Case Studies

Corporate & Holding Companies

Aligning Group Governance, ESR and Corporate Tax for a UAE Holding Structure

Overview

A privately owned UAE holding group (“the Group”) had accumulated a mix of free-zone and offshore entities over a decade of opportunistic growth. With UAE corporate tax and ESR requirements now in force, the owners wanted to rationalise governance and demonstrate real substance where it mattered.

Marensa Advisory was engaged to design a group-wide governance framework, align Economic Substance Regulations (ESR) and corporate tax positioning with reality, and give lenders and counterparties more confidence in the Group’s structure.

Client profile

UAE-based holding group with subsidiaries in the UAE, Mauritius and a GCC neighbour
Activities included distribution, logistics, consulting and IP licensing
Mix of mainland and free-zone companies plus older offshore SPVs
No centralised governance documents; decisions largely driven by the founder

Key challenges

Opaque decision-making
Operational decisions and strategic calls were taken by a small inner circle, often informally. There was limited evidence of where decisions were actually made relative to legal entities and tax residence.
Fragmented documentation
Memoranda and articles were standard templates; there were no group-level policies, board charters or delegations. Local directors in some jurisdictions lacked clear guidance.
ESR and corporate tax uncertainty
The Group had basic ESR filings but little documentation linking them to actual activities, employees and premises. Corporate tax impact had been assessed in isolation by different advisors.
Bank and counterparty questions
Banks and key counterparties were increasingly asking for organograms, governance descriptions and clarity on “who does what” in the group.

Marensa’s approach

1. Governance and structure mapping

We started by building a group-wide map:

Legal entity register with ownership, activities and jurisdictions
Management structure: who manages what, where they are based, and how they are paid
Key decision flows: contracting, pricing, financing, IP, and risk decisions

This made visible what everyone “knew” informally but could not show to banks or regulators.

2. ESR and tax reality check

Working alongside the client’s tax advisors, we:

Mapped core income-generating activities (CIGAs) to specific entities
Identified where employees, premises and decision-makers actually sat
Highlighted entities at risk of weak ESR substance or unclear tax positioning

Instead of chasing artificial “substance”, we looked for ways to align reporting with real activity, or consolidate entities where they no longer served a purpose.

3. Group governance framework

We then designed and documented a simple but robust governance framework:

Group governance charter setting out the role of the holding company and subsidiary boards
Board and committee charters where needed (e.g. Investment/Projects Committee)
Clear delegations of authority (DoA) for capex, contracts, guarantees, hiring and litigation
Decision matrices linking types of decisions to the right board/committee

We kept documentation lightweight but precise, using tables and RACI charts that directors could actually use.

4. Strengthening local boards and records

For key entities, we helped formalise board agendas, meeting packs and minute templates.
We trained local directors (including non-family directors) on their duties and the new DoA.
We set up simple action-tracking and resolution logs to show follow-through.

5. Banking and counterparty pack

Finally, we compiled a governance and structure pack that could be reused across banks and counterparties:

Updated organogram
Short narrative on group structure and governance
Summary of ESR and tax approach, based on advice
Example board/committee minutes (with sensitive details removed)

Outcomes

Within six months:

The Group had a clear, documented governance model understood by family and non-family directors.
ESR and tax narratives aligned with how the business actually operated, reducing the risk of scrutiny based on perceived mismatches.
Banks received a consistent, professional pack when reviewing facilities, improving relationship quality and shortening queries.
The founder gained comfort that decision-making and accountability were no longer dependent on a few individuals operating informally.

Why it matters

In an era of ESR, corporate tax and increased bank scrutiny, “old school” holding structures built on trust and personal relationships can become a liability. Our involvement in this case shows how a pragmatic governance framework, not an overly legalistic one and how we can create clarity, support compliance and preserve the agility that owners value.