The Ultimate Guide to Forming a Holding Company in ADGM (2025)

If there is one place to protect your assets and expand your companies, it’s the Abu Dhabi Global Market. One of the leading financial centers and a premier business hub in the world, it is located on Al Maryah Island in Abu Dhabi, UAE. This place is the IT spot for your business.

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Operating in an independent legal system based on English common law, ADGM is a secure and internationally recognized financial hub offering 100% foreign ownership and a streamlined licensing and registration process through its own Registration Authority, making it the best place to invest, locate, and operate.

Setting up a holding company in the Abu Dhabi Global Market allows businesses to own shares, manage assets, and oversee operations without being involved in daily business activities.

The key benefits include 100% foreign ownership, no restrictions on moving money in and out of the UAE, and zero corporate tax on certain types of income, making ADGM an excellent choice for companies, family offices, and investors looking for a safe and tax-efficient place to manage their wealth.

With continuous new inventions and newer business ideas being introduced, the business world is growing and changing at a fast pace. Companies are now looking for places that offer stability and are tax-friendly so they can run successful businesses and protect their investments.

Abu Dhabi Global Market, with its strong legal protections, simple business setup, and access to international markets, has outshone as the top choice even in 2025. This is because the UAE is introducing new corporate tax laws, which require businesses to pay taxes on their profits. Therefore, structuring an ADGM holding company set up can help companies save on taxes while staying compliant with the law.

In the Abu Dhabi Global Market, businesses that meet certain conditions can benefit from 0% corporate tax. New rules such as Beneficial Ownership Rules, and whistleblower protections mean companies must follow stricter guidelines to remain in good standing.

Understanding and reading it all at once is not simple, therefore we have developed the ultimate guide to help you make informed decisions in building a holding company in ADGM.

Latest Regulatory Changes (2025) Affecting ADGM Holding Companies

To enhance transparency, governance, and compliance standards and establish the Global Market as the top financial hub, the UAE government has improvised the laws and regulations of the Abu Dhabi Global Market. These laws may even affect ADGM holding company operating within its jurisdiction.

Reduced Fees & Incorporation Costs

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Mandatory Whistleblower Protection (Effective May 31, 2025)

To ensure safety and protection of the individuals who report any financial misconduct, regulatory violations, or unethical business practices, the UAE government has made it compulsory for all ADGM-registered entities, including holding companies, to enforce a whistleblower protection policy. Effective May 31, 2025, all the companies must have clear internal reporting mechanisms to protect the individuals from any retaliations.

UAE Corporate Tax Implementation & Free Zone Exemption

The UAE has introduced corporate tax as part of its broader economic changes, meaning businesses now need to carefully review their tax responsibilities. The good news? If your holding company in ADGM qualifies as a Free Zone Person (QFZP), you can still enjoy a 0% corporate tax rate on certain types of income. To keep enjoying this benefit, businesses must follow the rules set by the Ministry of Finance and ensure they meet all the necessary conditions.

Beneficial Ownership & Transparency Rules

Employment & Anti-Money Laundering (AML) Compliance

ADGM is updating its labor laws, which will require businesses to have clearer employment contracts, fair workplace policies, and better worker protections.

Moreover, the anti-money laundering laws are tightening. Businesses must now conduct more thorough background checks, assess financial risks regularly, and follow stricter due diligence procedures to prevent illegal transactions.

AML are specifically enforced and applied to financial institutions, banks, insurance companies, virtual asset service providers and designated non-financial businesses and professions such as metal and stone dealers, real estate agents and brokers, trust and corporate service providers, auditors and independent accountants, lawyers, notaries and other legal professions.

Step-by-Step Guide to Setting Up a Holding Company in ADGM

Here is a step-by-step guide on how to set up a holding company in ADGM:

Choosing the Right Structure

The first things when starting the ADGM holding company set up is that you need to do is to decide upon the structure of your business. Understanding your business objectives clearly will help determine whether a Private Company Limited by Shares or an ADGM Special Purpose Vehicle (SPV) best aligns with your goals.

Private Company Limited by Shares is suitable for entities requiring operational flexibility, governance structures, and scalability for growth, whereas ADGM Special Purpose Vehicle (SPV) is ideal for asset isolation, structured financing arrangements, and specific investment activities with simplified governance.

You will also need to decide if you will be running an operational holding company or a passive holding company. An Operational holding company manages business and investments, whereas a passive holding company exists only to hold shares and assets without taking part in daily operations.

Documentation and Incorporation Process

The second step is the documentation and registration process for your company. In this step, you will need to prepare and gather the following documents:

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

After the documents are together and verified, you will decide upon your company’s name, ensuring that it is not being used by anyone else, by verifying through ADGM’s online system. Once your documents are all put together and your name and business structure is decided upon, you will now submit your application through the Abu Dhabi Global Market’s online portal and pay the registration fee.

The approvals usually take a few days to a couple of weeks, depending on the complexity of the application.Once your application is approved and your company is officially incorporated, you can move to the next step.

Post-Incorporation Steps

Now that your business has been registered in the Abu Dhabi Global Market, the next steps that you need to do post-incorporation are:

Obtaining establishment card and visas

Establishment card is an official document that is issued to you by the UAE immigration authorities. This card allows your company to apply for visas, hire employees, and interact with government departments. You may require visas for your employees or directors and with the establishment card you will be able to apply for it through the ADGM’s immigration services.

Office Space Requirements (Flexi-Desk vs. Physical Office)

Apart from all the legal documentation and visas required to run your business and conduct your daily operations, you will require office space. In ADGM holding company, you can have two different kinds of office spaces depending on your budget and business requirements: flexi-desk and physical office.

A flexi-desk is a cost-effective option that provides access to shared office facilities and is suitable for holding companies that don’t need an office on a full-time basis. However, a physical office, as the name suggests, is required for companies that have employees or conduct regular business operations.

Opening a Corporate Bank Account in the UAE

Since you are operating in one of the biggest financial hubs of the world, and forming a holding company in ADGM you will be dealing in a lot of money transactions and for that you require assistance in opening up a bank account. The banks will need your company’s registration documents, business plan, proof of ownership, and some details regarding your shareholders and directors to track the actual beneficiaries / owners.

Tax Registration

If your holding company in ADGM qualifies for 0% corporate tax, you may still need to register for tax and file reports periodically.

Renewal & Annual Compliance Checklist

Once your ADGM holding company is up and running, maintaining your position is very important. Every year, you’ll need to renew your company license, submit any required financial reports such as audited statements, and Beneficial Ownership filings.

If you have company visas, you will need to make sure that their renewal is done timely to avoid any disruptions. Staying compliant with the laws and regulations will keep your business running smoothly.

Compliance and Governance Requirements Under ADGM’s Framework (2025)

As your business is registered and operational in the Abu Dhabi Global Market, you are required to stay in compliance with the ADGM’s framework and regulations.

Corporate Governance Best Practices

According to the jurisdiction’s corporate governance, your holding company in ADGM must appoint at least one director, maintain clear shareholder agreements, and ensure proper decision-making structures are in place.

Annual Filings & Audit Requirements

Every ADGM registered company must submit their annual filings, and while all of them may not require an audit some will still need to go through the process of auditing. If your company meets certain thresholds like revenue or asset size, then your audited financial statements may be mandatory.

Beneficial Ownership Transparency & Reporting Rules

KYC Requirements

To avoid any financial crimes, ADGM has strict Know Your Customer (KYC) rules. Your company must perform a complete background check on its clients, maintain transaction records, and report suspicious activities to the authorities.

Employment Law & Whistleblower Policy Mandates

If your company hires employees in ADGM holding company, you will naturally have to comply with local employment laws, including fair contracts, workplace rights, and proper visa sponsorship. New whistleblower protections also require companies to establish clear policies for reporting misconduct while ensuring confidentiality and protection for whistleblowers.

Tax Benefits and Considerations for ADGM Holding Companies (2025)

If you’re setting up a company in the Abu Dhabi Global Market, you must be aware that this leading financial center offers amazing cost efficiency and exceptional tax benefits.

0% Corporate Tax for Qualifying Free Zone Persons

One of the most attractive features of ADGM is 0% corporate tax. Yes, it’s true; if your ADGM holding company meets the UAE’s Qualifying Free Zone Person (QFZP) criteria, you can enjoy a 0% corporate tax rate on eligible income streams. However, compliance with the QFZP rules is essential to maintain this benefit.

No Withholding Tax on Dividends, Interest, or Royalties

Another tax benefit offered to ADGM holding companies is that it does not impose withholding tax on outbound payments such as dividends, interest, or royalties. This makes it easier to move funds across borders without additional tax burdens.

No Capital Gains Tax on Share Disposals

Do you want to sell your shares in your ADGM holding company? You won’t have to worry about capital gains tax, as the UAE does not tax capital gains on the sale of shares, making it a favorable location for investment holdings.

UAE’s Extensive Double Tax Treaty Network

Did you know that the UAE has signed tax treaties with over 100 countries? These treaties help businesses avoid double taxation and enjoy the benefits of reduced tax rates on cross-border transactions.

Potential Impact of OECD’s Global Minimum Tax (Pillar Two) in 2025

The OECD’s Pillar Two framework has introduced a 15% global minimum tax for large multinational groups, which could impact some ADGM-based businesses. If your holding company is part of a multinational group with annual revenues exceeding €750 million, you may need to assess your tax exposure under these new rules.

VAT Considerations for Holding Companies

Although holding companies generally do not engage in VAT-liable activities, those providing management or consultancy services to subsidiaries may be required to register for VAT. Understanding your VAT obligations in advance can help you avoid compliance issues.

Comparing ADGM with Other Jurisdictions for Holding Companies

Having an ADGM holding company set up and running it in a different country is not an easy task, it requires substantial amounts of investment, and risks that must be dealt with and therefore, your decision should not be based on your instincts rather, on your research.

So make your pro/con list not just about what kind of company but what jurisdiction you want to run your company in. Here is a quick comparison of Abu Dhabi Global Market with other jurisdictions for holding companies:

Feature	ADGM	DIFC (Dubai)	Singapore	Luxembourg	Cayman Islands/BVI	Other Middle East Free Zones
Setup and Costs	Lower cost to set up and renew	More expensive to set up and renew	Higher costs	Higher costs	Cheaper setup, but fewer benefits	Costs vary by free zone
Corporate Tax	0% for most businesses	0% for most businesses	17% corporate tax	17-25% corporate tax	0% corporate tax	UAE Mainland has 9% tax, other free zones have different rules
Business Market	Growing in finance and investment	Large financial market	Strong in Asia-Pacific trade	Good access to European markets	Used mostly for offshore businesses	Some zones are well-developed, others are growing
Legal System	Based on English Common Law	Based on English Common Law	Mix of Common and Civil Law	Follows European Union laws	Offshore laws, more restrictions	Different free zones follow different rules
Rules and Compliance	Simple and easy to follow	More complex regulations	Strict rules and more paperwork	Very strict rules in the EU	Fewer rules but more international monitoring	Some zones require more local involvement
Reputation and Trust	Respected and internationally recognized	Respected and internationally recognized	Strong business reputation	Well-known in Europe	Seen as secretive, facing stricter rules	Some zones are well-known, others are not
Tax Treaties and Banking	Many tax treaties, easy banking access	Similar to ADGM	More tax treaties worldwide	Strong European tax agreements	Fewer tax treaties, harder to open bank accounts	Some zones have good tax agreements, others do not

Key Advantages of ADGM Holding Companies

ADGM holding companies don’t just get to enjoy tax benefits but they have substantial other advantages which makes the jurisdiction much more attractive to foreign investors.

100% Foreign Ownership & Control

The biggest attraction of having an ADGM holding company is that you get to enjoy 100% ownership of the business without any need for a local partner. Moreover you have complete control over all the decisions for your company.

Asset Protection & Legal Certainty

A key advantage of ADGM is its use of English common law which is considered and known as one of the most trusted legal systems worldwide. Businesses operate under clear, transparent regulations with strong contract enforcement, while ADGM’s independent courts ensure fair dispute resolution, giving companies peace of mind that their assets and interests are well protected.

Free Movement of Capital & Profits

Businesses in ADGM enjoy complete financial flexibility. Whether it’s profits, dividends, or capital investments, businesses can move money in and out of the UAE without restrictions, making it even easier for the international firms to manage their finances.

Strategic Location & Global Market Access

Being in ADGM means setting up in a key financial hub with strong global connections. Abu Dhabi’s location makes it easy for businesses to expand internationally. The Middle East, and GCC, offers great trade and investment opportunities, while the UAE’s trade agreements provide smooth access to Europe and Asia, and Africa’s growing market presents exciting new possibilities.

Access to a World-Class Financial Hub

ADGM is a top financial center where major banks, top law firms, and global investment experts come together. Businesses can easily access these services, making ADGM an excellent place to grow and succeed in the financial world.

Business-Friendly Policies & Government Support

Starting a business in ADGM is simple and efficient, as there is lesser paperwork, which makes company registration easier. Key sectors like finance, technology, and investment management also receive special incentives providing them and others a stable and reliable place to thrive.

Potential Challenges and Pitfalls in 2025

Regulatory Compliance Burden

The government has imposed multiple regulations to ensure a safe, smooth and stable system for businesses to operate in, such as reporting ownership details, meeting economic substance requirements, and following whistleblower policies. However these policies mean alot of paper work that needs to be done to stay compliant which can add up to your burden of running a business.

Economic Substance & Tax Benefits

Tax benefits sound very nice to the ears but it is essential to understand that in case your business does not meet the economic substance conditions to retain them. If your company fails to prove a physical presence in ADGM, conduct real business activities in the UAE, fail to show employees or key decision-makers based in ADGM, and spend enough money in the UAE to support operations, your company can lose its tax benefits.

Operational Limitations of SPVs

While there are many relaxations, the Special Purpose Vehicles (SPVs) in ADGM have restrictions, like they cannot hire staff or run commercial operations, and some banks may be unwilling to provide services to them.

Bank Account Opening Difficulties

Many ADGM companies struggle to open bank accounts due to strict approval processes and banks often require a lot of paperwork, and approvals which can also end up taking a long time.

Unexpected Costs

When you’re working in a premium financial hub, it means you will be paying the paying charges for the premium facilities. Having an ADGM holding company may result in some unexpected costs, such as renewal fees, service provider charges, and legal compliance expenses which can all add up over time.

International Tax Risks

Where zero-tax laws attract alot of investors and businesses, it can also attract scrutiny from foreign tax authorities and therefore businesses in ADGM must be aware of international tax laws, as some countries may apply extra tax rules.

Potential Policy Changes

ADGM is the upcoming hub for all the businesses and on the route to becoming the biggest business hub in the world, and this means that rules and regulations can still keep changing to ensure a stable, reliable and well developed business hub. This is why, if you’re coming to run your business in ADGM you must stay informed and adapt to any changes to ensure continued compliance.

Future Trends and Opportunities for ADGM Holding Companies

Regardless of the pitfalls, the ADGM is expected to seeing some serious growth in the future and here are some trends and opportunities that may not want to miss out;

It’s expected that many more companies are expected to continue relocating in the ADGM, which will further strengthen its position as a leading hub for holding structures.
ADGM is likely to introduce more legal structures, such as Trusts, Protected Cell Companies (PCCs), and Advanced SPVs, providing businesses with greater flexibility and asset protection.
More work is being done towards making deeper connections with international financial markets, making the market an attractive location for companies who want to go public (IPO) or expand globally.
With the growing focus on Environmental, Social, and Governance (ESG) investments, ADGM is expected to introduce more sustainable investment options and green finance initiatives.
As ADGM grows, competition with Dubai International Financial Centre (DIFC) and other emerging free zones in the UAE will increase, which is expected to drive further improvements in ADGM’s offerings.
Global economic shifts and regulatory changes may further strengthen ADGM’s appeal as a tax-efficient and business-friendly jurisdiction.

Conclusion

ADGM remains a top choice for holding companies in 2025 due to its strong regulations, global credibility, and business-friendly environment, making it ideal for multinational corporations, family offices, and investment funds.

To benefit from ADGM’s tax and legal advantages, businesses must plan strategically and comply with economic substance rules, financial reporting, and governance to avoid penalties and ensure long-term success.

With tax laws tightening worldwide, companies should act now to secure ADGM’s benefits before stricter policies arise. Given the complexities of corporate structuring and compliance, seeking expert legal, tax, and financial advice is essential for smooth setup and regulatory adherence.