Wealth Succession Planning in the UAE: Holding Companies, Offshore Structures and Wills

 Why Wealth Succession Planning Matters for UAE Business Owners and Families

For business owners, investors, entrepreneurs, and families living in the United Arab Emirates, wealth creation is only one part of financial security. Equally important is ensuring that accumulated assets, business interests, and family wealth remain protected and can be transferred efficiently to the next generation.

Many individuals own UAE real estate, operate mainland or free zone companies, maintain international investments, or hold assets across multiple jurisdictions. However, these assets are frequently registered in individual names without a comprehensive succession plan. In the event of death, incapacity, business disputes, or unforeseen financial liabilities, the absence of appropriate legal arrangements may result in delays, disputes, operational disruption, and unintended financial consequences for family members.

Wealth succession planning is not merely about deciding who inherits your wealth. It is about establishing a legally sound structure for ownership, management, protection, and transfer of assets.

In the UAE, an effective wealth succession strategy may combine three important legal tools:

1. Holding company structures to consolidate ownership and facilitate business continuity.
2. Offshore holding companies and other appropriate asset-holding structures to separate ownership from commercial operating risks, subject to applicable law.
3. Properly drafted and registered wills to document succession intentions within the applicable legal framework.

These arrangements can be relevant to both Muslim and non-Muslim individuals, although the applicable inheritance rules and the degree of testamentary freedom differ significantly.

1. What Is a Holding Company? Holding Company Structures in the UAE and Succession Planning

A holding company is an entity established primarily to own shares in other companies, investments, or eligible assets rather than conduct day-to-day commercial operations. Depending on the jurisdiction and its permitted activities, it may hold subsidiary companies, investment interests, and intellectual property.

In the UAE, an appropriate holding structure can help entrepreneurs and families consolidate ownership, separate operating activities from investment assets, and simplify the administration of business interests during succession.

How does a holding company in Dubai work?

Consider an entrepreneur who personally owns two UAE businesses, a property investment and a portfolio of other eligible assets. If each asset is held separately in the individual’s name, transferring ownership after death may involve multiple procedures, authorities, and legal requirements.

Our corporate lawyers in Dubai can advise on setting up a holding company or bringing existing shareholdings under one.

Where Dubai property sits within the structure, our property lawyers in Dubai can review how it is held and how it would pass on.

A properly designed structure could instead place the shares of eligible businesses beneath a holding company, with the individual owning the holding company’s shares.

A simple holding company structure may look like this:

Individual or family ownership
↓
Holding company
↓
Operating Company A | Operating Company B | Eligible investments

The operating companies continue conducting their respective businesses, entering into contracts and managing their liabilities. The holding company consolidates ownership at the upper level.

Subject to the applicable inheritance rules, company constitutional documents and any restrictions on transfers, succession planning can then focus on the ownership and governance of the holding entity rather than requiring the family to reorganise every underlying business separately.

Key Holding Company Benefits for Succession Planning

• Simpler succession of business interests

Where a holding company owns several operating businesses, succession arrangements can be developed around its shares, governance and management. This may reduce administrative complexity and help the family maintain continuity in the wider business group.

However, transferring shares is not always automatic. The company’s constitutional documents, licensing conditions, shareholder agreements, regulatory approvals and applicable inheritance procedures must all be considered.

• Separation of commercial risks

Separating business activities into distinct legal entities can help contain liabilities within the relevant company. For example, a dispute involving one operating subsidiary would not ordinarily make the assets of a separate subsidiary automatically available to satisfy that company’s debts.

This separation depends on genuine legal and financial independence, proper corporate governance and compliance with applicable law. It does not eliminate liability arising from personal guarantees, unlawful conduct or other independent legal obligations.

• Improved family governance

A holding structure can support family governance arrangements by establishing clear ownership rights, management responsibilities and decision-making procedures. Shareholder agreements, succession provisions and appropriate constitutional documents may help reduce uncertainty and disputes between family members. For family companies, these arrangements work best as part of wider business succession planning for family businesses.

• Centralised ownership and administration

For individuals with multiple businesses or investments, consolidating eligible interests under a holding entity may improve reporting, administration and long-term planning. It can also make it easier to review the family’s overall ownership position when circumstances change.

Does a holding company replace a will?

No. A holding company and a will perform different legal functions.

A holding company establishes the ownership and governance structure during the owner’s lifetime. A will sets out testamentary intentions concerning assets covered by it, subject to the applicable law.

Where an individual owns shares in a holding company, those shares may form part of the individual’s estate upon death. The succession of those shares must therefore be addressed under the relevant inheritance framework.

A comprehensive plan should coordinate the holding structure with the owner’s will, shareholder agreements, company documents and any other relevant succession arrangements.

2. Offshore Holding Companies: Lawful Asset Protection and International Assets

For individuals with international business interests, offshore holding companies may offer an additional option for organising ownership and separating investment assets from operating activities.

Within the UAE, an offshore company, or a vehicle in one of the international financial centres, may provide different legal options for holding eligible assets and shares. The appropriate structure depends on the individual’s objectives, asset location, business model, tax position, and applicable regulatory requirements.

How can an offshore holding company help protect assets lawfully?

Imagine a business owner who operates a UAE trading company while also holding investments and other assets accumulated over several years.

If all eligible assets and business interests are held directly in one operating entity, a commercial dispute could expose the assets belonging to that entity to its creditors.

An appropriately structured arrangement may instead place the shares of the operating company under a separate holding entity, while other eligible investments are held separately where legally and commercially appropriate.

This can create a distinction between:

• The operating company’s commercial activities and liabilities.
• The holding company’s ownership interests.
• The individual’s personal assets and obligations.

A claim against an operating company does not ordinarily make assets owned by a separate holding company automatically liable for the operating company’s debts. Nevertheless, the outcome depends on the legal relationships involved, applicable law, guarantees, security interests and the circumstances of the claim.

Protection against third-party claims and its limits

Businesses face a variety of risks, including contractual disputes, supplier claims, unpaid commercial obligations, litigation and insolvency.

A holding structure established in advance and maintained correctly may help reduce the extent to which a problem in one business affects other independently owned entities.

However, an offshore company is not an absolute shield against third-party claims or personal liabilities.

For example, if an individual personally guarantees a business loan, the creditor may pursue the individual in accordance with the guarantee even where a holding company exists. Similarly, fraud, sham arrangements, unlawful transactions and transfers designed to defeat creditors may attract legal challenges.

Under the UAE’s updated civil transactions framework, including Federal Decree-Law No. 25 of 2025, which came into force on 1 June 2026, creditors’ rights and the debtor’s assets remain important legal considerations. The applicable provisions and any relevant transitional rules should be reviewed before implementing an asset-protection arrangement.

Consequently, offshore structuring should be approached as a legitimate ownership and risk-management strategy, not as a mechanism to conceal assets or avoid existing obligations.

Choosing a jurisdiction for an offshore holding company

Seeking the best jurisdiction for a holding company requires careful assessment. Depending on the circumstances, options may include eligible UAE offshore company regimes, such as those administered by Jebel Ali Free Zone (JAFZA Offshore) or Ras Al Khaimah International Corporate Centre (RAK ICC).

Before establishing a structure, professional advice should address:

• Whether the proposed entity can legally hold the intended shares or assets.
• Whether the relevant land registry, free zone or regulator recognises the proposed ownership arrangement.
• Banking, beneficial ownership and disclosure requirements, where applicable. (UAE Economic Substance Regulations were discontinued for financial years after 2022. Clyde & Co, BDO).
• Corporate tax, international tax residence, reporting and substance considerations.
• The treatment of the holding company’s shares under the owner’s succession arrangements.
• The implications of foreign laws where assets or family members are located outside the UAE.

An offshore company may be unsuitable for conducting ordinary commercial activities in the UAE without the necessary permissions. Its legal capacity, permitted activities, and ownership restrictions must be verified for the chosen jurisdiction.

How offshore company shares pass on death

An offshore holding company may be useful where the family owns assets across multiple countries or wishes to consolidate eligible investments under a single ownership vehicle.

However, the incorporation of an offshore company does not automatically determine how its shares will pass upon death. The succession of those shares may raise questions concerning the law applicable to the deceased, the company’s jurisdiction, the location of the assets and the relevant probate or inheritance procedures.

A will, company constitutional documents and any additional succession arrangements should therefore be reviewed together.

3. How Wills Work With Ownership Structures for Muslims and Non-Muslims

The UAE has developed distinct legal frameworks governing personal status, inheritance and wills. Understanding the applicable framework is essential before deciding how to distribute assets.

The relevant legal position may depend on the individual’s religion, nationality, domicile or habitual residence where relevant; the location and nature of the assets; and the applicable jurisdiction.

• Muslim business owners: Sharia Law inheritance and company shares

For Muslim individuals, inheritance generally operates within the applicable Sharia-based succession framework. Prescribed inheritance entitlements may apply to qualifying heirs, and testamentary freedom is subject to legal restrictions.

A will remains an important planning instrument, but it should not be assumed that a Muslim testator can freely distribute the entire estate contrary to applicable inheritance rules.

Depending on the circumstances and the applicable law, a will may address matters such as eligible bequests, the appointment of an executor where permitted, and the administration of the estate. The validity and effect of particular provisions must be assessed against the relevant inheritance rules and any applicable requirements for consent by heirs.

For Muslim business owners, succession planning should also consider the shares held in operating companies and holding entities, outstanding debts, jointly owned assets, contractual obligations and the continuity of management. Our inheritance lawyers in Dubai can explain how these rules apply to your family and your business.

A coordinated structure can help identify what forms part of the estate and establish a practical plan for the administration and transfer of eligible interests without assuming that corporate ownership overrides mandatory inheritance rights.

• Non-Muslims: civil personal status law and registered wills

Non-Muslim individuals may have different succession options under the UAE’s civil personal status and wills frameworks.

Federal Decree-Law No. 41 of 2022 on Civil Personal Status established a civil framework for personal status matters, involving non-Muslims, subject to its scope and applicable amendments. 

Dubai also has a specific framework under Law No. 15 of 2017 concerning the administration of estates and implementation of wills of non-Muslims.

Depending on eligibility and the relevant jurisdiction, non-Muslims may be able to register wills providing for the distribution of their assets according to their documented intentions.

Available options may include the relevant Dubai Courts procedures, the DIFC Wills Service Centre or the Abu Dhabi Global Market’s applicable wills framework. These routes are not interchangeable in every case, and eligibility, asset coverage, registration formalities and enforcement considerations must be checked before selecting one.

A properly prepared and registered will may help a non-Muslim testator specify intended beneficiaries and address the distribution of assets covered by the instrument.

Nevertheless, the scope of testamentary freedom and the treatment of particular assets must be verified under the applicable framework. A will should not be assumed to govern every asset worldwide or automatically override the requirements of a foreign jurisdiction.

• Recent legal developments and why they matter

The UAE’s personal status and civil laws have undergone significant developments. 

The UAE introduced a revised legal framework under Federal Decree-Law No. 41 of 2024 on Personal Status, which came into effect on 15 April 2025. In November 2025, the Federal Judicial Council completed the statutory transition by issuing uniform implementing regulations (Resolutions Nos. 66 to 70 of 2025) to govern court operations. 

Separately, the UAE issued Federal Decree-Law No. 25 of 2025, promulgating a new Civil Transactions Law, which came into force on 1 June 2026. The new framework forms part of the country’s broader modernisation of civil law.

These developments reinforce the importance of reviewing succession documents and ownership structures against the legislation currently applicable to the individual and their assets.

Importantly, a change in legislation does not mean that every existing will, company structure or inheritance arrangement automatically becomes invalid. Existing documents should be reviewed to determine whether amendments, additional registrations or other steps are necessary.

• Why a will remains important even when a holding company exists

A holding company may consolidate ownership, but it does not remove the need to plan for the succession of the holding company’s shares.

For example, if a parent owns a holding company that controls several operating businesses, the parent’s death may raise questions about who inherits the shares, who exercises voting rights, who manages the businesses, and how disagreements among beneficiaries will be addressed.

A coordinated succession plan can address these questions by aligning the will, company documents, governance arrangements and applicable inheritance law.

It is also important to distinguish between a will and a power of attorney. A power of attorney generally concerns authority exercised during the principal’s lifetime, subject to its terms and the applicable law; it should not be treated as a substitute for a valid succession arrangement after death.

• Building a Wealth Succession Plan: Six Steps

Effective wealth succession planning requires more than incorporating a company or signing a will. It involves assessing the owner’s assets, family circumstances, commercial obligations, and long-term objectives.

A practical approach may include the following steps:

Step 1: Conduct an asset review. Identify UAE and overseas property, company shares, investments, intellectual property, bank accounts, and other significant assets.

Step 2: Map ownership and liabilities. Establish which assets are owned personally, jointly, or through companies, and identify guarantees, security interests, contractual commitments, and potential exposures.

Step 3: Assess the appropriate holding structure. Determine whether a mainland, free zone, or offshore holding company is suitable, considering the intended activities, applicable regulations, and tax consequences.

Step 4: Review the applicable inheritance framework. Confirm the legal rules governing the individual and each relevant asset, including the implications of religion, nationality, and asset location.

Step 5: Prepare and register appropriate succession documents. Depending on the circumstances, this may include a will, shareholder agreement, company resolutions or other legally appropriate arrangements. This includes reviewing or drafting shareholder agreements so that they match your succession plan.

Step 6: Review the plan periodically. Marriage, divorce, the birth of children, the acquisition of new assets, changes in residence and legislative developments may all justify a review.

The objective is to ensure that ownership, management and succession arrangements remain consistent with the family’s intentions and applicable legal requirements.