Offshore Company UAE: Can It Hold Shares in a UAE Company?

An offshore company can be a useful part of a UAE corporate structure, especially when you want one entity to own shares in an operating business. The important point is understanding what the offshore company is allowed to own and what it is allowed to do.

In many cases, an offshore company in UAE can hold shares in another UAE company, including an operating company. The final position depends on the offshore jurisdiction, the legal structure of the company being acquired, its licensed activities and the rules of the authority where that operating company is registered.

This distinction matters. Holding shares in a restaurant company, for example, does not give the offshore shareholder the right to operate the restaurant itself. The restaurant still needs its own UAE licence, premises, approvals and employees.

This guide explains how the structure works and what you should check before setting it up.

What Is an Offshore Company in the UAE?

A UAE offshore company is a legal entity commonly used for holding assets, owning investments, holding shares in other companies, managing intellectual property and carrying out permitted international activities.

Two names you will often come across are RAK International Corporate Centre or RAK ICC and JAFZA Offshore.

RAK ICC is a corporate registry established in Ras Al Khaimah. It specifically lists holding shares in UAE and international entities among the uses of its corporate structures. 

JAFZA Offshore operates under the Jebel Ali Free Zone Authority framework in Dubai. Its offshore regulations expressly permit an offshore company to own a stake in another operating company within the UAE, subject to the relevant rules.

You may also see the phrase offshore company in Dubai used broadly online. Be careful with the wording. A RAK ICC company is registered in Ras Al Khaimah, while a JAFZA offshore company is registered through JAFZA in Dubai.

An offshore company also differs significantly from a mainland or normal free zone business.

A mainland company is primarily designed to conduct licensed commercial activity in the UAE market. A free zone company can carry out activities permitted under its free zone licence and may obtain office facilities and residence visas according to the relevant authority's rules.

An offshore company is generally chosen when the main purpose is ownership, investment or international structuring rather than day-to-day UAE operations.

Can an Offshore Company Hold Shares in a UAE Company?

Yes. An offshore company can hold shares in a UAE company when the proposed structure is accepted by the relevant registrars and licensing authorities.

RAK ICC expressly identifies holding shares in UAE and international entities as one of the uses of its companies. JAFZA's offshore regulations also allow a JAFZA offshore company to own a stake in another operating company within the UAE.

This creates a fairly straightforward holding structure:

1. Individual or overseas investor

2. UAE offshore holding company

3. UAE mainland or free zone operating company

The operating company, often called the OpCo, conducts the actual business. The offshore company sits above it as the shareholder or holding company.

For example, suppose an investor creates a RAK ICC company that owns 100% of an eligible UAE free zone company. The free zone company could hold the commercial licence, rent workspace, hire employees and invoice customers according to its licence. The RAK ICC company holds the shares but does not automatically receive those operating rights.

RAK ICC itself offers a structure built on this principle through its Premium Product. A RAK ICC holding company is established first, followed by a RAKEZ subsidiary that can obtain commercial or service licences.

This gives us an important rule:

Ownership rights and operating rights are separate.

Being the shareholder of a UAE business does not allow the offshore company to start trading in the UAE under the subsidiary's licence.

You also need to check the target company's business activity. UAE law allows broad foreign ownership, but certain activities with strategic impact remain subject to specific ownership or regulatory conditions. The Ministry of Economy and Tourism lists sectors such as banking, insurance, telecommunications and certain security and defence activities among those requiring special treatment. 

How Offshore Ownership Structures Work

The main reason investors place an offshore company above an operating company is to separate ownership from daily operations.

Consider a simple example.

You want to launch a technology business in Dubai. Instead of owning the operating company personally, you establish a RAK ICC holding company. The RAK ICC entity then becomes the shareholder of your Dubai free zone company.

The free zone entity signs customer contracts, employs the team and conducts the licensed activity. The offshore entity owns the equity.

A group may use this structure to:

• Centralise ownership of several companies

• Hold shares in UAE and overseas subsidiaries

• Separate investment assets from operating activities

• Organise joint ownership between several investors

• Hold intellectual property separately from the operating company

• Make future corporate restructuring easier

• Create a clearer succession or estate-planning structure

For larger business groups, one holding company may own several operating companies.

The idea is already common in UAE free zones. For example, DMCC accepts corporate shareholders and requires additional corporate documentation where an existing company owns the new entity. Nexture's DMCC company setup guide explains how corporate shareholding works within that free zone.

Do not assume every free zone or mainland activity will accept the same ownership chain without additional documents. Check the proposed shareholder with the target authority before forming the offshore entity.

Requirements for Setting Up an Offshore Company

The exact requirements depend on whether you choose RAK ICC, JAFZA Offshore or another eligible structure.

For a RAK offshore company, incorporation must be processed through a registered agent. RAK ICC states that an International Business Company can be incorporated through its registered-agent network, with incorporation possible within two working days after a complete submission. 

RAK ICC currently allows a minimum of one shareholder and up to 50 shareholders. Its Business Companies Regulations also require at least one director.

Documents for Individual Shareholders

You will commonly be asked for:

• Valid passport copy

• Proof of residential address

• Shareholder and director details

• Professional or business background information

• Proposed business activity

• Source-of-funds or KYC information where requested

• Completed incorporation forms

• Memorandum and Articles of Association

• Ultimate beneficial owner information

Additional documents may be requested depending on the applicant's nationality, residence, business activity and compliance profile.

Documents for Corporate Shareholders

• If another company owns the offshore entity, the documentation is usually more extensive.
• You may need:

• Certificate of Incorporation

• Memorandum and Articles of Association

• Certificate of Good Standing or registry extract

• Certificate of Incumbency where applicable

• Board resolution approving the new company

• Ownership structure chart

• Ultimate beneficial owner details

• Passport copies of directors and beneficial owners

• Power of attorney where a representative is appointed

Foreign corporate documents may also require notarisation, legalisation or attestation depending on the authority and document origin.

You can read Nexture's guide to the UAE Memorandum of Association and corporate shareholder documents for a closer look at ownership documentation.

What Does a RAK Offshore Company Cost?

The RAK offshore company cost is worth separating into government charges and professional charges.

RAK ICC's official 2026 fee schedule lists:

These are RAK ICC registry fees, not necessarily your complete formation cost. Registered-agent fees, registered-address services, document preparation, attestation, banking support and other services can increase the final price. RAK ICC 2026 Fee Schedule.

Request an itemised quotation rather than comparing offshore companies using one advertised package price.

Offshore vs Mainland and Free Zone Companies

The right option depends on what the company actually needs to do.

JAFZA itself offers both operating free zone entities and offshore companies, so do not confuse the two. Nexture's JAFZA company setup guide explains the operating structures available within Jebel Ali Free Zone.

If you need employees, office space and active UAE operations, a mainland or suitable free zone company will usually make more sense than using an offshore entity alone.

Benefits and Limitations of UAE Offshore Companies

Benefits

One major benefit is centralised ownership. Instead of individuals personally owning several businesses, one corporate shareholder can sit above them.

It can also provide continuity. The holding company continues to own its subsidiaries even if its own shareholders change, subject to the relevant transfer and reporting rules.

Offshore structures can also have lower physical overheads than operating companies because they generally do not need conventional commercial premises or employee visa allocations.

They are also useful for people who do not plan to relocate immediately. If that describes your situation, Nexture's guide to starting a UAE company as a non-resident covers the wider ownership options.

Limitations

An offshore company is not a cheap substitute for a UAE operating licence. If you want to open a shop, employ staff, provide regulated services or run an active business in the UAE, you normally need a properly licensed operating entity.

Banking also needs planning. Incorporation does not guarantee a corporate bank account. Banks carry out their own KYC, AML, source-of-funds and commercial-purpose checks.

The same applies to ownership approval. A perfectly valid offshore company may still need additional documentation before a particular mainland authority or free zone accepts it as a corporate shareholder.

Key Considerations Before Setting Up an Offshore Company

Start with the ownership structure.

Decide what the offshore company will own and which authority regulates the subsidiary. Confirm the authority's corporate shareholder requirements before paying incorporation fees.

Next, identify the ultimate beneficial owners. UAE beneficial ownership rules require companies to maintain and disclose relevant ownership information to the competent authorities. 

Tax planning deserves the same attention. Do not assume that the word “offshore” means automatic exemption from UAE Corporate Tax. The Federal Tax Authority states that juridical persons incorporated or otherwise established or recognised in the UAE generally fall within the UAE Corporate Tax residency rules. Tax treatment then depends on the entity, income and available exemptions or reliefs.

Domestic dividends and qualifying participation income may receive favourable treatment under the Corporate Tax rules, but the conditions need to be checked properly.

Taxable persons must also consider Corporate Tax registration requirements given in FTA Corporate Tax registration guidance.

Conclusion

An offshore company in UAE can hold shares in a UAE company, and shareholding is one of the main reasons these structures are created.

RAK ICC expressly supports holding shares in UAE and international entities. JAFZA's offshore regulations also permit an offshore company to own a stake in another operating company within the UAE.

The approval still depends on the target company's jurisdiction, business activity and ownership rules.

Before forming the offshore company, map the complete structure first. Check which entity will hold the licence, where employees will be sponsored, which company will open the operating bank account, how UBO information will be reported and how Corporate Tax rules apply.

Frequently Asked Questions