Holding is a firm or a joint-stock company that owns a part or all of the shares (in most cases, a controlling interest) of other companies under its control and controls their activities. The main function of the holding is to manage the companies, structuring the work of the units, as well as minimizing taxation.
Today, holdings are the best structural option for large companies, since they cover a wider client audience, and combining the activities of all organizations in the holding, provide a wider range of products and services. And since there is a high level of competition in the market, uniting different branches of companies and commercial niches, which in most cases are located in different regions or countries, they have an excellent opportunity for more extensive activity and, accordingly, higher profit and productivity.
Why holdings with a management center in the UAE - the best option for your business
Firstly, the UAE is one of the most successful countries with a loyal legislative base. Since they have agreements with most countries of the world to avoid double taxation, the holding management center in the Emirates makes available legal ways to optimize the taxation of your business and minimizes risks when using tax optimization schemes.
Secondly, while the management of the holding company is located in the UAE, subsidiaries in other countries pay taxes at preferential rates, which protects your company at the international level and optimizes the taxation system. Depending on the purpose and scope of the company, be it real estate, international services or trade operations, there are different options for building holdings structures.
The creation of the UAE-Austria holding gives you the right to receive a zero-percent tax rate on profits.
This is due to the Austrian tax law and the Emirates' agreement with 111 countries around the world on the abolition of double
taxation. Thus, you significantly reduce your company's taxes in Austria, which can be either a parent or a subsidiary for the UAE.
For example, consider the following option. You own a company that is registered in the Emirates and at the same time owns a holding company in Austria. At the same time, subsidiaries are located in countries such as Great Britain, Ukraine, Kazakhstan and Russia and pay dividends. In the case of a parent company in Austria with a capital interest of more than 10% for more than 1 year, the percentage of dividend payments of subsidiaries is:
-0% in the UK, as in this country the payment of dividends at the source of income is not subject to taxation;
-holding of 5% tax in Russia, Ukraine and Kazakhstan;
- According to Austrian law, the local holding company is exempted from paying taxes on profits from dividends.
The biggest plus lies in the distribution of dividends to the Austrian company under this tax scheme. Transferring dividends to the company's account in the UAE, the tax on this income is paid by the recipient country. Since companies in the Emirates are tax free, making profit from an Austrian company, revenue is redirected immediately to the account of the company's founder. Thus, you receive 100% of the profit from the Austrian company to your account (since individuals in the UAE are also exempt from taxes), and subsidiaries in other countries pay taxes at the lowest preferential rates.
Unfortunately, it is quite difficult to build a business in Ukraine, taking into account high tax rates and
practically absent tax benefits. But there is a variant of optimization of taxation by means of construction of the next holding:
on the territory of Ukraine to place a subsidiary company, and in the United Arab Emirates - the parent company. Since the Emirates
does not have taxes on personal income and corporate tax, and Ukraine is one of 111 countries with which the Emirates signed a treaty
on the abolition of double taxation, the creation of the Ukraine-UAE holding will help you reduce the tax burden on your company and
guarantee the protection of your capital entrepreneur.
The scheme is that the income of the parent company in the UAE is interest, dividends and royalties from a subsidiary of the Ukrainian company, but taking into account the absence of tax in the Emirates, the company pays taxes only in Ukraine and then on special benefits. We would like to draw your attention to the fact that for the creation of the Ukraine-UAE holding, you must be a resident of the Emirates officially, and for this you need to register a company on the territory of the country.
In 2012, an agreement on the promotion and mutual protection of capital was signed between the two states. Under this agreement, you are protected from compulsory withdrawal of income, if the investor fulfills its tax obligations and provides you with the right without obstacles to the import and export of capital. For example, a company in the Emirates owns a company in Russia, for which real estate is issued. If you invest through a company in the UAE, you can protect your assets in Russia from seizure by raiders, because in this situation your interests are protected at the international level.