The Ultimate Guide for Setting Up a Holding Company in ADGM (2025)

If you are looking to protect assets, expand businesses, and work in a top-level financial center, then Abu Dhabi Global Market (ADGM) is the ideal choice. Located on Al Maryh Island, ADGM offers a secure, internationally accredited legal system on the basis of english common law. With 100% foreign ownership and a business-friendly environment, ADGM is the main place for the establishment of a holding company in 2025. This guide will help you explore the process.

 

What is a Holding Company? 

A holding company is a business entity that is mainly established for shares of other companies, manages the assets, and oversees business operations without engaging in daily activities of those businesses. By forming a holding company in ADGM, you can benefit from 100% foreign ownership, there is no restriction on the money going out in the United Arab Emirates, and a favorable tax regime that makes it an excellent option for investors looking to manage its wealth efficiently.

Benefits of Setting Up a Holding Company in ADGM 

• 100% Foreign Ownership

ADGM allows complete foreign ownership without a local partner, providing complete control to investors. 

• Tax Efficiency

Enjoy zero corporate tax on qualification and there is no restriction on dividends, interest or royalty. 

• Legal Protection

ADGM is operated under English common Law, ensures strong property protection, governance and reliable dispute resolution. 

•  Strategic Location: 

ADGM, located in Abu Dhabi, provides access to rapidly growing Middle Eastern, Asian and global markets. 

•  Business Structure Flexibility

Choose from various legal structures such as PCL or SPV, sewn to both active and passive businesses.

Latest Regulatory Changes in 2025

As with any jurisdiction, ADGM has introduced new regulations and reforms to keep up with global standards. In 2025, several key changes are expected to affect businesses:

• Mandatory Whistleblower Protection

Starting May 31, 2025, ADGM requires all companies, including holding companies, to implement a whistleblower protection policy. This means businesses must establish clear reporting mechanisms to protect individuals who report unethical practices, financial misconduct, or regulatory violations.

• Corporate Tax and Free Zone Exemption

The UAE has introduced new corporate tax regulations. However, ADGM holding companies that qualify as Free Zone Persons (QFZP) can still benefit from a 0% corporate tax rate on certain types of income. It’s essential to ensure that your business meets the required criteria to maintain this tax advantage.

• Beneficial Ownership & Transparency

New beneficial ownership rules have been implemented in 2025 to enhance transparency in ADGM. Holding companies must disclose their ultimate beneficial owners (UBOs) and ensure full compliance with reporting requirements. Failure to do so may result in penalties or the loss of tax exemptions.

• Anti-Money Laundering (AML) Compliance

ADGM has reinforced its anti-money laundering (AML) regulations, requiring companies to conduct more rigorous background checks and due diligence. Holding companies must ensure compliance with these laws to prevent illegal transactions and protect the integrity of the financial system.

Guide to Setting Up a Holding Company in ADGM

1. Choosing the Right Structure

Before forming your holding company, it’s important to choose the right business structure. In ADGM, you can select from various legal entities, such as a Private Company Limited by Shares (PCLS) or a Special Purpose Vehicle (SPV). Determine whether you want to operate as an active holding company or a passive one. Active holding companies manage operations, while passive holding companies are primarily used for asset ownership.

2. Document Preparation and Submission

To register your holding company in ADGM, you will need the following documents:

• Passport copies of directors and shareholders
• A business plan (if required)
• Memorandum & Articles of Association (M&A)
• Proof of address for shareholders and directors

Once your documents are prepared and verified, submit them through the ADGM online portal for approval. This process usually takes a few days to a couple of weeks.

3. Post-Incorporation Procedures

Once your company is incorporated, you will need to complete the following steps:

• Apply for an establishment card and visas for your employees or directors.
• Choose between a flexi-desk or physical office depending on your business needs.
• Open a corporate bank account with a local UAE bank.

4. Tax Registration

While ADGM offers a 0% corporate tax rate for qualifying businesses, you will still need to register for tax and file periodic reports to ensure compliance with UAE tax laws.

5. Annual Compliance

To remain compliant, your holding company must submit annual filings, including audited financial statements (if required), Beneficial Ownership filings, and renew any necessary licenses or visas.

Tax Benefits for ADGM Holding Companies

1. No Corporate Tax for Free Zone Persons (QFZP)

As mentioned, businesses that meet the criteria for a Qualifying Free Zone Person (QFZP) are eligible for a 0% corporate tax rate on eligible income streams, making it one of the most attractive tax regimes globally.

2. No Withholding Tax

ADGM holding companies enjoy the benefit of no withholding tax on outbound payments such as dividends, interest, and royalties, which significantly reduces the tax burden when moving funds internationally.

3. No Capital Gains Tax

Another significant benefit is the absence of capital gains tax on the sale of shares, making it an ideal location for investment holdings.

4. Double Taxation Agreements

The UAE has signed numerous Double Taxation Agreements (DTAs) with over 100 countries, ensuring that businesses can avoid double taxation and benefit from reduced tax rates on cross-border transactions.

Key Considerations for 2025

1. Financial Substance Requirements

To maintain your tax benefits, ensure your holding company meets the financial substance requirements. This means having a physical presence in ADGM, conducting real business activities, and employing key decision-makers within the jurisdiction.

2. Bank Account Challenges

Opening a corporate bank account in the UAE can be challenging, as banks require thorough documentation and approvals. This can take time, so it’s important to plan accordingly.

3. Regulatory Compliance

Staying compliant with ADGM’s regulations is crucial. This includes filing annual reports, meeting beneficial ownership requirements, and following whistleblower protection policies.

Comparing ADGM with Other Jurisdictions

While ADGM offers many advantages, it’s essential to compare it with other global jurisdictions for holding companies. Here’s a quick overview:

Conclusion

Setting up a holding company in ADGM in 2025 offers unparalleled benefits, including tax advantages, 100% foreign ownership, and access to a global financial hub. The UAE’s stable legal system, business-friendly environment, and strategic location make ADGM an ideal jurisdiction for businesses looking to protect their assets and expand internationally.

However, businesses must stay informed about regulatory changes and ensure compliance with local laws to fully benefit from ADGM’s services . By partnering with legal and financial experts like ebs chartered accountants, businesses can navigate the complexities of ADGM regulations and ensure long-term success in this thriving financial hub.

Need Help?

ebs chartered accountants provides expert guidance and end-to-end support in setting up and managing holding companies in ADGM, ensuring full compliance with local regulations. Their experienced team simplifies the process, helping businesses maximize tax advantages and operational efficiency.

FAQs

What is the minimum capital required to start a holding company in ADGM?

There is no minimum capital requirement for setting up a holding company in ADGM.

Can an ADGM holding company own subsidiaries outside the UAE?

Yes, ADGM holding companies can own and manage subsidiaries globally without restrictions.

Is a physical office required for an ADGM holding company?

No, a flexi-desk option is available, which meets the office space requirement cost-effectively.

Do ADGM holding companies need to register for UAE Corporate Tax?

Yes, registration is required, but qualifying entities may still benefit from a 0% tax rate.