RAK ICC

RAK ICC as a Holding Company Vehicle

2026-05-13 · 6 min read · By Aureus Worldwide

Using a RAK ICC holding company to sit at the top of a group is one of the most common reasons entrepreneurs and families turn to the RAK International Corporate Centre. The offshore company limited by shares is well suited to owning shareholdings, intellectual property, real estate and investments in a single, confidential, 100%-foreign-owned vehicle. This guide explains why a RAK ICC holding company works, how to think about Corporate Tax and economic substance honestly, and where the structure's limits lie, because the biggest mistakes with holding companies come from assuming that "offshore" means "outside the rules".

What a holding company does, and why RAK ICC suits it

A holding company does not trade. Its job is to own things: shares in subsidiaries, a portfolio of investments, a family's intellectual property, or real estate. It centralises ownership, simplifies succession, and creates a clean layer between the people at the top and the operating businesses below.

A RAK ICC company limited by shares fits this role well because it offers:

• 100% foreign ownership with no local shareholding requirement
• A single vehicle to consolidate disparate assets and shareholdings
• Confidentiality, because owners are not listed on a public register
• Currency and structuring flexibility, with shares issuable in any major currency and multiple share classes available
• Jurisdictional neutrality for holding assets and subsidiaries across borders

The legal form here is the ordinary RAK ICC company limited by shares; "holding company" describes what you use it for, not a separate company type.

What a RAK ICC holding company typically holds

• Shares in operating subsidiaries, in free zones, on the mainland (where permitted) or in other countries
• Intellectual property, trademarks, patents and licences managed centrally
• Investment portfolios, private equity stakes, securities and similar assets
• Real estate, in designated areas, subject to the relevant land department's approval
• Other RAK ICC entities, such as SPVs beneath the holding layer

Above the holding company, families frequently place a RAK ICC Foundation, so that the foundation owns the holding company and the holding company owns everything else. This separates control, ownership and succession in a deliberate, durable way.

The Corporate Tax reality, read this carefully

This is where careful, honest analysis matters most, because a persistent myth holds that offshore companies are outside UAE Corporate Tax. They are not automatically outside it.

A RAK ICC company is incorporated in the UAE. Under the UAE Corporate Tax regime, a juridical person incorporated in the UAE is generally a Resident Person, and therefore within the scope of Corporate Tax. The headline position is 0% on taxable income up to AED 375,000 and 9% above that. Two points follow that are frequently misunderstood:

1. The free zone 0% regime does not automatically apply. The Qualifying Free Zone Person 0% rate is designed for free zone licensees. RAK ICC is an offshore registry, not a free zone, so a RAK ICC company should not assume QFZP treatment.
2. A holding company can still be efficient, through the right reliefs, not through being ignored. The UAE Corporate Tax law contains a participation exemption that can exempt dividends and capital gains from qualifying shareholdings, subject to conditions such as minimum ownership and holding period. Dividends can also benefit from relief. Whether these apply depends on the facts.

The practical takeaway: a RAK ICC holding company should register for Corporate Tax where required and assess its position properly, rather than assume exemption. Our tax team does exactly this analysis. For the wider offshore tax picture, see the RAK ICC offshore guide.

Economic substance for holding companies

Holding company business is a Relevant Activity under the UAE Economic Substance Regulations. The good news for pure holding structures is that a company whose only activity is holding equity participations and earning dividends or capital gains is generally subject to a reduced substance test, broadly, it must comply with its filing obligations and have adequate people and premises for the limited activity of holding. If the company does more than hold equity, for example, actively managing IP or providing services, a fuller substance test can apply. The right answer depends on what the company actually does, so map the activities before assuming the reduced test applies. Our ESR reporting service works through this.

Banking and administration

The company is usually quick to form, but banking is the demanding part. Banks will want to understand the structure's purpose, its ownership all the way up to the ultimate beneficial owners, and the source of funds. A holding company with a clear rationale, clean documentation and proper accounting is far easier to bank than an opaque one. Ongoing, the company must be renewed annually through its registered agent, keep its registers and UBO information current, and maintain accounting records, our accounting and UBO consulting teams keep this on track.

A layered structure in practice

A typical family holding structure has three tiers. At the top sits a RAK ICC Foundation, which owns itself and carries the succession plan. Beneath it sits the RAK ICC holding company, which owns the group's shareholdings. At the base sit the operating and asset-holding entities, free zone or mainland companies that actually trade, plus any property or IP vehicles. Structured this way, operating risk stays at the bottom, ownership is consolidated in the middle, and succession and control are governed at the top. Each layer has a distinct job, and the holding company is the hub that ties ownership together while keeping the trading risk at arm's length from the family's wealth.

What a holding company cannot do

It is worth being blunt about the limits:

• It cannot trade inside the UAE mainland or lease ordinary onshore premises, it is a holding vehicle, not an operating one. If you need to operate onshore, you need a free zone or mainland licence; our RAKEZ company setup guide covers the free zone route.
• It does not grant residence visas by itself.
• It does not create tax exemption simply by existing, the analysis above still has to be done.
• It does not defeat legitimate creditor or tax claims; see RAK ICC for asset protection for where the real boundaries sit.

Is a RAK ICC holding company right for you?

It tends to suit those who want to consolidate cross-border shareholdings, hold IP or investments centrally, and plan succession, while accepting that the vehicle is for holding, not trading, and that UAE Corporate Tax, substance and UBO rules all apply. It tends not to suit those who need to operate, invoice or employ within the UAE, who are better served by an onshore structure, sometimes alongside an offshore holding layer. Many groups use both.

How Aureus Worldwide can help

Aureus Worldwide helps clients decide whether a RAK ICC holding company fits their group, and coordinates its formation through licensed registered agents via our company formation team. Our core value is the ongoing work: proper accounting, a rigorous Corporate Tax assessment including any participation exemption, economic substance analysis, and UBO reporting. Aureus is a Dubai-based accounting and advisory firm, it is not a law firm and does not provide legal, trust or fiduciary advice, so we work alongside your legal counsel and registered agent and confirm the registry's changeable rules before you commit. To structure a holding company, contact us.

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