Understanding New SPV and Holding Company Licenses in DMCC

New DMCC SPV and Holding Company Business Licenses

Introduction

The Dubai Multi Commodities Centre (DMCC) has introduced two new license categories: the Special Purpose Vehicle (SPV) and the Holding Company. These structures provide individuals, families, and businesses with cost-effective and flexible ways to manage assets, organize investments, and oversee group operations without the burden of maintaining a traditional office space. In this article, you’ll learn what SPVs and Holding Companies are, why these new licenses matter, their benefits, costs, and tax implications, as well as how LYLAW can help you navigate the legal process.

What is an SPV?

A Special Purpose Vehicle (SPV) is a company created to hold and manage assets. It does not engage in day-to-day business activities but instead provides a protective legal framework to limit liability and separate risks.

SPVs are often used to hold:

  • Real estate
  • Shares or investments
  • Intellectual property
  • Structured finance assets

By separating ownership and risk, SPVs make it easier for investors and families to structure assets without exposing themselves to unnecessary liabilities.

What is a Holding Company?

A Holding Company is designed to own and manage subsidiaries, businesses, or investments. Its primary role is not to trade or provide services but to centralize governance and protect assets.

Common uses include:

  • Managing companies and group operations
  • Overseeing succession planning and wealth preservation
  • Providing centralized compliance and governance
  • Improving tax and cost efficiency

This makes Holding Companies particularly attractive for family businesses and multinational groups.

Key Benefits of SPV and Holding Company Licenses in DMCC

DMCC’s introduction of these licenses is significant because they reduce barriers that once limited such structures to select free zones like DIFC, ADGM, JAFZA Offshore, and Meydan.

Some of the standout benefits include:

  • No physical office lease required (a DMCC-registered address is still mandatory)
  • Lower startup and ongoing costs
  • Faster incorporation due to limited operational scope
  • Recognition under international corporate governance standards
  • Tailored solutions for family offices, investment vehicles, property owners, and global groups

Comparative Costs: New DMCC Licenses vs. Standard Company Setup

Setting up an SPV or Holding Company in DMCC is significantly cheaper and simpler than a standard DMCC entity.

Category SPV / Holding Company License Regular DMCC Company
License Fee From AED 3,690 AED 10,000–15,000
Office Requirement No physical office (virtual address allowed) Physical office lease required
Visa Eligibility Usually no visas, unless needed Visa packages often included
Activities Non-operational (asset holding only) Operational (trading, consulting, services, etc.)
Setup Time Faster Slightly longer

Note: Extra costs apply for legal drafting, opening bank accounts, and compliance filings.

What It Takes to Form a Company in the UAE

Generally, forming a company in the UAE involves several steps: choosing a legal structure, leasing office space, meeting minimum capital requirements, applying for a license, securing approvals, setting up immigration if visas are needed, and complying with ongoing requirements such as audits and renewals.

For many operational businesses, this process is worthwhile. But for those simply looking to hold property, manage investments, or structure family wealth, the new SPV and Holding Company options offer a much simpler route.

Corporate Tax Implications

With the UAE’s Federal Decree-Law No. 47 of 2022 on corporate tax, all companies are now subject to taxation, including those in free zones. However, DMCC entities may still qualify for a 0% corporate tax rate, provided they carry out qualifying activities and restrict onshore UAE dealings.

This makes SPV and Holding Company structures not only cost-effective but also tax-efficient—an important factor for investors and families consolidating wealth.

How can LYLAW help with legal representation for SPV and Holding Company setups?

The launch of these new licenses is a game-changer for anyone looking to protect assets, plan succession, or streamline group management in the UAE. However, the setup still requires careful legal navigation to ensure compliance with DMCC regulations and UAE’s broader corporate tax framework.

At LYLAW, we help clients evaluate whether SPVs or Holding Companies suit their goals, draft the necessary documentation, and guide them through the DMCC registration and compliance process. With our expertise in UAE corporate law, we ensure your structure is both legally sound and strategically aligned with your objectives.

Changes to JAFZA Offshore Regulations

In 2023, the Jebel Ali Free Zone Authority (JAFZA) introduced notable amendments to its offshore company framework. The JAFZA Offshore Companies Regulations 2023 replaced key provisions of the previous 2018 Regulations, most significantly revising Article 14, which historically restricted JAFZA offshore companies from conducting business within the United Arab Emirates (UAE).

These changes reflect a regulatory shift that expands the types of activities JAFZA offshore entities may undertake, including potential engagement in onshore business operations, subject to licensing and regulatory approvals.

Background: Prohibited vs. Permissible Activities under the 2018 Regulations

Under the JAFZA Offshore Companies Regulations 2018, Article 14.1 expressly prohibited offshore companies from:

  • Directly carrying out any commercial activity in the UAE,
  • Holding a lease for UAE property (except in designated freehold areas),
  • Conducting banking, insurance, or other regulated financial services,
  • Engaging in any activity restricted by the Authority.

At the same time, Article 14.2 carved out certain exceptions, allowing JAFZA offshore companies to:

  • Engage UAE-based legal, accounting, and consulting services,
  • Maintain books and records within the UAE,
  • Hold director or shareholder meetings in the UAE,
  • Own property in designated freehold areas,
  • Own shares in UAE operating companies,
  • Open UAE bank accounts.

Article 14.3 allowed offshore companies to engage in business activities in the UAE—but only with the appropriate license from the competent authorities.

2023 Amendments: Key Changes to Article 14

The Offshore Companies Regulations 2023 revise Article 14 in a way that significantly alters the earlier restrictions.

Now, under Article 14.1, an offshore company:

“shall be permitted to conduct lawful business activities as permitted by the Registrar from time to time.”

This marks a clear departure from the previous blanket prohibition. The new provision implies that offshore companies may now carry out business activities in the UAE, provided such activities are:

  • Lawful under UAE law,
  • Permitted by the JAFZA Registrar, and
  • Licensed or authorized by competent authorities, where applicable.

The revised Article 14.2 continues to allow the engagements previously permitted—such as owning shares, holding property, and maintaining bank accounts—while Article 14.3 reiterates the requirement for appropriate licenses or permits for any business activities conducted in the UAE.

Comparison Table: Article 14 Under Old vs. New Regulations

Aspect 2018 Regulations 2023 Regulations
General Business Activity in UAE Explicitly prohibited unless licensed under Part 17 Permitted, subject to Registrar approval and relevant licensing
Leasing UAE Property Not permitted unless in designated freehold areas and for registered office use Permitted for use as a registered office in designated freehold areas
Owning Property in UAE Permitted only in designated freehold areas Same provision retained
Banking and Insurance Activities Explicitly prohibited No explicit reference; assumed to remain restricted without appropriate licensing
Engagement with UAE Advisors Permitted to engage legal, accounting, and management services in UAE Same provision retained
Maintaining Records in UAE Permitted Same provision retained
Holding Director or Member Meetings Permitted Same provision retained
Owning Shares in UAE Companies Permitted Same provision retained
UAE Bank Accounts Permitted Same provision retained
Licensing Requirement Required license from competent authority to conduct business in the UAE Licensing or permits still required for certain activities

Implications for Offshore Entities

The amended Article 14 provides greater flexibility for JAFZA offshore companies by removing the general prohibition on UAE-based commercial activity. Instead of a blanket restriction, the approach now reflects a permit-and-license model, contingent on:

  • The nature of the business activity,
  • The Registrar’s discretion, and
  • Approvals from competent UAE regulators.

While onshore engagement is now more accessible, companies must still navigate applicable regulatory and sector-specific requirements, particularly for financial services, insurance, media, education, and other regulated sectors.

These reforms may enhance the utility of JAFZA offshore entities for purposes such as:

  • Holding company structures to manage shares in UAE and international subsidiaries,
  • Investment vehicles participating in UAE-based or cross-border projects,
  • Lightweight representation for foreign businesses seeking a presence in the UAE without full operational infrastructure,
  • Asset holding and property ownership in designated freehold areas.

Importantly, it remains a requirement that JAFZA offshore companies can only be registered and managed through JAFZA-approved registered agents. All formation, corporate maintenance, and official interactions with JAFZA must be carried out via such agents.

Conclusion

The 2023 revisions to JAFZA’s Offshore Company Regulations—particularly the restructured Article 14—represent a measured shift in the regulatory landscape. By permitting certain business activities within the UAE, subject to licensing and Registrar approval, these changes broaden the potential use cases for JAFZA offshore companies.

While the reforms offer greater flexibility, they also reinforce the importance of regulatory compliance. For companies exploring JAFZA offshore structures, legal due diligence remains a necessary step in determining the feasibility and scope of their intended operations.

Yamalova & Plewka FZCO is a JAFZA-registered agent and is fully authorized to assist with the establishment, licensing, and ongoing management of JAFZA offshore companies. For tailored legal advice or support, please contact us at www.lylawyers.com.

Starting on the Right Foundation: Business Setups in the UAE

The business-friendly environment of the UAE attracts entrepreneurs and companies from every part of the world, with enormous opportunities in almost all sectors. At the same time, setting up a business in the UAE requires careful planning and well-informed decision-making since its regulatory environment is unique. Getting off on the wrong foundation can lead to serious operational and legal issues. Following are some of the most critical factors to consider when setting up a business in the UAE.

Choosing the Right Economic Zone

The selection of the right economic zone is among the first key decisions for any company aiming to set up in the UAE. There are two main options to choose from: the Mainland and Free Zones. Each has different legislation, mechanisms of operation, and benefits. Significantly, there is no “UAE-wide” business license, with companies needing to register in at least one emirate and then expand to other zones by opening branches or forming subsidiaries. Established free zones like the DMCC, JAFZA, and DIFC have modern infrastructure, consolidated online portals, and business-friendly processes that help foreign companies manage their operations remotely. Their mainland counterparts are more accessible for wider market access; however, they come with more regulatory restrictions, including an employee quota and less cohesive management systems.

Understanding the Complexities of Free Zones

Whereas some free zones have reputations for ease of procedure, others are cumbersome because they necessarily rely on third-party agents. These agents are middlemen that may also exercise control over critical aspects of business operations, such as the licensing and communication processes with the free zone authority. In such cases, a lack of direct access to the license may create inefficiency and conflicts of interest. For instance, there are instances where businesses have to suffer delays in trying to move to another free zone because the existing zones try to withhold NOCs in order to keep them behind. Such tactics reduce operational flexibility and create unexpected obstacles.

The Risks of Over-Reliance on Consultants

In most cases, consultants guide foreign businesses through the setup process. However, not conducting thorough due diligence while relying on consultants leads to suboptimal decisions. This includes consultants who have vested interests in certain zones they push businesses toward and those using some general templates, even for documents so significant, such as Memorandums and Articles of Association and employment contracts. Such pre-patterned solutions hardly aim at the singular needs of their business and place a business at significant risk from an operational efficiency viewpoint or legal fallout.

Negligence of Specific Legal Requirements of the UAE

The other frequent mistake is a failure to adapt business practices and agreements to the legal and regulatory environment in the UAE. Many businesses try to use documents drafted in their home countries, thinking that they should be adequate. However, such agreements are mostly unenforceable in the UAE and also fail to meet the local compliance requirements.

For instance, the UAE has employment laws that require contracts to meet their unique legal requirements, whatever the country of origin of the parent company is. Non-compliance with required contract structures can lead to legal and business disputes that can significantly damage a company’s operations.

Setting Up the Right Foundation

Businesses can avoid many of these common problems through the following ways:

  • Research: Understand the variation in economic zones to choose one that is suitable for the growth of your business model.
  • Direct Interface: Wherever possible, interface directly with free zone authorities and not necessarily only through third-party agents.
  • Specialized Documentation: All contracts and agreements should be prepared or vetted by UAE law-savvy lawyers.
  • Professional Expertise: Engage reputable advisors for legal, financial, and operational matters to achieve a compliant and efficient setup.

Conclusion

The structure in which the business has been set up will ensure that the business is stable and profitable in the long run. This involves the selection of the right economic zone, doing due diligence on working with consultants, and careful alignment with local regulations in the UAE. Any shortcuts to hasten the setup process will actually save some time initially but create considerable challenges later on. With a focus on informed decision-making and tailored solutions, businesses can position themselves for sustainable growth and success within the UAE’s competitive landscape.

Common Business Pitfalls and Lessons for Success in the UAE

The UAE is indeed the hotbed of innovation—a land of opportunity that invites business houses from across the world with open arms. While the soil is fertile for the business to thrive in this part, the environment does present some very exclusive challenges. Not very often will a startup or new venture collapse in a catastrophic fallout for potential fault lines, but some disastrous missteps within the initiation cycle. Being able to identify those pitfalls and learning from them is key to creating a sustainable and successful business.

Importance of Strong Financial Foundations

Scaling a business with external funding for which financial planning has not been rightly done is one of the major reasons for business failure. Businesses that grow too fast without having a strong financial backbone mostly face problems in sustaining the business in the long run. It is interesting to note herein that the key to sustainable growth is building within one’s means and avoiding undue financial dependencies. Success is not about immediate expansion; it is more about building a strong foundation that sustains gradual, progressive development.

Lack of Due Diligence

Common mistakes entrepreneurs make include complete failure or lack of due diligence. The excitement and drive that define entrepreneurship can lead to the commitment to decisions without sufficient investigation and deeper analysis behind promising surface-level information. It invites unforeseen difficulties since many challenges are unveiled afterward. Detailed investigation and claims verification beforehand is critical to not suffering from excessive error margins, which involve substantial costs through agreement or partnership engagements.

Unrealistic Planning—Lack of Business Acumen

A second, more general problem of unrealistic planning is that, disproportionately, entrepreneurs focus on marketing, branding, and creating fake appearances of success, while little or no attention is paid to actual development related to the core business operations. Over-optimistic budgeting and forecasting lead to a financial shortage and operational inefficiency. Business success requires both some kind of visionary idea and pragmatic strategies down the line, such as detailed financial planning combined with an operational excellence approach.

Warning Signs of Instability

Some practices raise an alarm with respect to instability in the business. Secrecy, inability to answer direct questions, and an over-smooth storyline are warning signals. Similarly, very complicated explanations for simple operations, such as delays in banking or compliance, should raise further inquiry. Transparency and frankness go a long way in building trust, both internally and externally, for stability.

The Role of Professional Guidance

Most businesses don’t get professional support, believing it to be an unnecessary expense. This, together with a string of other causes, results in unenforceable contracts, poor financial management, and even legal risks. At each step in law, finance, and operations, professional involvement provides the business with a good backbone on which risks are minimized and success well pronounced in terms of better longevity. While technology and tools will help bring better decisions, they cannot replace the depth that experienced professionals will bring to an organization.

Characteristics of Successful Ventures

Successful businesses do have some things in common. They care about due diligence, realistic financial planning, and substance over form. The businesses focus on operational fundamentals, the deployment of proper talent to deliver on the vision. The use of professional advisors and openness in business also characterizes businesses that achieve long-term success.

Key Lessons for Budding Entrepreneurs

An entrepreneur in the UAE will have to be duly built with a strategy if he or she is to thrive in this competitive business milieu. Knowing one’s limitations and seeking professional advice are key beginnings toward a resilient enterprise. Emphasizing due diligence, growth sustainability, and transparency in all aspects of operations can help a business navigate challenges into position and prosperity.

Success in the UAE is not all about innovation or rapid expansion. It is essentially about creating an organized and flexible business that can withstand challenges, capitalize on emerging opportunities, adopt these, and help the entrepreneurs realize their dream into a permanent reality.

Understanding the New Age Requirements for Business Ownership in the UAE

In one of the widest decisions to empower young entrepreneurs, the UAE has just promulgated reducing the age limit required to engage in trading or owning a business. In particular, the minimum age limit was reduced from 21 to 18 years. To that effect, persons aged 18 years and above may establish, own, operate, and manage businesses within the UAE.

Key Changes and Their Implications
While the reduction of the minimum age requirement provides new opportunities to younger people, there are some significant nuances associated with this change.

Legal Capabilities at Age 18
Even with the new age of majority, there are still several legal disabilities for an 18-year-old in the UAE. For instance, they are not considered to have full legal capacity to sign a Power of Attorney or certain types of documents on their own. In this regard, a minor’s guardian may be required to execute contracts or POAs on their behalf. However, there are still several business activities that 18-year-olds can conduct independently without requiring their guardian’s approval.

Independence for Minors Aged 18 to 21
Minors who are at least 18 years old but below the UAE’s official age of majority, which is 21, have more autonomy in certain areas.

  • Opening Bank Accounts: 18-year-olds can open their own bank accounts without needing approval from their guardians.
  • Incorporation of Companies: They may incorporate a company in their name without the approval of the guardian.

Business Activities for Minors Aged 15 to 18
For minors below 18 years but above 15 years, trade can be conducted though subject to certain approvals. The type of these approvals is determined by the nature of the transaction. For instance:

  • Bank Accounts: They have to obtain the consent and signature of the guardian to operate a bank account.
  • Employment: If the child is to be employed, then again, that is only permitted with the consent of the guardian.
  • Disposing Real Property: Where real property is held in the name of a minor, then its disposition would again typically need to be sanctioned by the court as well.
  • Legal Framework: Article 18 of the Commercial Transactions Law states that a minor can practice trade upon completion of 15 years of age but should be subject to controls and conditions issued by a Cabinet resolution at the proposal of the Minister of Economy.

Conclusion
The recent amendments in the UAE with regards to the age requirements to own a business have really paved new avenues for budding young entrepreneurs. While persons of 18 years and above can now legally own and manage businesses, there are certain legal constraints that the said age group needs to go through, especially when it comes to signing contracts or other legal documents. Understanding such nuances and the approvals required is key to young business owners conducting their operations successfully within the UAE’s legal framework.

Business Set Up In UAE | Minimum Age

minimum age to trade in uae

Minimum Age To Start Business In UAE

minimum age to trade in uae

Minimum age for starting a business in the UAE has been lowered to 18 years of age. This is as compared to the previous law, which had set the minimum age to 21. 

This means that, now, individuals who are 18 years old, and above can freely own, transact, manage and set up a business in the UAE. 

Furthermore, minors who are between the age of 15 and 18, can also trade in the UAE. Although they are subject to certain regulations, as per the UAE Cabinet. 

This became possible by virtue of the UAE new Commercial Transactions Law, which is the Federal Decree Law No. 50 of 2022 re: Commercial Transactions Law, and Articles 18.1 and 18.2, in particular. Which replaced the previous Commercial Transactions Law No. 18 of 1993.

@ludmilayamalova Minimum age to do business in UAE #ludmilayamalova #lylawdubai #learnontiktok #legaltiktok #business #startups #uaebusiness ♬ original sound - Unreal Keanu Reeves

Business Set Up In UAE | Minimum Age - FAQ

You need to be 18 years of age to set up a business in the UAE.

Yes. Individuals aged between 15 to 18 years can trade in UAE however, will be subject to certain regulations as per the UAE Cabinet.

Freelance license in UAE is now available for those who are 18 years of age and up. Read more.

Primarily you need to obtain a business license and it needs to be for a specific business activity that you wish to conduct. Learn more.

Facebook
Twitter
LinkedIn
WhatsApp
Drinking and Driving in the UAE
The Harsh Consequences of Drinking and Driving in the UAE
Read More
DIFC Probate Roadmap - LYLAW
DIFC Probate Roadmap: A New Era for Inheritance in the UAE
Read More
Crypto Scams in the UAE
Crypto Scams in the UAE: What You Need to Know and How to Protect Yourself
Read More
SICK LEAVE IN UAE - LABOUR LAW
Sick Leave in UAE: Guide for Employers and Employees
Read More
UAE Ministry of Education Attendance and Assessment Policy Explained
UAE Ministry of Education Attendance and Assessment Policy Explained
Read More

Business Setup in Dubai OR Other Emirates | Overview

how to setup business in Dubai & other emirates

Business Setup in Dubai OR Other Emirates | Overview

how to setup business in Dubai & other emirates

To start a business in Dubai or other Emirates, there are a few rules and guidelines.

  1. First and foremost, you need to have a business license.
    This license needs to be for a specific business activity, which you wish to conduct.
  2. Depending on the activity, you need to choose the relevant economic zone.
    It could be either on the mainland or in a free zone. In the Emirate of your choice.
  3. The exact location of your business would also depend on 1) whether and 2) what type of employees you wish to hire. 
  4. Once you choose the right business zone, you need to submit an application to that authority, with the relevant information about yourself and your business. And pay the licensing fee.
  5. You also need to choose an office and sign a lease agreement.
    It could be either for a physical office or a flexi-desk.
  6. You will also need to create your corporate logo and stamp. 

These are some of the required steps for the issuance of a basic business license.

Additionally, depending on your business, you may also be required to:

  • Open a corporate bank account.
  • Obtain various insurance policies.
  • Appoint an auditor.
  • And, register your business with the tax authority.

Importantly, your business license will need to be renewed every year, along with the submission of certain documents and payment.

Business Setup in Dubai OR Other Emirates - FAQ

First and foremost, you need to have a business license. This license needs to be for a specific business activity, which you wish to conduct.

Yes, you are a business license in order to home business in Dubai or the other Emirates.

Minimum age for trading or owning a business in the U.A.E. has been lowered to 18 years of age. This is as compared to the previous law, which had set the minimum age to 21. 

Yes. Minors who are between the age of 15 and 18, can also trade. Although they are subject to certain regulations, as per the U.A.E. Cabinet.

Yes, you require a business license even if you are a Golden Visa holder.

Age for Freelance License in UAE

Age for Freelance License in UAE

Age for Freelance License in UAE

Age for Freelance License in UAE

 

UAE Freelance licenses in Dubai or any other emirates are now available for those who are 18 years of age and up.   

 

Previously, to start a business in the U.A.E., including freelance businesses, could only be done by those who were at least 21 years old. Now, the free-zones, in particular, across most of the Emirates, have extended the option of setting up the UAE freelance licenses to anyone who reaches the age of 18.

 

For the time being, however, for those who wish to set up on the mainland, the minimum age remains 21. Although, it should just be a matter of time before the mainland also lowers its requirement to 18. 

 

To clarify, the mainland is an economic zone under the jurisdiction of DED, or the Department of Economic Development. The changes to the minimum age requirement stem from the recent legislative amendments.

 

In particular, the new U.A.E. Commercial Transactions Law, which is the Federal Decree Law No. 50 of 2022, and Articles 18.1 and 18.2, in particular. That law replaced the previous Commercial Transactions Law No. 18 of 1993.