries can be a good option if you want to operate in another country, employ people, enter into commercial agreements and obtain local licences. This creates a separate legal entity in the country of incorporation while allowing the UAE parent company to retain ownership.

This can be particularly useful if you are looking to expand into GCC countries. Your UAE parent company may have separate subsidiaries in Saudi Arabia, Oman or Bahrain. Each will operate under the licensing, employment, tax and commercial regulations of the country in which it is established.

The same approach can be adopted when investing in Africa or South Asia. However, some countries impose restrictions on foreign ownership in certain sectors, require local participation or demand additional approvals from foreign investors. Some also have regulations governing the repatriation of dividends, interest, royalties and sale proceeds.

India has specific regulations governing foreign direct investment. These include sectoral limits, government approval requirements for certain activities and reporting obligations under its foreign exchange regulations. Having a holding company in the UAE does not remove these requirements. You will need to ensure that your investment is structured in accordance with the regulations governing the Indian entity and the movement of funds.

There has also been a significant change to India's foreign investment policy in 2026. Under Press Note 2 of 2026 and the subsequent amendment to the Foreign Exchange Management (Non-debt Instruments) Rules, non-controlling beneficial ownership of up to 10 per cent by investors from countries sharing a land border with India can qualify for the automatic route, subject to applicable conditions, sectoral caps and other requirements. This is a relaxation of the earlier approval framework and may be relevant to international investment structures involving multiple jurisdictions.

You will also want to consider whether to establish a branch, subsidiary or joint venture. Branches are generally treated as extensions of the parent company, whereas subsidiaries are separate legal entities. This distinction can affect liability, taxation, licensing and commercial obligations.

Joint Ventures and Protecting Your Investment

Investing in regional markets can be beneficial when you have an established local partner. Such a partner may provide market knowledge, distribution channels, an understanding of local regulations, an established customer base and access to projects.

Having a holding company in the UAE can provide an effective structure for investing in a joint venture. This could involve direct ownership of shares in an overseas company or investment through an intermediary subsidiary.

However, you will need to ensure that the company's constitutional documents and shareholders' agreement reflect the agreed control and economic rights. These should address matters such as:

• Board representation
• Reserved matters
• Capital contributions
• Dividend distribution
• Restrictions on share transfers
• Pre-emption rights
• Protection against dilution
• Deadlock provisions

If your governance documents are not properly drafted, a shareholder may have limited influence over the company's management despite holding substantial economic rights. Similarly, a minority investor may find it difficult to exit an investment if the agreement does not provide practical exit mechanisms.

You will also want to consider dispute resolution. This includes deciding which governing law will apply, which courts or arbitration tribunals will have jurisdiction, whether any resulting judgment or award can be enforced and where the relevant assets are located.

The UAE has an established international arbitration framework, making it an attractive option for regional commercial agreements. The UAE is also a party to the New York Convention, which provides a framework for the recognition and enforcement of foreign arbitral awards. However, choosing the UAE as the seat of arbitration does not automatically guarantee that an award will be recognised and enforced in another country. The laws and enforcement procedures of the country where recognition or enforcement is sought will also apply.

Funding Your Expansion From the UAE

Your investment platform may also be used to raise and deploy funds. A UAE holding company can provide equity to subsidiaries, extend shareholder loans or arrange structured financing. If multiple investors are involved, a dedicated SPV can be established to hold their collective investment.

For larger transactions, the funding structure may combine equity, debt, shareholder funding and third-party financing. Separating the borrowing entity can help lenders identify the assets, cash flows and security available for a particular transaction.

However, you will need to ensure that your documents clearly outline the relationship between the entities. Loan agreements should include details of repayment schedules, interest, default provisions and security arrangements. Intercompany funding also requires careful consideration, as transactions between related entities must comply with applicable transfer pricing requirements, including the arm's-length principle.

If your UAE entity is raising funds from external investors or providing financial services to third parties, additional regulatory requirements may need to be considered. Activities such as managing investments, arranging investments, issuing securities or providing other regulated financial services may require authorisation. Simply holding a licence to operate as a holding company does not mean that you can provide regulated financial services.

Corporate Tax and Substance

Corporate tax is an important consideration when structuring cross-border investments. However, you should not assume that all holding companies or free zone entities will be exempt from tax.

The UAE has a corporate tax regime that applies to UAE companies and other taxable persons, including free zone entities. The standard rate is 9 per cent on taxable income exceeding Dh375,000. However, Qualifying Free Zone Persons may benefit from a 0 per cent rate on qualifying income.

To qualify for this treatment, a free zone company must meet several requirements, including maintaining adequate substance in the UAE, deriving qualifying income, complying with transfer pricing rules and meeting other prescribed conditions. Non-qualifying income may be taxed at the standard rate.

Another important consideration is the participation exemption. Where an investor holds qualifying shares in UAE or overseas subsidiaries, dividends and capital gains may be exempt from corporate tax. Generally, this requires a minimum shareholding of 5 per cent, held for an uninterrupted period of at least 12 months. Alternatively, the minimum ownership requirement may be met where the acquisition cost of the shareholding is at least Dh4 million. Additional conditions relating to the subsidiary's taxation, assets and the investor's entitlement to profits and liquidation proceeds will also apply.

For groups operating in multiple countries, transfer pricing must be considered. Transactions between related companies, including management fees, royalties, interest payments, service charges and loans, will generally need to be conducted on an arm's-length basis. The Federal Tax Authority may request supporting evidence, while certain businesses will be required to maintain master and local files, depending on the applicable thresholds.

The UAE has an extensive network of double taxation agreements, which can help reduce withholding taxes and prevent the same income from being taxed twice. However, the availability of treaty benefits will depend on the individual agreement, the type of income, residency requirements and applicable anti-abuse provisions. Simply incorporating an intermediary company in the UAE does not automatically establish entitlement to benefits under these treaties.

Governance, Compliance and Risk

Your investment structure will only be as effective as its governance arrangements. Each entity will need to maintain proper corporate records, accounting systems, beneficial ownership information and the necessary licences.

You will also need to consider what happens if there are changes in ownership, management or control. What appears to be a straightforward transaction from the UAE side may trigger approval requirements, tax consequences or reporting obligations in the country where the underlying asset or subsidiary is located.

Banking arrangements also require careful attention. Banks will often ask questions about the source of funds, beneficial ownership, commercial purpose and expected flow of funds. If your holding company does not have a clear investment rationale or cannot provide credible supporting documentation, you may encounter difficulties opening accounts or transferring funds.

Within family-owned groups, succession planning is another important consideration. Using a holding company, foundation and carefully drafted shareholders' agreements can help ensure that ownership is transferred smoothly between generations. These arrangements can also clarify how family members exercise control and protect the business from fragmentation. The appropriate structure will depend on the family's assets, residency, applicable inheritance laws and the jurisdictions involved.

Using the UAE as an Investment Destination

The UAE is becoming an attractive investment destination because it allows businesses to connect their capital with opportunities across multiple markets. Through appropriate corporate structures, investors can separate ownership from operations, protect individual investments, establish subsidiaries and maintain a central point for funding and management.

With the expansion of the ADGM and DIFC regimes, together with the corporate tax framework and double taxation agreements, the UAE offers a range of options for businesses and investors.

However, selecting an investment structure is not simply a matter of choosing an incorporation package. You need to consider where your assets are located, where investment decisions are made, how profits will be distributed, which regulations apply to the underlying businesses and how you intend to realise your investment.

For companies planning to expand into the GCC, Africa and South Asia, the UAE may offer more than just another location from which to operate a business. It can serve as the legal and financial centre for an entire regional investment portfolio. With appropriate structuring and genuine commercial substance, this can offer considerably more than a convenient corporate address.

Many families sell their family business at the end of a long journey. As the business grows from a small operation, it can create a large commercial empire for many generations. As the business is sold, the wealth can be converted into cash, investment and assets. However, there will be implications of changing the nature of the family's financial obligations.

While much will be focused on the price negotiation and due diligence, it's important to think about how the wealth will be structured post-sale. Many families will be left with a large amount of liquid wealth that they will need to manage.

Who will own the wealth? How will it be managed? Which Jurisdictions will the wealth be held in? How will family members benefit from the wealth? Who will have control over the wealth when the current generation is no longer able to?

Families with interests and connections in different countries will need to carefully consider how best they can structure the wealth. This should be planned alongside an exit strategy that considers how best to structure the family's wealth to consider their business, legal obligations and long term goals.

Firstly, Consider the Sale Structure

Before even looking at where to invest the wealth, the family should consider the implications of the sale. The family could be selling shares in the business, specific business assets or selling everything including through a holding company. Different types of sales will have different tax and legal implications.

When selling shares, the buyer will have full ownership of the company and its history. The seller will likely receive the wealth from share sales. Whereas, when selling assets, specific business assets will be transferred. This may mean that you need to consider how contracts, staff, licenses, IP and obligations are handled. This could impact on how much you actually receive.

Consider whether you will receive payment for the full amount of the sale at the point of sale or if there is any deferred payments. This could mean that the wealth isn't as liquid as the headline price suggests. You may have to consider how much you will receive due to escrow, warranties, indemnities and potential claims post-sale.

Carefully consider how the wealth will be structured. Ensure you know who owns the shares/assets, any outstanding shareholder loans, guarantees, intercompany balances and any encumbrances. If there are multiple family members that own the wealth, you should ensure the wealth is distributed in line with documented legal rights.

Isolate the Wealth

One of the most important things to consider post-sale is isolating the wealth. If the family still have significant investments, guarantees or management roles within the buying company, they may still be exposed to commercial risk.

You should consider isolating the wealth. This may mean investing into individual investment accounts, holding company, family investment vehicle or wealth management structure. This will depend on what you have, how many people need to benefit from the wealth, where the family resides and where they want to invest.

A holding company can provide a central place for holding shares in other companies, property and investment companies. This can make administration, reporting and ownership easier. However, creating a company does not automatically provide any protection or tax benefits. This depends on the jurisdiction, ownership, activities, tax rules and how the wealth is managed.

Don't try and put all your assets into one entity just for ease of administration. You may have a property portfolio, operating investment, liquid assets and assets that will go to the next generation. These may need to be separated to reduce risk and make ownership and succession easier.

Personal Ownership, Company or Foundation?

How you structure the wealth will depend on what you want to achieve. If you have a simpler wealth, fewer people wanting to benefit and want to maintain control then personal ownership may be enough. This can also make it easier to withdraw the wealth. However, you will still need to consider succession.

If you want to invest a large amount of the wealth, purchase businesses or have a well-diversified portfolio then a company may be the best solution. This can provide rules on how decisions are made, who can manage and how ownership can be transferred.

Foundations and trusts can help separate legal ownership/control from economic interest. A foundation is generally a legal entity that will have a charter and rules on how it will be run. A trust will involve the settlor putting assets under control of a trustee for the beneficiaries or specific purposes. The exact legal aspects will depend on the governing jurisdiction.

This can be very useful if you want the founder to play a specific role in setting long term goals for the family but also ensure that the next generation benefit from the wealth. This can be done by having conditions on how much they can receive. This could be tied to education, healthcare, maintenance or other legitimate purposes for the family. If the beneficiary is young, inexperienced with money or not expected to manage large investments then this can also provide continuity.

However, don't assume that a foundation or trust will protect you from creditors, tax authorities or legitimate claims. If the wealth is transferred to try and avoid existing creditors, hide the beneficial owners or avoid legal obligations then this can be challenged. Ensure that the foundation/trust is set up properly and genuinely run.

UAE

Families based in the UAE will have a number of options to consider. The introduction of Federal Decree-Law No. 37 of 2022 relating to family businesses has created a framework for family ownership, management and succession. Eligible family businesses can structure ownership, management and family governance.

While this is aimed at family businesses, the management principles can still be applied. By setting up a family charter, clearly defining who makes decisions and documenting how disputes will be resolved can help avoid any disagreements impacting your investments.

The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) also provide frameworks for foundations, trusts and other wealth management structures.

When deciding which option to use you need to consider more than just the cost of setting up a company. You need to consider the governing law, regulatory requirements, reporting, how the beneficiaries will be treated, availability of professional trustees/council and where disputes can be resolved. If you set up the structure in one financial centre you may also have assets in other jurisdictions.

You also need to consider the UAE corporate tax framework. The Federal Tax Authority have provided guidance on how family wealth management structures, including family foundations, will be taxed. This will depend on the legal structure, activities and if they qualify. You shouldn't assume that a foundation will automatically be exempt from corporate tax.

Even though there is no personal income tax in the UAE, you may still be exposed to tax in the countries where the family members reside or where investments are held. You will need to consider how capital gains, dividends, rental income, inheritance and distributions are taxed in line with the relevant domestic laws and double taxation agreements.

Managing International Investments

Families rarely have all their wealth in one country. After selling the business you may want to invest into commercial property in the UAE, listed investments internationally, purchase businesses in India or Europe or hold financial assets through institutions.

This can help to diversify your investments but can mean you have obligations in multiple jurisdictions. Where the asset is held, who owns it, where decisions are made and who the ultimate beneficial owner will influence the rules.

Consider tax residency. If family members move between countries they may have obligations in multiple jurisdictions. Just because they have a residence visa or bank account doesn't mean they are resident. Domestic legislation may look at physical presence, permanent home, centre of personal and economic interest and other statutory requirements.

Ownership across borders can also cause issues with withholding tax, inheritance tax, capital gains and reporting requirements. Using an offshore holding company or foreign foundation does not mean you won't have any obligations. Tax authorities may look at the substance of the arrangement, commercial purpose and who ultimately controls/benefits.

Ensure you have coordinated advice from professionals in the relevant jurisdictions. If you are transferring funds you may find that whilst the structure is efficient in the UAE, you may get unexpected results in another country.

Investment Strategy

Once you've decided on the legal structure you should consider your investment strategy. After a successful sale you may be tempted to invest into opportunities that will provide similar growth. However, this can expose you to risks that you may not understand.

Split the wealth into how you want to use it. Some should be kept in liquid assets to cover any immediate needs of the family, tax, professional fees and any potential liabilities. Some should be invested for the longer term into equities, bonds, property, private equity and other suitable assets.

Consider how long you want to invest. If the wealth is going to be used to support the current generation it may be best to have a different strategy. If it is going to be invested for 20-30 years then younger family members may have more tolerance for market fluctuations. Older family members may want income, capital protection and liquidity.

Ensure you don't put all your wealth into one asset class. Putting all your sale into property, one stock market or one currency can expose you to significant risk. Consider geographical risk, currency movements, liquidity requirements and how much risk the family is willing to take.

Having an investment policy document can help. This should include what the family want to achieve, how much risk they are willing to take, any limitations, liquidity requirements and who has authority. Having regular reviews can help ensure that decisions are in line with the family's financial position.

Family Office

If you have significant wealth and investments across different jurisdictions then a family office may be a good option. This can help to centralise your investment management, accounting, tax compliance, legal, estate planning and reporting.

You don't necessarily need a large independent office. Smaller families may use a virtual or outsourced family office. Specialist professionals can be appointed to manage different areas.

The key thing to consider is who has authority to make investment decisions, approve major transactions, distribute funds and appoint professionals. Whilst the founder may want to have oversight, this should not be purely dependent on personal relationships.

A family council can be used to discuss financial matters, succession, philanthropy and disputes. A family constitution or charter can be used to document common values, expectations and how to resolve disagreements. Whilst they may not automatically have the same effect as a company's constitutional documents or trust, they can provide a good foundation.

It is important to consider that whilst the family may own the wealth, they may not want to manage it. If the next generation have different interests then you may want to ensure that whilst they have a right to benefit from the wealth they may not be qualified. Using independent investment managers and clear reporting can help ensure professional standards are maintained.

Succession Planning

Even after the sale of the business you will still need to consider succession planning. In many cases this will be more important as the family will now have a number of financial and physical assets rather than one business.

Without proper planning in place, you may find that if a key family member passes away or becomes incapacitated there may be uncertainty around who can access the accounts, make investment decisions, own the assets and how the wealth will be distributed. There may also be disputes between the heirs. This may cause delays in transferring the assets especially if family members reside in different countries.

Consider wills, trusts, foundations and other succession documents. This will depend on the family's domicile, nationality, religion, where assets are held and personal status/inheritance laws. In the UAE this can depend on the individual and the jurisdiction.

A will may not cover everything. Consider how the ownership, shareholders, beneficiaries, power of attorney and any foundation/trust governing documents will impact. If the family have assets in multiple countries then consider if separate estate planning documents are required and if they will be consistent.

The aim is to plan how the wealth will be managed, who will have control, how dependants will be supported and how any disputes can be avoided.

Protecting the Family Wealth

Many founders will have had a strong relationship with the business. It may have provided employment, professional identity and something the family can all relate too. Moving to managing financial assets can be challenging especially if the next generation have different expectations of how they want to spend, invest and take on risk.

Some families will want to invest some of the wealth into new ventures so that the next generation can have their own commercial interests. Others may set up foundations, education funds or structured charitable initiatives. This can help to provide continuity and give the family a wider role.

Whatever you decide, ensure the plans are realistic and sustainable. Consider how you will distribute the wealth between the beneficiaries. Too much being withdrawn, poor investment decisions and family disputes can cause the wealth to slowly be lost. This could have taken decades to build.

Having regular independent reviews of your investment, tax, governance and succession documents are crucial. As circumstances change you may need to update the original plans.

Long Term Wealth Plan

The sale of a family business shouldn't be seen as the end of the family's financial journey. It should be seen as the beginning of a new chapter. Ensuring wealth is protected, invested and succession planning is more important.

Rarely will the best solutions be just one company, foundation or trust. It will be a combination of the right ownership structure, legally sound documentation, tax planning, diverse investments and clear family governance.

Families based in the UAE or with international investments have a lot of flexibility with the available legal structures. However, careful consideration needs to be given to ownership, tax residency, inheritance, regulatory requirements and long term goals.

Ultimately the success of the sale shouldn't just be measured by how much you received from the buyer. It should be measured by how well you can protect, manage and pass on the wealth to the next generation without causing unnecessary disputes. By carefully planning how you want to structure your wealth, like you did with the business, you have a better chance of making your successful exit a lasting legacy.

There are a range of legal decisions that are made during the lifecycle of an international investment. Whilst initially you might decide to invest in a company, property or interest, there will be decisions to be made throughout the investment to ultimately generate a return. An investment structure that was efficient at the time of incorporation may no longer be the most efficient when looking to raise external finance, expand into new markets, bring in new shareholders or sell.

This is an important consideration for international investors, as your company might be incorporated in one jurisdiction, but held through a holding company in another, have banking relationships in a third and generate income from a number of different jurisdictions. Each will have its own legal requirements, tax implications, disclosure requirements and potential for disputes.

Overall, there are nine main areas to consider within the lifecycle of an international investment. Whilst they are listed below in order, they can overlap significantly, and decisions made early on can impact what options you have much later in the lifecycle. You may find that you need to reconsider your original investment structure based on developments during the investment.

Formation

The first key decision to be made is where and how to set up your investment. There are a number of factors to consider when deciding on the jurisdiction, including the legal environment, political and regulatory stability, market access, enforceability of contracts, banking facilities and the treatment of foreign ownership.

If the business is looking to operate within the UAE, there are a number of options to consider, such as setting up a mainland company, a free zone company or a holding company in an appropriate financial centre. Each will have its own legal requirements, permitted activities and implications for operating in and out of the jurisdiction. This should also be considered for other jurisdictions such as Singapore, Hong Kong, Mauritius and Luxembourg.

You also need to think about the legal structure you would like to set up. If the business is operating, you may want to set up a limited liability company. However, if you are looking to hold shares in subsidiaries, IP or other assets, then a holding company may be more appropriate. Partnerships, trusts and foundations may also be useful, depending on your investment or family wealth goals.

Your formation documents should reflect the relationship between the parties. The memorandum and articles of association, shareholders' agreement, investment agreement and constitutional documents should outline who has control, what capital is being invested, restrictions on the transfer of shares, voting rights and dispute resolution.

If you set up your company cheaply, you could end up paying dearly if the structure doesn't fit your needs going forward.

Ownership

Once your investment vehicle has been set up, you will need to consider who owns it. With international investments, the shareholder on the register may not actually have control or benefit from the investment. Shares may be held indirectly through intermediary companies, trusts or other recognised legal structures.

Determining who the ultimate beneficial owner is now plays a key role in international corporate regulation. Many jurisdictions will require companies to accurately record their ownership and identify who ultimately controls the company and who will economically benefit. This can be relevant during the incorporation stage and when there is a change of ownership.

While you may have a legal owner of the shares, they may not be the beneficial owner or the person with control of the company. If certain powers are reserved in the constitutional documents or shareholders' agreement, the majority shareholder may not have full control over key decisions.

Having a well-negotiated shareholders' agreement in place can help to outline how directors will be appointed, any reserved matters, dividend payments, extra capital requirements, transfers of shares and deadlock situations. It can also provide a mechanism to deal with any disputes between majority and minority investors.

With international ownership, there may be a number of restrictions on foreign investment, industry-specific licensing requirements, exchange controls and tax implications to consider. Just because something is allowed in the country of incorporation, it may not be acceptable in the country of the underlying business.

Banking

Just because you have incorporated your company doesn't necessarily mean you will be able to open bank accounts. Opening and maintaining bank accounts for an international investor can be one of the most challenging parts of setting up your business.

Banks will carry out a lot of due diligence on the company, including who owns it, where the funds are coming from, what the company does, how much it expects to transact and where it is exposed geographically. They may also ask for details of directors, shareholders, ultimate beneficial owners and counterparties, as well as the commercial reasons for the transactions.

If the ownership structure is complex or the business doesn't make sense, it could cause delays. Banks will also look at any exposure to sanctions, politically exposed persons, money laundering and the types of countries in which the company operates.

Your legal structure should be set up so that it will be easy to open bank accounts. All documentation should be in order, including company records, board minutes, shareholder information, contracts and evidence of where the investment funds are coming from.

Currency exposure, payment methods, foreign exchange restrictions and banking facilities should also be considered. If your corporate structure is not suitable for providing reliable banking facilities, it may not provide much commercial value.

Operations

Once your investment is in operation, there will be a number of things to consider from a legal perspective. This will depend on what you are doing with your business, which jurisdictions you operate in and whether your company is regulated.

Depending on the industry you are in, you may have licensing, employment law, tax, data protection, consumer protection, competition and industry-specific regulations to consider. Your company may be compliant in the country of incorporation; however, you may be breaching local requirements in the countries where you have employees, customers, assets or a permanent presence.

Contracts should also be considered. Supply, distribution, franchise, IP licence, employment and service contracts should clearly outline what each party is responsible for, what they will be paid and what the risks are.

Consideration should be given to which law governs the contract and where any disputes may be resolved. If the contract is governed by the law of one country, you may need to enforce it against your counterparty or its assets in another country. Arbitration can be a good neutral option for resolving disputes, but you should consider whether the award will be enforceable and what interim relief is available.

Tax compliance can also be an issue. You may have transfer pricing, withholding tax, permanent establishment, VAT and economic substance requirements to consider.

Financing

As your business grows, you may need to raise more capital than was invested by the original shareholders. You may look to raise finance through bank loans, private equity, venture capital, shareholder loans, trade finance or other methods.

Different financing options will have different legal implications. Equity financing will dilute your ownership, but generally there will be no obligation to repay. Debt financing will preserve your shareholder percentages but will create an obligation to repay, along with interest costs, covenants and potential enforcement of security.

Lenders may also require guarantees, share charges, property mortgages, assignments of receivables or security over other business assets. With international financing, you need to consider whether these are valid, registered and enforceable under the laws of the relevant jurisdictions.

You should also consider any restrictions on paying dividends, changes in control, additional debt and the disposal of assets. Loan agreements often have clauses that can restrict your ability to restructure or undertake large transactions without the lenders' approval.

If your business has multiple subsidiaries, you also need to consider how you will split the debt and security. If your financing creates exposure to assets throughout your group, it can create risks.

Expansion

Expanding internationally can create further legal complexities. When entering a new country, you may want to set up a subsidiary, register a branch, appoint a distributor, enter a joint venture or purchase an existing business.

Each option will have different implications. A subsidiary will generally be a separate legal entity, whereas a branch will be part of the foreign parent company. This could create exposure for the parent company to liabilities incurred locally.

Joint ventures can help you gain local knowledge, access to distribution networks and approvals, but you need to ensure that capital contributions, control and profit-sharing arrangements are clearly outlined. If there are differing expectations between the partners, this can create significant disputes if they are not covered in the documentation.

You also need to consider IP protection, data, competition and employee movement. What is lawful in one market may need to be significantly changed in another.

Before investing, you should consider these factors:

Restructuring

It is rare for an international investment structure to remain the same. Tax changes, changes in ownership, business strategy, financing requirements and regulatory changes may mean your structure is no longer suitable.

A restructure can include transferring assets, merging subsidiaries, setting up a new holding company, changing shareholders, consolidating operations or splitting business activities. In some situations, you may also wish to change the jurisdiction in which the company is incorporated using a recognised continuation or re-domiciliation process.

However, there may be implications to consider. Transferring assets may incur capital gains tax, stamp duty, VAT or other costs. Creditors' rights, security arrangements, employee entitlements and change-of-control clauses in contracts should also be considered.

If you are restructuring to make your position more tax-efficient, you should ensure that it has a genuine commercial purpose. If it doesn't have a commercial purpose or doesn't comply with applicable anti-avoidance rules, it could come under scrutiny. Transactions between related parties should have supporting documentation and follow transfer pricing principles.

The key is to ensure that there is a genuine commercial purpose and that the arrangement will stand up to legal, regulatory and tax scrutiny in all relevant jurisdictions.

Succession

Succession planning is often overlooked until something happens unexpectedly that highlights issues with the ownership structure. In family-run businesses and private investment groups, the death or incapacity of a key shareholder can cause uncertainty around who will have control, manage the company and distribute the assets.

There are a number of differences between jurisdictions regarding the legal position of shares, business interests and personal assets. Inheritance laws, forced heirship provisions, matrimonial property rules and foreign wills should be considered.

Trusts and foundations can be used to hold and manage assets. This will depend on which law governs the trust or foundation, what the assets are and whether they are recognised in the relevant jurisdictions. Family constitutions, shareholders' agreements, succession documents and powers of attorney may also be used.

If you have assets in multiple countries, you should consider how the different legal systems will interact. A will in one jurisdiction may not resolve succession issues relating to property or company shares in another.

Having a well-documented succession plan can help reduce the risk of the company becoming fragmented, management disputes arising and assets having to be sold under pressure.

Exit/Sale

The final stage of your investment lifecycle will be selling, transferring or realising your investment. Having a plan in place for exiting your investment is important. How well your company is documented, its ownership structure, tax compliance, licences and contracts can directly affect how valuable your business is and how long it will take to complete a transaction.

There are a number of ways to exit, including selling shares or assets, a merger, a management buyout, a public offering or liquidating the investment vehicle. Each will have different implications for tax, liabilities, approvals and employees and creditors.

If you sell the shares, generally the purchaser will gain ownership of the company along with any existing liabilities. If you are selling the assets, you can transfer specific assets and liabilities. This may require individual consents, registrations and approvals.

Due diligence will be key. The purchaser will want to review your financials, ownership, any litigation, employment matters, IP, tax, regulatory compliance and key contracts. Representations, warranties, indemnities and escrow arrangements will often be negotiated.

If you have operations in multiple jurisdictions, there may be local implications. Restrictions on transfers, merger control, foreign investment approvals and tax implications can affect how quickly you can complete the transaction and how much you will receive.

Investment Structures Must Adapt

The legal lifecycle of an international investment demonstrates that you shouldn't consider your international structure only once. Decisions made during formation can affect your ability to access banking, raise finance, expand and plan for succession many years later. As your investment grows, you may also find that your initial structure needs to change significantly.

Finding the right balance between certainty, flexibility, tax efficiency and compliance can be a challenge. Working closely with your corporate lawyers, tax advisers, accountants, banks and local counsel can help.

There isn't a one-size-fits-all approach when it comes to international structures. It will depend on your goals, where your assets are, what markets you are targeting, how you want to own them and how long you plan to hold them.

The most successful investments will be those that have an appropriate structure that allows them to adapt to changing commercial circumstances, ensuring that ownership is protected, operations continue and there is a clear exit strategy.

The founder often plays an integral role in the business. They may have control over major clients, responsibility for approving financial commitments, managing relationships with banks and overseeing senior staff. As a result, the founder may hold considerable commercial knowledge, established relationships and decision-making authority.

This arrangement can work well, but as the founder approaches retirement, it can create risks if the business has not developed a strong management structure. A sudden departure may expose weaknesses, such as unclear decision-making powers, undocumented commercial agreements and reliance on a small number of key employees.

Succession planning is often viewed as a family matter, particularly where ownership rests with a parent and child or where the business has passed through several generations. However, it is important to consider its impact on the business as a whole. This involves examining corporate governance and considering what will happen to employees, creditors, investors, customers and commercial partners. Ultimately, the most important consideration is whether the business can continue to operate effectively.

Retirement provides an opportunity to separate ownership, management and oversight of the business. The founder can retain an economic interest without remaining the Chief Executive, while professional managers can be appointed to oversee day-to-day operations through a board or other management body. Making this distinction before the founder retires reduces the risk of disruption arising from a change in personal circumstances.

Choosing a Successor

A common mistake in succession planning is to assume that the eldest child, another relative or a long-serving employee will automatically become the successor. While family relationships, loyalty and length of service may influence the decision, they do not necessarily mean that the individual has the skills required to manage the business.

The successor must have the ability to manage the financial, staffing, regulatory and commercial aspects of the business. If the business operates in multiple jurisdictions, they may also need knowledge of different licensing rules, tax requirements, employment regulations and contractual risks. Inheriting shares in a business does not automatically give someone the skills or legal authority required to run it.

Before choosing a successor, the founder should identify the responsibilities that need to be handed over. These could include signing contracts, managing bank accounts, approving expenditure, appointing senior staff, representing the business before government authorities and making strategic investment decisions. Each responsibility should have a clearly identified successor, supported by the necessary approvals and documentation.

If no family member is ready to take on the role of Chief Executive, employing an experienced professional may be a more sustainable option. Family members can retain ownership and have an input into strategic decisions, while a suitably qualified management team oversees day-to-day operations. This allows the business to remain within the family without depending on a particular relative to manage it.

Separating Ownership and Management

A founder's retirement does not necessarily mean that the business must sell its shares. Ownership and management are separate, and the founder can continue to hold shares, receive dividends and exercise agreed shareholder rights. This can be achieved through an appropriate ownership and management structure.

The arrangements will depend on how the business is established. In the UAE, many mainland companies operate under Federal Decree-Law No. 32 of 2021 on Commercial Companies, as amended, together with specific rules applicable to certain types of companies and free zones.

Before the founder steps down, it is important to review the Memorandum of Association, Articles of Association and shareholders' agreements. These may need to be updated to address the appointment and removal of directors, voting rights, reserved matters, share transfers, dividend policies and dispute resolution. Any powers previously exercised by the founder should be assigned to the appropriate corporate bodies.

This is particularly important if the founder wants to remain a shareholder without having any executive involvement. Without clear provisions, other shareholders may assume that they are entitled to influence how the business is managed. Alternatively, the successor may find that they do not have sufficient authority to carry out their responsibilities.

The objective is to structure the business so that the person responsible for running it has the necessary authority, while shareholders retain the rights to which they are legally entitled.

The UAE Family Business Framework

The UAE has introduced a specific framework to support family businesses. Under Federal Decree-Law No. 37 of 2022 on Family Businesses, qualifying companies can organise their family ownership, governance and succession arrangements.

The legislation recognises that family businesses can face challenges that differ from those encountered by other companies. Disagreements may arise over management, succession, share transfers and the involvement of relatives in the business. Such disputes can affect the company's operations if they are not addressed appropriately.

One of the key instruments available under the framework is the Family Charter. This can outline the family's principles concerning ownership, share valuations, profit distribution, the qualifications required of family members seeking employment in the business and procedures for resolving family disputes. It can also establish expectations regarding the education and preparation of younger family members who may eventually assume leadership roles.

However, the Family Charter should not replace the Articles of Association or override statutory requirements. Where conflicts arise, the applicable legislation and corporate constitutional documents must be respected. Families should ensure that their arrangements are supported by the appropriate legal documentation.

The framework also allows families to establish governance bodies, including family assemblies and family councils. These can help the founder address family concerns without involving those responsible for running the business.

If the business meets the relevant requirements, registration under the family business framework is worth considering. The regime is intended to support continuity of management, organised ownership and the prevention of fragmentation of family shareholdings.

Planning Inheritance

Retirement and inheritance planning are closely connected, but they are not the same. While a founder can transfer management responsibilities during their lifetime, the transfer of shares raises separate considerations. These include inheritance rights, share valuation and the need to protect family interests while maintaining stable ownership of the business.

In the UAE, particular attention is required where shareholders or beneficiaries are based in different countries. The applicable inheritance regime, the company's place of incorporation, the nature of its assets and the founder's personal circumstances can all affect how succession is handled. A will should not be assumed to override every restriction imposed by company law or other applicable legal requirements.

The DIFC Courts Wills Service is available to qualifying non-Muslims with assets in the UAE. It provides an option to register wills covering business shareholdings. Up to five UAE shareholdings can be included in a Business Owners Will. Executors can also be appointed to administer the specified interests. Before relying on this arrangement, business owners should check whether their shares are subject to any legal or contractual restrictions.

An important legislative development is Federal Decree-Law No. 20 of 2025, which amends provisions of the UAE Commercial Companies Law. The amendments include provisions dealing with the disposal of shares or stakes belonging to deceased partners or shareholders. Existing shareholders or the company may be given priority to purchase the interests. The price can be agreed with the heirs or determined through a specialist valuation by the competent court.

This is relevant to succession planning because the transfer of ownership does not necessarily mean that the shareholder base must expand indefinitely. The founder should consider how these provisions interact with the Articles of Association, any shareholders' agreement and the intended inheritance arrangements.

It is also important to establish whether the business has sufficient liquidity to purchase shares from heirs who would prefer to receive cash rather than retain an ownership interest. Without a realistic funding arrangement, disputes may arise over valuation and ownership.

Establishing an Independent Management Team

If the business remains completely dependent on the founder to make all significant decisions, the successor will struggle to take over effectively. The management structure must be reorganised to distribute authority and responsibility.

A board of directors or an appropriately constituted governing body can provide oversight, approve major transactions and monitor management performance. Independent directors or advisers can also contribute commercial expertise and objectivity, particularly where family relationships influence business decisions.

The founder should ensure that financial controls, reporting procedures and approval mechanisms are in place. Bank mandates, authorised signatories, powers of attorney, licensing records and contractual authorisations should all be reviewed. The appointment of a new manager does not automatically mean that the individual is legally authorised to represent the company when dealing with banks, regulators or third parties.

Important commercial knowledge may reside with the founder. This could include key customer relationships, supplier arrangements, pricing strategies, intellectual property and regulatory commitments. Documenting this information will reduce the risk of losing critical knowledge when the founder steps away.

A smooth transition should be planned. The incoming management team should be involved in major negotiations, financial reviews and strategic decisions before assuming full responsibility. The founder can also provide support in a non-executive or advisory capacity for a defined period. However, the arrangement should not create confusion over who has final decision-making authority.

Establishing the Right Ownership Structure

For larger family businesses, managing ownership can become increasingly difficult when multiple family members hold shares in operating companies. In some circumstances, establishing a holding company or another appropriate ownership structure can provide a more organised arrangement.

A holding structure can consolidate ownership of operating subsidiaries, investments and business assets. It can also establish a clearer distinction between the management of commercial operations and the family's long-term ownership interests. However, the choice of structure should reflect how the business operates, its tax position, regulatory requirements and the laws of the relevant jurisdictions.

The UAE's financial free zones, including the Dubai International Financial Centre and Abu Dhabi Global Market, provide legal frameworks that allow structures such as foundations and trusts to be established. Depending on the circumstances, these can form part of a wider succession and private wealth strategy.

However, such arrangements will only be effective if they are properly established. Asset transfers, constitutional documents, beneficial ownership requirements and the laws of the relevant jurisdictions must all be considered. A structure established in one jurisdiction may also require recognition or additional legal steps in another.

If the founder has businesses, properties or investments in multiple countries, succession planning should take a coordinated approach. Conflicting wills, incompatible ownership provisions and different approaches to inheritance can create disputes and complicate the transfer of control.

Informing Staff, Customers and Creditors

The founder's retirement can create uncertainty among other stakeholders. Employees may be unsure about their future roles, customers may be concerned about how the business will continue to operate, and lenders may reassess its management and financial position.

Communication will be important. The founder and incoming management should agree on how and when the change will be announced, particularly where the founder has been closely involved in major commercial relationships.

Employment contracts, incentive arrangements and staff retention may also need to be considered. Senior employees may be critical to maintaining business stability. Their continued involvement can preserve institutional knowledge and reassure customers during the transition.

Financing agreements and major commercial contracts should also be reviewed. Some may contain clauses relating to changes in ownership, management or control. Failure to consider these provisions could create unnecessary contractual difficulties.

The business should also review its insurance arrangements. Key-person insurance may be appropriate in certain circumstances. While it cannot replace the founder's management knowledge, it can provide financial support if the founder becomes incapacitated or dies before the succession arrangements are completed.

Gradual Retirement to Reduce Commercial Risk

For a founder who has spent years building a business, stepping away can be difficult. There may be concerns that the successor will not uphold the company's reputation and standards or that future decisions will not reflect its original values.

A gradual transition can help address these concerns. Initially, the founder can step back from day-to-day operations while retaining responsibility for selected strategic matters. As the transition progresses, the successor can assume greater authority, allowing the founder to move into an advisory or non-executive role before eventually leaving the business.

Responsibilities and timelines should be clearly defined. An informal assurance that the founder will remain available whenever needed can create confusion and undermine the successor's authority.

The business should also have a contingency plan. If the proposed successor leaves, becomes incapacitated or proves unsuitable, alternative arrangements should be available. Succession does not necessarily involve appointing just one person. A management team with complementary skills, supported by clear governance procedures, can provide greater resilience.

Measuring the Success of Succession

The successful transition of a business beyond its founder does not necessarily mean that ownership must remain within the family. In some cases, the most appropriate option may be to appoint a professional management team, sell part of the business, establish a strategic partnership or transfer the entire enterprise to another investor. The decision should reflect the company's commercial prospects, the interests of its owners and the availability of suitably qualified successors.

For founders approaching retirement, the most important step is to begin the process early, while they still have the time and authority to implement the necessary arrangements. Corporate documents, shareholders' agreements, inheritance instruments, management appointments and asset ownership structures should be reviewed together. Professional advice should be obtained from specialists familiar with the relevant jurisdictions.

Ultimately, the success of the transition should be measured by how effectively the business operates without the founder's involvement. If it cannot make decisions, retain customers or meet its obligations without the founder, the succession process has not been completed successfully.

The strongest legacy a founder can leave is a business with the leadership, legal structure and institutional strength to continue growing long after they have stepped away.

Having a registered address in a low tax jurisdiction may satisfy the incorporation requirements, but it does not necessarily mean that the company will be tax resident, profits will be taxed in that country and that it will qualify for any treaty benefits. This has become an increasing concern for multinational groups, holding companies and entrepreneurs who have an international presence.

While not a new issue, as governments continue to share financial information and understand who owns the company and what transactions are taking place, having a company incorporated in one country does not necessarily mean it will be seen as tax resident in that country. A company will be tax resident in the country where it is effectively managed. Even if a company can be proven to be tax resident, if there isn't any real business activity within the company, this can cause issues with claiming any lower rate of withholding tax or exemptions.

When structuring companies across the United Arab Emirates, Europe, Asia and Offshore Financial Centres, it is no longer enough to simply set up a legal structure, you must be able to prove that the company is doing what it says on the tin.

Tax Residency is Not the Same as Incorporation

Incorporation will provide a company with a legal existence in that country. However, tax residency will be dictated by the laws of that country and any agreement between countries.

Depending on the country, the company may be tax resident based on incorporation or if the central management and control is located elsewhere. Some countries will require the company to show that key decisions are made in that country. Therefore, there can be conflicting opinions on where the company will be tax resident, if the company is incorporated in one country, the management, directors and shareholders are in another country.

This can be a real issue for holding companies. While the company might have been established to own shares in operating companies, receive dividends, provide finance to the group or hold IP, this can be a legitimate business activity even if there is a small number of staff. However, depending on the laws that apply to the company, the type of income and if the structure meets the requirements for substance, this can impact on how the company is taxed.

A certificate of incorporation or tax residency certificate may help with proving a company's position, but it cannot be guaranteed that all tax authorities will accept this. They can investigate the facts, purpose and how decisions are made.

Where Effective Management is Made

Often the key issue will be where the company is effectively managed. Tax authorities can investigate where the directors meet, who has overall approval for major transactions, where decisions on financing are made and whether the board have any independent judgment.

If the company only has minutes to prove that decisions were made in a certain country, this may not be enough. If there are emails or other correspondence showing that the decision was not made in that country but approved, then this may cause issues. Directors may also be appointed locally to comply with local requirements, but if they are not heavily involved in the company, this could be questioned.

It doesn't necessarily mean that all decisions have to be made physically in the country of incorporation. Many international companies will have remote management, regional directors and travelling directors. However, the key issue is how the laws of that country will impact on where the company is resident.

Having clear lines of delegation, properly constituted board meetings, commercial justification for major decisions and ensuring directors have access to the right information can all help to reduce any uncertainty. The documents should show genuine governance and not an administrative process to ensure the company falls into the desired tax position.

However, if the founder or parent executive is overseas and making all material decisions for the company, despite it being an independent subsidiary, this can cause an issue. If the local directors aren't heavily involved in the company, this could be a problem.

Corporate Substance

Corporate substance is often a hot topic. While having an office, staff and spend can be a factor, it depends on what the company is doing and the laws that apply.

If the company is trading and has a lot of front facing activity, then it will likely have a very different structure to a company that holds investments or receives dividends. If the company is providing finance, it may need to have staff or external expertise to manage the credit risk, liquidity and lending decisions. If the company is holding IP, then there may be questions around who is developing, improving, maintaining, protecting and exploiting the IP.

The amount of local presence required will depend on what the company is doing, what risks it is taking and what decisions it is claiming to be making. Just because the company has a large office, doesn't mean it is genuinely managed there. Likewise, if the company is lean, this does not mean it is artificial.

In the United Arab Emirates it is important to understand the difference between regulation and tax. Companies incorporated in a free zone will often have additional licensing, reporting and substance requirements. To qualify as a Free Zone Person and receive the relevant corporate tax treatment, companies must comply with the requirements set out in the UAE corporate tax regime. This includes substance requirements. Having a company in a free zone does not mean it will be exempt from corporate tax.

In other countries, there may be different requirements due to the economic substance laws, local anti-avoidance rules and international requirements.

Beneficial Ownership

Tax authorities and financial institutions are increasingly looking to understand who the ultimate natural owners/ controllers of the company are. This is to improve transparency of the company structure and understand whether they are compliant with tax requirements, financial crime risks etc.

A company may be owned by another company, which is owned by a trust, foundation or multiple entities. While this can be legitimate for succession planning, holding assets and investment management, it can cause issues if the ownership cannot be explained, proven and matches with the company's stated activities and tax position.

It is important to understand that beneficial ownership should not be confused with legal ownership or management. The company may be owned by a shareholder, but not have full powers. Or someone may not be a shareholder but have control due to contractual rights, voting rights etc. The definition and disclosure requirements depend on the laws that apply.

If there are discrepancies between the company register, bank details, tax returns and information shared between authorities, this can cause issues. If there are hidden controllers, nominee arrangements or ownership changes around key events, this can cause issues.

Companies should have clear ownership information and a reason for the layers of ownership. If there are trusts or foundations, the roles of the founder, trustee, protector, beneficiary and any other controllers should be understood. There are varying requirements for transparency and just because the company has disclosed to one authority, this doesn't mean they will be compliant with all.

Cross Border Payments

Corporate substance can be an important issue when there are payments between related parties in different countries. Depending on the laws of the country, dividends, interest, royalties, management fees and service payments may be subject to withholding tax, transfer pricing requirements or other restrictions.

To qualify for relief under a treaty, the company may need to prove that it is a resident and entitled to the benefit. Tax authorities may also want to understand if the company is the beneficial owner, there is substance to the arrangement and if there are any anti-abuse provisions.

Beneficial ownership can be a key point, especially with passive income. If an intermediary is receiving the dividends or interest but is contractually or practically obliged to pay to another party, it may be hard to prove it has the income in the way intended. However, this depends on the wording of the treaty, local laws and facts.

Many treaties influenced by the OECD multilateral instrument include a principal purpose test. If one of the principal purposes of the arrangement was to obtain the benefit, this can limit the benefit received. Other treaties will have their own limitation of benefits provisions or anti-abuse provisions.

Transfer pricing can also cause issues. Charges within the group will need to be analysed to see if they are commensurate with the functions performed, assets used and risks taken. If the company is receiving high management fees or royalties but does not have appropriate staff or decision making processes, this could cause issues. Whilst it is important to have the right documentation and wording in place, this cannot replace evidence of economic activity.

Increased Information Sharing

With increased international collaboration, companies will find it harder to hide behind information gaps. The OECD Common Reporting Standard enables automatic sharing of financial account information between countries that participate. Country by country reporting means that tax authorities will have information to understand how a multinational groups income, tax and business activities are distributed globally.

While this will not necessarily mean the company is non-compliant, it means tax authorities can compare information from different sources.

Tax authorities will also have information from local filings, beneficial ownership registers, banking information (under the relevant legal processes), transfer pricing documentation and treaty information. If there is a mismatch between profits and where staff, assets or management are, this could cause issues. However, this needs to be viewed in the context of the company.

For multinational groups, if there are any disputes, this can cause additional tax, interest, penalties, lengthy investigations and litigation. There may also be double taxation if both countries are claiming. Whilst there may be relief available via local processes, mutual agreement procedures in tax treaties or other processes, it can take time to resolve and there is no guarantee.

Creating a Solid International Structure

Start by understanding why you need an entity. What role will it play? What risks is it taking? How does it fit into the wider group? This should influence why you are choosing that country.

Ensure the governance matches what the company is responsible for. Directors should have the right powers and access to information. Major decisions should be properly documented. If key executives are working from another country, the group should consider whether they will have an impact on where the company is resident.

Consider substance in relation to transfer pricing, beneficial ownership disclosure, treaty eligibility and licensing requirements. Consider whether your banking, contracts, accounts and tax returns are all consistent.

Don't just look at incorporating or setting up a new operation. If there are any changes in leadership, key executives moving, acquisitions, new finance arrangements or changes in where business is being carried out, this could impact on the tax analysis. Something that was appropriate when setting up may need to be reviewed.

Corporate Substance is Now a Strategic Consideration

While international tax planning is a legitimate part of structuring your business, countries will always try to attract investment by providing predictable regulation, infrastructure and access to markets. However, there is increased focus on ensuring that arrangements are not trying to plan tax in a way that does not reflect the economic reality.

Investors will want to ensure that the legal structure, management, ownership and activities of an entity supports the tax position.

A registered address will be required in many countries, but this alone will not help with any of the issues around residency, control or tax benefits. As there is increased transparency and enforcement across borders, having a solid structure with a commercial purpose and real activity will be more beneficial.

As a family business grows and goes international, consideration needs to be given to where assets should be held and owned, and how to pass control to the next generation. As a manufacturing business, you may have a manufacturing company in 3 different countries, IP held in another country, investments elsewhere and family members living in different legal jurisdictions. Your structure can have implications on your tax position, liability and availability of funding, and can impact on how a succession dispute is resolved.

There is no one-size fits all approach to choosing a jurisdiction for your international family business. If you choose a jurisdiction with favorable tax rates for your company, you may get issues with limited certainty in the courts relating to ownership, high compliance requirements from the banks and conflicting inheritance rules. You may also find that a complex holding structure will cause unnecessary costs due to lacking commercial rationale.

The key consideration is to ensure you have a structure that reflects how you want to own your business, based on how you operate, make decisions and wish to protect your assets.

Separate Business Assets

Firstly, you need to consider separating the assets used to run your business from those amassed. This can include your operating companies. These companies will have employees, contracts, debt, stock and take on business risk. The family wealth could include shares in these operating companies, investments, property, cash and IP. By ensuring these are legally separated, you can limit risk and easily manage ownership.

Generally it would be best to have the assets and liabilities held by your operating company. For example, if you have a trading subsidiary this may own the stock and employees. However, your property may be held by a separate property company. The shares may be owned by your parent company. Whether this is suitable will depend on your local laws, funding requirements, tax implications and the commercial relationship between your companies.

By separating property or other valuable assets from your trading company, you can reduce some of the risks associated with trading. However, this may not always be the case. You may have guarantees, security, intercompany loans and contractual obligations which mean that there are still liability issues. The courts may also look at transactions which are designed to frustrate creditors and insolvency laws may allow certain transfers to be challenged.

If you are looking to move assets when there has been a financial dispute or when insolvency is likely to occur, this will be looked at closely. Ideally you should put in place your ownership structure when your business is in a strong financial position.

Choose a Holding Company with Purpose

Having a holding company can give you one place to own your subsidiaries across multiple countries. This can include receiving dividends, owning shares, IP and managing your investments whilst your day-to-day operations are run by locally incorporated companies. If you have interests in the Gulf, Asia and Europe, having a parent company can make reporting easier and allows you to easily make changes to your ownership.

When choosing a jurisdiction, you should consider more than just the tax rates. Consider how dividends and capital gains are treated, the level of withholding tax, access to tax treaties, foreign controlled entity rules, corporate governance requirements and how easy it is to distribute funds to shareholders. There may be exemptions to tax; however there may be restrictions on ownership levels, time held, qualifying income and other requirements.

Consider the legal structure of your holding company. The shareholders may benefit from limited liability; however the parent company will have obligations to fulfill from their activities and assets. Directors will have duties to fulfill in accordance with the law governing the entity. Transactions between related companies should be well documented and commercially justified.

Whilst you may want to hold shares in a jurisdiction that is attractive, you may not want to employ people, develop products or have regional management there. Whilst you can create an entity, this does not automatically mean the entity will have a tax residency status or benefit from tax treaties. Increasingly authorities will look to see where strategic decisions are being made, who controls the company and if there are substantive activities.

Generally for international families the best structure is one that can clearly explain the legal and commercial rationale to regulators, banks, tax authorities and business partners.

Jurisdiction in Relation to Assets

Real estate is generally governed by the laws of the country where it is located. This can include rules around registration, transfer, inheritance and security. If your foreign holding company owns property through a local subsidiary, this can affect how you fund, tax and succeed.

IP can create issues. A group may choose to have a dedicated company own their trademarks, patents or software. This needs to be carefully considered as there are considerations around transfer pricing, where development and management occur and the legal ownership. If you move IP to a low tax jurisdiction but it lacks economic substance, this can cause issues with tax authorities.

Investments and cash should be considered. The bank where the account is held, legal ownership and tax residency of the beneficial owner can be relevant. Payments across borders may cause reporting requirements, withholding tax and be looked at under anti money laundering rules. Banks may ask for evidence relating to the source of wealth, source of funds and purpose of transactions. If there are multiple entities and family members involved, they may ask for this information.

While not all assets will fit into one jurisdiction, the aim is to have a clear structure.

Trusts & Foundations

Whilst having a holding company can help you with the corporate ownership, it may not address your family wealth, incapacity or succession concerns. Having a trust or foundation can help with the management of assets across generations. However there can be significant legal differences between jurisdictions.

A trust generally occurs when assets are transferred by the settlor to trustees. The trustees will hold and manage the assets for the benefit of the beneficiaries or for specific purposes outlined in the trust deed. Depending on the governing law and terms of the trust, this can provide continuity of management, specify conditions for distributions and avoid splitting assets between individual heirs. This will depend on the trust being valid, assets being properly transferred and the provisions being enforceable.

A foundation is typically a standalone legal entity created under legislation which allows for assets to be used for specific purposes or beneficiaries. The foundation will have a constitution or charter setting out how it operates and how benefits can be distributed. This can be attractive for families who want a formal structure to manage their family.

Not all trusts and foundations will guarantee that information will remain confidential, neutral on tax and protected from creditors. There could be disclosure requirements, beneficial ownership registers, tax reporting requirements and court orders requesting information. There could also be issues with forced heirship, matrimonial claims and insolvency.

It is important to consider the difference between legal ownership and control. When assets are moved into a trust or foundation, the founder may no longer have the same ownership over the assets. If they have significant control over the distribution of assets, investment decisions or removal of fiduciaries, this may have implications under the relevant law or tax. Families should understand the implications of this before moving control.

Plan for Succession

Often the ownership structure will be revealed to have issues when succession occurs. The founder may own the shares personally, with the children working in different areas of the business or in different countries. Some may wish to grow the business, whilst others want dividends or to sell in the future. Splitting equally may not provide a viable business structure.

You should consider separating economic rights from management control. One family member may be better suited to hold a management role, however other family members may have an interest in the shares. Shareholder agreements can be used to clarify voting rights, transfer, pre-emption rights, deadlock situations and exit. This should be reflected in your company articles and other constitutional documents.

Wills, trusts and foundations can be used alongside your corporate documents. However you should ensure they are carefully drafted. Assets may be governed by your will, however if the shares are held in a separate vehicle they may fall under different rules. If you have property in a foreign jurisdiction, it may be subject to local succession rules. Movable assets may be governed by domicile, habitual residence, nationality and other factors.

If you have family members in the UAE or other jurisdictions with specific succession rules, you should consider what applies. Foreign instruments may not be recognised, there may be registration requirements and there could be conflicts with the governing laws.

A strong plan should also consider incapacity, disputes and unexpected deaths. By having clear appointment processes, independent professionals and agreement on how to resolve disputes, you can ensure you maintain continuity in your business.

Tax, Substance & Transparency

With increasing scrutiny, tax authorities will look at beneficial ownership, related party transactions, cross border payments and profit allocation. Reporting requirements and information exchange requirements have reduced the ability to hide assets behind foreign ownership.

Your holding company should meet the requirements of the tax residency it claims to be and any reliefs sought. If there are transfer pricing requirements, related party transactions should be at arm’s length. The OECD have developed an international tax framework which has influenced national legislation and practices. However the requirements will depend on how the countries implement it.

If your entity is claiming to be providing financing, management or IP functions, this is an important consideration. Considerations could include staffing, decision making, spend, property and activities carried out. Just having a registered office and annual filings may not be enough to show a company is carrying out the activities it is said to.

Consider the cost of compliance. Having multiple entities will mean you will have accounting, tax, company secretarial, banking oversight and regular reviews. Whilst you may save tax in one jurisdiction, you may incur extra costs and reporting requirements in others. Consider the overall impact.

Create a Structure that Will Last into the Next Generation

The most efficient international family business structures are usually not the most complex. Each entity should have a clear purpose, the ownership should be easily tracked and the documents should reflect the true intentions of the family. A holding company should not be created purely because a jurisdiction is popular. A trust should not be set up without understanding the rights being passed on. A foundation should not be seen as a replacement for good corporate governance.

Start by identifying what assets you have, countries you operate in, tax residencies, funding requirements and succession aims. Speak to legal and tax advisors to understand what structures may be suitable. Conflicts with the different jurisdictions can be identified. Consider what the costs will be to implement and manage. Consider what will happen if you need to exit or restructure in the future.

Regular reviews are a key consideration. As family members move, businesses grow, tax laws change and younger generations take on responsibility, your structure may no longer be suitable. A structure which was suitable for your founder in one country may not be suitable for your business now it has foreign subsidiaries.

Ultimately you need to consider how you want your family to own their global assets. You want to mitigate risk, make decisions efficiently and pass wealth between generations without creating unnecessary legal complexity. Whilst the jurisdiction is important, your structure should be of a high quality. This means the companies, trusts, foundations and succession will all work well together.

If a UAE-based business is looking to invest overseas, there are several factors that should be taken into consideration to ensure this can be done correctly.

A UAE entity may wish to invest in a foreign business by purchasing shares, setting up a subsidiary, joint venture, commercial property or intellectual property. As the UAE is a business hub in the region with global banking and investment relationships, it can be a natural home for a business wishing to invest overseas.

However, whilst a business may wish to trade internationally, there may be various corporate, regulatory and tax elements to consider. An investment may seem simple to complete from Dubai or Abu Dhabi, however, you may need to consider corporate approvals, regulatory and tax requirements. The investment may also be dependent on what your UAE company is licensed to do, its constitutional documents, shareholders and the nature of the investment.

You should always consider if the investment is legally allowed, approved and commercially viable.

UAE Entity Approval

The first thing to consider is the legal status of your entity. Depending on your entity being incorporated in a UAE mainland jurisdiction, free zone entity or operating in a financial free zone, there may be different requirements.

Your entity’s trade licence will not always tell you everything you need to know. You should consider the Memorandum and Articles of Association, shareholder arrangements and any relevant regulatory requirements to check whether the investment is permissible. If your entity was set up for a very specific trading purpose, you may need to ensure that it has the capacity to act as a holding or investment vehicle.

Depending on your governance documents, you may need board approval, shareholder approval or other approvals. If your manager/director is signing documents abroad, you should ensure they have the correct approvals and that the documents will be accepted at the destination country.

It is best to consider these requirements before you reach an advanced stage in negotiations. If you are buying from a foreign seller, bank or joint venture partner you may need to provide them with certified constitutional documents, current licence, proof of ownership and correctly executed resolution. This can cause delays and extra costs as you may need to have documents attested, legalised, translated and notarised.

Direct vs Holding Structure

Consider whether you want to invest directly or whether your UAE entity should utilise a holding company in another jurisdiction. If the investment is a simple one, and the country allows foreign ownership, then investing directly may be a good option. This will ensure you can comply with registration, tax and other requirements in the target country.

However, if you expect to purchase multiple businesses, bring in other investors, reduce exposure to the operation and simply want to hold valuable assets, using a holding company may provide some benefits. This can also assist with dividend, shareholder loans and ownership. Whilst there may be many benefits this will depend on what you are doing commercially and what the laws say.

If you are creating a new entity in another country you will need to consider the extra administration. Costs will incur to incorporate, file annually, have local directors, accounting and banking requirements and tax compliance. Consider how decisions will be made, where the management will be based and whether the holding company actually has a business purpose.

If you are creating the holding company purely for tax reasons, you may not get the benefit you are expecting. Tax authorities may look into who really owns the investment, where the effective management is taking place, what the holding company is doing and whether it can benefit from any treaties. If the company is just a shell with no real decision making processes, you may have issues with how the dividends, interest or capital gains are taxed.

Ensure that you are using the correct structure to help with the real purpose of the investment.

Foreign Ownership & Restrictions

Before committing any capital to an investment overseas, a UAE entity should consider what the laws are in the target country. Foreign ownership can vary greatly between different countries. Some countries will allow 100% foreign ownership in most sectors. Others may have restrictions, a requirement to have a local partner or have certain activities only for local investors.

There may be restrictions in place for some strategic industries, financial services, telecoms, natural resources, defence related, agricultural, media or property. You may need to have a licence for a specific industry, approval from an investment body or comply with national security requirements. If you are buying an existing business, you may also need to consider merger control or competition law requirements.

Consider what you are trying to do. Even if the investment is permissible you may need approval to allow the foreign shareholder to vote, appoint directors or transfer funds. Some jurisdictions will have different rules for passive investments.

If the investment is property related, you should consider whether you can own land, commercial property or development assets. This will depend on where it is, your nationality/corporate status, what you intend to do with it and what the title is. If it is a lease, concession or development rights you may not have the same protection.

Speak to your local counsel to understand what restrictions are in place and how long it will take to get approval. If you need regulatory approval, you should consider what will happen if there are delays, rejection or conditional approval in your acquisition documents.

Banking, Source of Funds & Transfers

Even if the investment is legally permissible, you may experience delays if you have not considered your banking requirements. UAE banks and the recipient foreign institution may require you to provide evidence of what the transaction is for, source of funds, ownership of the entity and ultimate beneficial owners.

This could include audited accounts, bank statements, tax records, resolutions, sale and purchase agreement, details of the target business and why you are doing the deal. If the funds are coming from a sale of assets, shareholder contribution, loan or dividend you should be able to show what the transaction is.

Financial institutions will have controls in place to ensure they understand their customers and the transaction they are undertaking based on the risk standards. You may need to consider sanctions, politically exposed persons and enhanced due diligence. Just because you are transferring between two accounts in your name will not mean that you won’t have any issues. The company should not assume that the transfer will be okay.

Ensure that you have enough time in your agreement to pay for the investment. This should allow time for the banks to carry out their checks, foreign exchange and any regulatory approvals. You should ensure that the banks are happy with how you are paying. If you need to go through intermediaries or multiple currencies this should be considered.

If you are using shareholder loans or capital contributions, ensure that you have clear documentation. Ensure that you have clearly defined what is equity, debt, payments for services and distributions. If you are transferring funds informally and stating it is a loan you could have issues with the accounting, tax or regulation if it does not fit.

Tax Considerations

Before finalising your investment structure you should consider the tax implications. A UAE entity may need to consider how foreign income is treated in the UAE. You may also need to consider tax in the country you are investing in. This will depend on what type of income you are getting, what status you have, what legislation applies and any relevant agreement.

The UAE has rules in place around foreign sourced income and participation exemptions. You cannot assume that any dividend or capital gains received from overseas will be exempt. You should consider what type of ownership you have, what holding period applies, what is subject to tax (if applicable) and any other qualifying factors.

In the target country you may have withholding tax on dividends, interest, royalties and service fees. Your foreign subsidiary may also be subject to corporate income tax, indirect tax, payroll and local reporting. If there is a tax treaty in place you should consider whether the relevant entity can benefit from it and if you need to provide any residence certificates, declaration or other documentation.

If you are investing in a related company, ensure that any management fees, financing, royalties or other payments are reflective of what is being provided. You may need to ensure that any related party transactions comply with transfer pricing rules and have documentation to show how they have been decided.

The UAE has rules in place around topping up tax for large multinational enterprise groups. If your group falls within the scope you should consider this. You should also consider the tax rules in the other countries your group operates within.

You should ensure that the structure you have in place will be tax efficient in all relevant jurisdictions. You should also consider how much it will cost to get professional advice and ensure that you are compliant. This should be balanced against what you expect to get from your investment.

Beneficial Ownership & Reporting

When investing overseas you should ensure there is transparency around ownership and control of the entities. Your UAE entity may need to have accurate beneficial ownership information. This will depend on the legal status and what register you are registered with. Any foreign subsidiaries or holding companies may have different registers, thresholds and timelines.

You may need to provide information on ultimate beneficial ownership. This could be anyone who ultimately owns or controls the business either directly or indirectly. This can become more complicated if there are trusts, nominees or multiple layers of ownership across several countries.

There may be reporting requirements that need to be met. If there are changes to shareholders, directors, registered office or beneficial ownership you may need to notify. Some jurisdictions will require annual returns, financial statements, tax declarations and foreign investment disclosure. If you fail to meet these requirements you may incur penalties, restrictions to your filings or issues when selling your investment.

Ensure that you have clear documentation showing the ownership chain, who has the authority to make decisions and supporting documentation. This will help with any regulatory bodies, banks, auditors, tax advisors and potential buyers carrying out due diligence.

Management, Liability & Exit

Ensure that your legal structure reflects how you will manage your investment. If you are taking a minority interest or entering a joint venture ensure that your shareholder agreement has provisions in place for board representation, reserved matters, information access, funding, dividend policy, restrictions and dispute resolution. Without clear contractual protections you may have little influence over decisions affecting the value of your investment.

Consider what liabilities exist with the target business. Are there any outstanding tax claims, employment issues, litigation, regulatory breaches, IP rights or contractual restrictions? If you are purchasing an asset you will likely have less exposure to the company’s obligations, however if you are purchasing shares you will generally be exposed to the company’s obligations depending on the law and contractual protections.

Consider what will happen if you want to exit. There may be foreign ownership restrictions, pre-emption rights, regulatory approvals, capital gains tax and exchange control requirements. Your shareholder agreement should have practical dispute resolution in place. If appropriate there should be provisions in place to handle a sale, buyout or transfer to a third party.

Consider if you want to resolve any disputes locally or through arbitration. What law will apply and can any judgment/award be enforced in the location of the assets? Whilst you may have a clause that looks comprehensive, if it does not consider the jurisdictions you may find it has little practical use.

Overall Risk

The main risk you may face when investing overseas is not that it is prohibited, but that there are multiple factors to consider. You may forget to consider corporate approvals, the bank may ask for further evidence, there may be foreign ownership restrictions or tax assumptions may not be correct.

If you are a UAE business you should have a structured approach and speak to your corporate lawyer, tax advisor, banking contacts and local counsel in the target market. This should ensure that your structure is permissible, you have regulatory approval, the funds can be transferred, tax implications, reporting requirements and exit options.

Ensure that you are not over complicating things. If you are only taking a small minority interest you may not want to over complicate. However, even a small investment may face ownership restrictions, banking issues and unexpected tax costs.

Whilst the UAE can be a great place to expand internationally, the laws in the markets your companies are investing in will still apply. Having a clean structure with clear responsibilities for each entity and factoring in the costs to comply will give you the best transaction.