A UAE free-zone company as a regional hub
A company in a UAE free zone trades or provides services across the region for a group whose Cyprus holding company owns it, with its own licence, premises, corporate tax registration and beneficial-ownership filings.
Ownership chart
- Owner A owns 60% — Holding company
- Owner B owns 40% — Holding company
- Holding company owns 90% — Free-zone company
- Regional manager owns 10% — Free-zone company
A company in a UAE free zone is a common base for a group’s regional trading, distribution or services. It is a UAE legal person with limited liability, can be wholly foreign-owned, and is licensed by its free-zone authority — DMCC for commodities or JAFZA for logistics, for example — which also receives its beneficial-ownership filings. The UAE left the FATF list of jurisdictions under increased monitoring in February 2024 and the EU list of high-risk third countries in August 2025.
The company is within UAE corporate tax. A qualifying free zone person pays 0% on qualifying income and 9% on the rest; any other company pays 0% on taxable income up to AED 375,000 and 9% above it. The UAE withholds no tax on dividends paid abroad, and dividends received by the Cyprus holding company are generally exempt there.
The UAE has its own beneficial-ownership test — at least 25% of the capital or of the votes, or control by other means, with the senior manager recorded as a last resort. The free-zone company keeps registers of its beneficial owners, its shareholders and any nominee directors, and the Cyprus holding company files under the Cyprus test; worked through the chain, the two name the same people.
Who is the beneficial owner
Owner A holds 60% of the holding company and controls it; through the holding company's 90%, A has 54% of the free-zone company. Owner B's 40% of the holding company gives 36%. Both are above the 25% line used in the UAE and in Cyprus, so both are beneficial owners of the free-zone company as well as of the holding company. The regional manager's 10% is below the line, so the manager is a beneficial owner only through control by other means, such as a right to appoint the board, but is named in the company's register of shareholders all the same.
| Person | Through shares | Through a role |
|---|---|---|
| Owner A | 54% | — |
| Owner B | 36% | — |
| Regional manager | 10% | — |
What each layer files and keeps
- 01
The owners
Identity and address, tax residence and source of wealth for each owner and for the regional manager, and the shareholders' agreement that sets the manager's rights.
- 02
The Cyprus holding company
Registers of members and directors, the beneficial-ownership filing and its annual confirmation, audited IFRS accounts, the HE32 annual return and the tax return, and board minutes approving the investment in the UAE and the dividends received from it.
- 03
The free-zone company
The licence and its annual renewal, the lease of premises in the zone, the registers of beneficial owners, shareholders and nominee directors filed with the free-zone authority, audited accounts, the corporate tax registration, and the yearly file showing that it meets the qualifying free zone person conditions.
What to watch
- The 0% rate covers only the qualifying income of a qualifying free zone person — one with adequate assets, staff and spending in the zone, non-qualifying revenue within the lower of 5% of total revenue or AED 5 million, compliance with transfer-pricing rules and audited accounts; other taxable income is taxed at 9%
- Failing a condition in one year removes the status for that year and the four years after it
- Beneficial owners are filed with the free-zone authority within 60 days of licensing, and shares held by nominees are disclosed within 15 days; the registers are not public, and in DMCC an out-of-date register blocks the licence renewal
- The economic substance regulations no longer apply to years after 2022; substance is now tested through corporate tax — residence, place of effective management, transfer pricing and the qualifying conditions
- The UAE is on neither the EU list of non-cooperative jurisdictions nor Cyprus's 2026 list of low-tax jurisdictions, the two lists that bring Cyprus's defensive rules on payments to associated companies into play
What the dossier keeps
- The group chart, with the Cyprus and UAE registers reconciled to it
- The licence, lease and staff records that show the company's presence in the zone
- The yearly qualifying-income file — the split of revenue, transfer-pricing support and audited accounts
- The calendar of licence renewals, beneficial-ownership updates, UAE corporate tax and Cyprus filings
Jurisdictions in this structure
United Arab Emirates
A federation with mainland, free-zone and financial-free-zone companies and foundations; federal corporate tax at 9% since June 2023, 0% on qualifying free-zone income, and beneficial-ownership registers kept by each registrar and closed to the public.
Cyprus
An EU member state with English-based company law, used for holding, financing, IP, shipping and fund vehicles; a 15% corporate tax rate since 2026 and a non-public beneficial-ownership register.
General information, not advice. Facts are stated as of the date on each page. Law, lists and rates change; the professional who acts for the entity confirms what applies to it. Chrysos performs no regulated act and gives no legal or tax advice.
- KPMG — Updated rules for Qualifying Free Zone Persons
- Shams — Beneficial owner guidance under Cabinet Decision No. 109 of 2023
- JAFZA — Guide to ultimate and intermediate beneficial owners
- DMCC — Guidance note for member companies on KYC and beneficial owners
- PwC — UAE Cabinet Decision No. 98 of 2024 on economic substance
- Andersen — Cyprus low-tax jurisdictions list for 2026