Best Jurisdictions for Holding Companies in 2025: Why UAE Leads the Way
In today's globalized business environment, selecting the right jurisdiction for a holding company is critical for ensuring tax efficiency, legal protection, and strategic market access. With increasing tax regulations in Western economies, businesses and high-net-worth individuals are seeking stable and tax-friendly jurisdictions.
Among the top contenders, the UAE has emerged as the leading jurisdiction for holding companies, offering 0% corporate tax in Free Zones, robust financial infrastructure, and a highly business-friendly environment.
What is a Holding Company?
A holding company is a business entity that owns shares in other companies without engaging in direct operations such as manufacturing or trading. Holding companies serve as a strategic tool for asset protection, tax optimization, and business expansion.
Types of Holding Companies
| Type | Description |
|---|---|
| Pure Holding Company | Exists solely to own shares in subsidiaries without conducting operations. |
| Operational Holding Company | Owns subsidiaries and provides management, finance, or administrative services. |
| Financial Holding Company | Focuses on investing in financial assets, such as banking, insurance, or wealth management. |
| Mixed Holding Company | Engages in both investments and business operations across various industries. |
OECD Guidelines on Corporate Structures
Why Holding Companies Matter in 2025
The right holding company jurisdiction provides multiple benefits, including:
✔ Tax Optimization – Minimize tax liabilities through strategic planning.
✔ Legal Protection – Separate legal entities to protect assets and limit liabilities.
✔ Market Expansion – Facilitate international business operations efficiently.
✔ Confidentiality & Privacy – Many jurisdictions offer corporate anonymity and non-disclosure benefits.
🔎 Key Insight: With tightening tax regulations in the UK, EU, and USA, businesses are moving their holding structures to more tax-efficient jurisdictions like the UAE, Switzerland, and Singapore.
Top 10 Jurisdictions for Holding Companies in 2025
| Jurisdiction | Corporate Tax | Tax Benefits | Ideal For |
|---|---|---|---|
| 🇦🇪 UAE (Dubai, Abu Dhabi) | 0% (in Free Zones) | Full foreign ownership, no withholding tax, extensive tax treaties | Global investors & entrepreneurs |
| 🇺🇸 Delaware, USA | 0% (state tax on foreign revenue) | Strong corporate laws, no state corporate tax on out-of-state income | US-based businesses & tech startups |
| 🇸🇬 Singapore | Up to 17% | Territorial tax, no capital gains tax, global trader incentives | Asian market-focused businesses |
| 🇳🇱 Netherlands | 15%-25.8% | Tax-free dividends for EU operations, strong IP protection | European corporate structures |
| 🇨🇭 Switzerland | 8.5%-12% | Holding company tax exemption, strong financial sector | Wealth management & family offices |
| 🇱🇺 Luxembourg | 24.94% | Holding company-friendly tax treaties, EU market access | Multinational corporations |
| 🇭🇰 Hong Kong | 16.5% | No tax on foreign-sourced income, Asia business hub | China & Asia-focused investments |
| 🇨🇾 Cyprus | 12.5% | EU membership, IP tax incentives, non-domicile tax regime | European investors & businesses |
| 🇲🇹 Malta | 35% (Effective 5%) | Tax refund system reduces effective tax rate, EU market access | EU-based holding structures |
| 🇬🇧 United Kingdom | 19-25% | Substantial shareholding exemption, access to financial markets | UK investors & multinational corporations |
World Bank’s Ease of Doing Business Report 2025
1. Why UAE is the Best Jurisdiction for Holding Companies in 2025
The United Arab Emirates (UAE) offers unmatched advantages for holding companies, making it the #1 choice for UK investors, digital entrepreneurs, and global businesses.
🔹 0% Corporate Tax in Free Zones
🔹 No Personal Income Tax
🔹 Full Foreign Ownership in Free Zones
🔹 No Restrictions on Profit Repatriation
🔹 Strong Banking System with International Access
🔹 Bilateral Tax Agreements with Over 100 Countries
Comparing UAE vs. Other Popular Jurisdictions
| Feature | UAE (Dubai, Abu Dhabi) | UK | Switzerland | Singapore |
|---|---|---|---|---|
| Corporate Tax Rate | 0% (in Free Zones) | 19-25% | 8.5%-12% | Up to 17% |
| Foreign Ownership | 100% (in Free Zones) | 100% | 100% | 100% |
| Tax on Dividends | 0% | Yes | Yes | Yes |
| Capital Gains Tax | 0% | Yes | Yes | No |
| Confidentiality & Privacy | High | Moderate | High | Moderate |
International Tax Competitiveness Index 2025
2. Delaware, USA
Delaware has long been recognized as one of the most business-friendly states in the U.S., thanks to its well-established corporate laws and strong legal protections. It operates under the Delaware General Corporation Law (DGCL), a highly flexible and business-oriented legal framework that attracts multinational corporations. The Delaware Court of Chancery further enhances its appeal, as it specializes in corporate law, ensuring swift resolution of business disputes.
Tax Benefits:
✔ No corporate income tax on revenue earned outside of Delaware
✔ No state sales tax
✔ Minimal regulatory and reporting requirements
⚠ However, federal corporate income tax may still apply
3. Singapore
A global financial powerhouse, Singapore offers an exceptional regulatory environment, making it an ideal hub for holding companies. With its political stability, tax-friendly policies, and world-class infrastructure, the city-state provides access to a dynamic economy and an extensive network of trade and investment treaties.
Tax Benefits:
✔ Corporate tax rate capped at 17%, with incentives reducing it further
✔ Territorial taxation—foreign-sourced income is tax-exempt under certain conditions
✔ Various tax incentives, including the Global Trader Programme (GTP) and Finance and Treasury Centre incentives
"Singapore’s combination of low taxes, financial security, and international connectivity makes it one of the best choices for holding companies seeking regional expansion." – Paul Tan, Senior Tax Consultant, Asia-Pacific Holdings
4. Netherlands
The Netherlands is a leading European jurisdiction for holding companies, offering tax efficiency, business stability, and an extensive treaty network. Its participation exemption regime allows companies to receive dividends and capital gains tax-free, making it a preferred destination for multinationals.
Tax Benefits:
✔ Corporate tax rate: 15% on profits up to €395,000, then 25.8% for higher earnings
✔ Participation exemption ensures tax-free dividends and capital gains
✔ EU membership facilitates seamless cross-border business
While taxation is favorable, substance requirements (such as local employees and management) must be met to benefit from tax exemptions.
5. Malta
Malta provides a strategic location within the EU, a stable economy, and a competitive tax regime, making it an attractive choice for European and international holding structures. Its tax refund system significantly reduces effective corporate tax rates.
Tax Benefits:
✔ Standard corporate tax rate 35%, but refundable tax credits lower it to an effective rate of 5%
✔ Participation exemption on dividends and capital gains from qualifying subsidiaries
✔ Extensive network of double taxation treaties
🔎 Fact: Malta ranks among the top 10 EU jurisdictions for foreign direct investment due to its business-friendly taxation policies.
6. Luxembourg
A premier financial center, Luxembourg offers a robust holding company regime, with tax-efficient structures for multinational corporations and investment funds. It is especially attractive for businesses looking to manage intellectual property (IP) rights or private equity investments.
Tax Benefits:
✔ Standard corporate tax rate: 24.94%
✔ Favorable participation exemption regime
✔ Comprehensive tax treaty network to minimize withholding taxes
Despite its favorable tax environment, Luxembourg imposes strict compliance regulations, requiring holding companies to demonstrate real business activity.
7. Hong Kong
Hong Kong remains a leading gateway to Asian markets, offering a simple tax regime, financial stability, and international connectivity. It follows a territorial taxation system, meaning foreign-earned income is not taxed.
Tax Benefits:
✔ Corporate tax rate: 16.5%
✔ No capital gains tax, withholding tax on dividends, or VAT
✔ Well-developed financial and legal system
8. Switzerland
Switzerland is known for its political neutrality, banking security, and investor-friendly policies. The Swiss holding company regime provides attractive tax advantages, particularly for international investments.
📌 Tax Benefits:
✔ Federal corporate tax rate: 8.5%-12% (varies by canton)
✔ No withholding tax on dividends paid to EU-based companies under EU-Swiss agreements
✔ Strong privacy laws
🔎 Authority Source:Swiss Federal Tax Administration
9. Cyprus
Cyprus has a low corporate tax rate, EU membership, and extensive tax treaties, making it a prime jurisdiction for holding companies engaged in European and Middle Eastern markets.
Tax Benefits:
✔ Corporate tax rate: 12.5%
✔ Participation exemption and IP Box regime
✔ Non-Domiciled tax regime for foreign investors
Substance requirements must be met to benefit from tax incentives.
UK Investors: Why Relocating Holding Companies to UAE Makes Sense
With the UK increasing tax rates for high-net-worth individuals and businesses, UK investors are moving their holding structures to the UAE.
"With UK tax rates on the rise, UAE provides a tax-efficient alternative for wealth preservation and corporate structuring." – James Turner, CEO of Offshore Wealth Advisory.
FAQs: Holding Companies & UAE as the Best Jurisdiction
1. Why is UAE better than the UK for holding companies?
UAE offers 0% corporate tax, no capital gains tax, and full foreign ownership in Free Zones, making it significantly more tax-efficient than the UK.
2. Is it legal to move a holding company to UAE?
Yes, the UAE’s redomiciliation laws allow companies to relocate without legal complications.
3. Do I need a physical office for a UAE holding company?
No, UAE Free Zones allow virtual offices, making it easy for international investors.
4. How much does it cost to set up a holding company in UAE?
Starting at AED 15,000, depending on Free Zone selection and business structure.
5. Can I get a UAE residency visa with a holding company?
Yes, holding company owners qualify for a 2–10 year UAE Golden Visa.
📌 Need a UAE Holding Company? 👉 Consult Affinitas DMCC Today
Final Thoughts: Why UAE is the #1 Holding Company Destination
- 0% Tax Benefits in Free Zones
- World-Class Banking & Investment Infrastructure
- Full Foreign Ownership & Market Access
- Residency & Wealth Protection for UK Investors
🚀 Get started today! 👉 Set Up Your UAE Holding Company with Affinitas DMCC
