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.
Contact us
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.
Dubai Courts has made a groundbreaking move by opening its first international hub in London, creating an official route for UK-based clients to access Dubai legal services without boarding a plane. Backed by Dubai Chambers and managed by Al Burj Holding, the launch of Dubai Hub London marks a bold step in Dubai’s global legal and commercial expansion. The timing couldn’t be better: with Dubai topping global charts for foreign direct investment, the emirate is clearly serious about its international offering. Why this matters This isn’t just a pop-up office, it’s a statement of intent. For UK investors, law firms, and businesses with interests in the UAE, the benefits are immediate: Direct access to Dubai legal services from central London Faster processing of contracts, cases, and licences Removes the friction of cross-border legal support Strengthens UK–UAE investment and legal ties What the Dubai Hub London offers If you’re advising clients who operate in or are entering the Dubai market, here’s what’s now available without leaving the UK: Legal Services (Dubai Courts) Document certification, notarisation, and signature verification Wills and contracts for non-Muslims Remote court case registration and hearing participation Legal translation and attestation services Business & Property Services Dubai property valuation and document amendments via the Dubai Land Department Trade licence registration, renewals and amendments through the Department of Economy & Tourism Residency, visa and ID support for investors and entrepreneurs via the General Directorate of Residency and Foreigners Affairs What’s behind this move? The hub is part of Dubai’s wider D33 economic agenda, aimed at attracting foreign capital and simplifying access for global investors. As Mohammad Ali Rashed Lootah, President and CEO of Dubai Chambers, put it: “This is a strategic move to make Dubai more accessible to international investors and position the city as the world’s most dynamic business hub.” Benefits at a glance One-stop access to Dubai legal, commercial, and immigration services Increases confidence for UK-based businesses engaging with the UAE Reduces delay and red tape for those managing Dubai-related legal matters Opens up new routes for foreign investment in Dubai from London Forges a more connected, functional UK–UAE legal and economic relationship How can we help? Mosaic Chambers Group offers strategic, end-to-end support for clients using Dubai Hub London. We help interpret complex UAE legal procedures, prepare and submit documentation, and represent you from start to finish and beyond. Whether you're registering a business, handling property matters, relocating or trying to understand cross-border compliance, we ensure everything is handled accurately, efficiently, and in line with both UK and Dubai requirements. Our team works closely with Dubai-based professionals to deliver a joined-up, seamless experience, saving you time, reducing risk, and offering peace of mind.
From April 2026, Business Property Relief (BPR) and Agricultural Property Relief (APR) will be capped at £1 million per individual. Learn what’s changing, how trusts are affected, and what action to take now to minimise inheritance tax.