UAE Introduces Tax Transparency for Holding Companies in Family Foundations
June 3, 2025
An opportunity for high-net-worth families to streamline succession planning and optimise cross-border tax compliance.
The UAE continues to evolve as a global wealth management hub, with its latest reform offering a significant step forward for family foundations and holding structures. The Ministry of Finance has introduced a mechanism allowing holding companies owned by qualifying family foundations to elect tax transparency, aligning local rules more closely with international wealth structuring norms.
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This change is not just administrative—it’s strategic. It gives ultra-high-net-worth individuals, family offices, and private clients a new tool for succession planning, tax optimisation, and cross-border compliance.
What Is Tax Transparency for Holding Companies?
Under the UAE’s corporate tax regime, most entities are taxed at a headline rate of 9% on profits exceeding AED 375,000. However, this new development allows holding companies owned by approved family foundations to opt for “tax-transparent” status, meaning:
- Profits are not taxed at the company level
- Income is attributed directly to the foundation’s beneficiaries
- No corporate tax is payable by the holding company
In effect, the entity becomes a "flow-through" for tax purposes, much like similar vehicles in the UK or US trust and partnership models. This aligns with the UAE’s broader commitment to tax neutrality for legitimate private wealth structures.
Why This Matters for Family Offices and Wealth Managers
At Mosaic Chambers Group, we work with clients who require flexibility, confidentiality, and robust compliance across multiple jurisdictions. This update achieves all three.
1. Enhanced Control and Oversight
By allowing direct income attribution, families retain a clear line of sight over their holdings without triggering difficult corporate tax liabilities or double taxation. This supports long-term family governance and oversight.
2. Streamlined Succession Planning
Transparent holding companies integrate smoothly into wills, trusts, and multi-generational planning tools. It becomes easier to pass on ownership and control while remaining compliant with local laws and international tax expectations.
3. Simplified Tax Filings
Rather than preparing corporate tax returns for each entity, income is reported by the beneficiaries, making annual compliance more manageable and, in some cases, reducing overall administration costs.
What Are the Conditions?
Not every family foundation will automatically qualify for this election. To take advantage of the new rule, the following key conditions must be met:
- The family foundation must be registered and recognised under UAE law
- Transparent status must be elected formally with the UAE Ministry of Finance
- Detailed ownership and income allocation documentation must be maintained
- The structure must be managed from within the UAE
Importantly, these requirements are designed to prevent misuse and ensure that legitimate private wealth structures benefit, while still aligning with OECD transparency standards.
Potential Cross-Border Tax Implications
Families with beneficiaries based outside the UAE must tread carefully. While the UAE may no longer impose corporate tax on the holding company, beneficiaries in other jurisdictions may face tax liabilities based on their share of income, even if distributions haven’t been made. This makes international tax advice essential.
Strategic Planning Opportunity
This reform offers a unique opportunity to:
- Revisit legacy structures that may be inefficient or outdated
- Consolidate ownership across multiple holding entities
- Prepare for future generational transitions with confidence
Whether you're managing a Gulf-based family enterprise or overseeing international assets across Europe, Asia, and the US, this election mechanism gives you a new layer of flexibility, without sacrificing legal clarity or compliance.
Final Thoughts
The UAE’s tax transparency election is more than a technical rule change—it’s a powerful tool for wealth preservation, efficient tax planning, and multi-jurisdictional control. Families and their advisers should review existing structures now to see if this opportunity aligns with their long-term goals.
If you’re advising a UAE-based family foundation—or managing one—now is the time to act. Contact Mosaic Chambers Group to explore how this change could enhance your structure and secure your legacy.
Navigating the UAE Employment Visa Process in 2026 Relocating to the United Arab Emirates for employment offers significant professional and financial opportunities. However, the UAE employment visa process is structured, compliance-driven and time sensitive. Understanding each stage in advance avoids unnecessary delays and protects both employer and employee from regulatory issues. Below is a comprehensive, easy-to-follow guide to the UAE employment visa process as it stands in 2026. Step 1: Securing a Confirmed Job Offer The UAE employment visa process begins with a formal job offer from a UAE-licensed entity. Only an employer registered with the relevant mainland authority or free zone authority can sponsor an employee. The employer becomes the visa sponsor and assumes legal responsibility for: Applying for the work permit Processing the residence visa Ensuring compliance with UAE labour law Covering government application fees (in most cases) Employees cannot independently apply for a standard employment visa without sponsorship. Step 2: Work Permit Application (Entry Permit Approval) Once the employment contract is signed, the employer applies for a work permit (also known as a labour approval) through the Ministry of Human Resources and Emiratisation (MOHRE) or the relevant free zone authority. Documents typically required include: Passport copy (valid for at least six months) Passport-size photographs Signed employment contract Attested educational certificates (if required for the role) If the employee is outside the UAE, an entry permit is issued, allowing them to enter the country legally for employment purposes. If the employee is already inside the UAE on a visit visa, status adjustment procedures apply. Step 3: Entry to the UAE (If Applying From Abroad) For applicants outside the UAE, the entry permit allows legal entry into the country. Once inside the UAE, the individual must complete the residency formalities within the validity period of the entry permit (usually 60 days). Timing is critical at this stage. Failure to complete the process within the permitted window may result in fines. Step 4: Medical Fitness Test All employment visa applicants must undergo a mandatory medical examination at an approved UAE medical centre. The test typically screens for: HIV Tuberculosis Hepatitis (in certain categories) The medical fitness certificate is a mandatory component of the residence visa application. Processing time: usually 24–72 hours depending on service speed selected. Step 5: Emirates ID Biometrics The applicant must apply for an Emirates ID, which serves as the UAE’s official identification card. This process includes: Biometric data capture (fingerprints and photograph) Identity verification The Emirates ID is linked directly to the residence visa and is essential for: Opening bank accounts Renting property Obtaining a driving licence Accessing utilities and telecom services Step 6: Residence Visa Stamping Following medical clearance and Emirates ID application, the residence visa is issued and stamped electronically against the passport record. Employment residence visas are typically valid for: 2 years (mainland companies) 2–3 years (depending on free zone authority) Once issued, the employee is legally resident in the UAE and may sponsor eligible dependants (subject to salary thresholds). Key Considerations in 2026 1. Free Zone vs Mainland Sponsorship Visa procedures differ slightly between mainland entities and free zone authorities. Free zones operate under independent regulatory frameworks, although federal immigration approval remains central. The choice between mainland and free zone employment has broader implications, including: Corporate structuring Tax residency status Social security considerations Family sponsorship options These should be assessed before finalising relocation plans. 2. Employment Visa vs Other UAE Visa Categories The UAE also offers: Green Visas (for skilled professionals and freelancers) Golden Visas (long-term residence for investors and high earners) Investor/Partner Visas For entrepreneurs and senior executives, an employment visa is not always the optimal route. Strategic structuring may offer longer validity and greater flexibility. 3. Tax Residency Implications The UAE does not levy personal income tax. However, relocating professionals must consider: Exit tax implications in their home country UK Statutory Residence Test (for British nationals) Split-year treatment Ongoing ties and centre-of-vital-interests rules Corporate tax exposure for business owners Inadequate pre-departure planning can result in unintended dual tax exposure. 4. Corporate Tax and Employment Structuring With the introduction of UAE Corporate Tax, business owners relocating to the UAE must assess: Whether they will remain directors of overseas entities Permanent establishment risks Substance requirements Intercompany arrangements Employment structuring must align with the broader corporate and tax strategy. Why a Structured Relocation Approach Matters Many professionals treat the employment visa as a simple administrative formality. In practice, it forms part of a much larger relocation framework that includes: Tax residency planning Wealth structuring Asset protection Banking arrangements Property acquisition Family visa coordination A piecemeal approach often creates long-term complications. How Mosaic Chambers Group Supports Your Move to the UAE At Mosaic Chambers Group, we provide integrated advisory services for internationally mobile individuals and entrepreneurs. We coordinate: Pre-departure UK tax planning UAE tax structuring advice Cross-border compliance Local regulatory compliance We work alongside trusted UAE-based partners to manage: Visa processing Company formation Corporate structuring analysis Family sponsorship applications Wealth protection strategies Relocating to the UAE should be strategic, compliant and financially efficient - not reactive. Speak to Our Advisory Team If you are considering accepting a UAE job offer or relocating your business operations to the Emirates, we recommend obtaining professional tax and structuring advice before finalising your move. Early planning protects your position, reduces risk and ensures your move to the UAE is commercially sound and fully compliant. Get in touch with our team today to begin your relocation strategy with clarity and confidence.
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