ADGM vs. DIFC: Which is the Better Choice for a Holding Company?
When you think about starting a business, there is one very important decision apart from deciding what product or service to sell that you need to decide on and which can make or break your business – the location of your business.
Yes, your business’s location is very important for you as it impacts how you will be able to access the potential markets, the regulatory environment that you will deal with, the tax benefits you will get to enjoy, and even the kind of talent you can attract.
In fact, choosing the right location opens the doors to networking and growth opportunities. And when it comes to holding company setup in the UAE, there are two major zones in the UAE: Abu Dhabi Global Market or Dubai International Financial Centre.
If you are looking to find out, what is a UAE holding company, or which zone supports your goals, then you’re in the right place.
With this article, we will help you decide which is the best zone for your business. Continue reading the article so you can make an informed decision.
Understanding Abu Dhabi Global Market (ADGM)
First things first, let’s talk about each location individually so you can identify the most suitable location, therefore let’s understand the Abu Dhabi Global Market.
What is ADGM? Overview, jurisdiction, and key benefits
The Abu Dhabi Global Market is a leading premier business hub in the world, located on Al Maryah Island in Abu Dhabi, UAE. It is a great place for businesses that are mainly focused on financial services, fintech (technology for finance), asset management, and international legal services. This makes it an ideal choice for a holding company Abu Dhabi Global Markets setup.
They follow the laws that are similar to those followed in the UK and are referred to as the English Common Law. Following these laws makes it easier for international investors and businesses to understand and comply with, making it an advantage for anyone considering an ADGM holding company set up.
Did you know that setting up a business in ADGM offers lowest corporate tax, full repatriation of profits, and benefits from the UAE’s wide network of tax treaties with other countries, making it a tax-efficient spot and an attraction for international investors, especially those planning a holding company ADGM registration.
Wondering what it will cost to set up a holding company in ADGM? Well, here is the good news, as per the recent news, setting up a company in ADGM in 2025 just got a lot more convenient for some and a little pricier for others.
If you are setting up a non-financial business, the registration fee has gone down by half from $10,000 to $5,000, and renewals are also down to $5,000. Retail businesses are even luckier, with getting registration for just $2,000 instead of the old $6,000.
If you’re launching a financial services business in ADGM, be aware that licensing fees have been revised upward starting in 2025. Tech startups continue to benefit from reduced rates compared to traditional firms.
In addition, all entities must pay a mandatory data protection fee. ADGM has also introduced updates to auditor registration, employment regulations, and compliance policies to align with international financial standards.
ADGM's Regulatory Environment
Regulatory environment in other words is the businessmen’s playbook that they need to comply with when running in Abu Dhabi Global Market. This jurisdiction is an attraction for investors as it offers a robust and progressive regulatory environment. Let’s look into it in a little detail.
Since ADGM is an independent jurisdiction, therefore it has its own regulatory system called the Financial Services Regulatory Authority (FSRA). This regulatory body ensures a fair, efficient, and responsive financial marketplace.
Moreover, the said regulatory body is also responsible for monitoring all financial services within ADGM. FSRA sets and enforces regulations that align with international standards. The FSRA is known to operate with a risk-based and outcome-focused strategy, fostering innovation all the while maintaining market integrity.
Regulations for Holding Companies in ADGM
Abu Dhabi Global Market follows the English common law to make it easier for all the international investors to comply with. Additionally, following this comprehensive legal framework provides the investors with a familiar and transparent structure. In order to ensure compliance with and efficiency of a smooth operational system in the jurisdiction, FSRA has established specific obligations for financial service companies.
Ease of Doing Business in ADGM
ADGM is not only known for the subpar tax benefits that it offers but also for a business friendly environment, streamlined registrations and an efficient regulatory system.
Furthermore, the FSRA also extends its assistance when it comes to facilitating the companies with government related services and providing licensing of legal entities. These facilities make ADGM a highly appealing hub for the business fraternity and has resulted in 160 firms choosing to operate in it.
Current Regulatory Trends and Recent FSRA Developments
In order to stay aligned with the global standards and emerging market trends, the FSRA continually enhances its regulatory framework. Recent developments include:
- Digital Assets Framework: In January 2025, the FSRA finalized enhancements to its regulatory framework so it can align with the Basel Committee on Banking Supervision (BCBS) principles. It implemented miscellaneous changes to support the evolving digital assets landscape.
- Virtual Assets Regulation: The FSRA has published guiding principles on its approach to virtual asset regulation and supervision. It outlines expectations for virtual asset service providers and reinforces ADGM’s position as a leading hub for digital innovation.
- Client Classification and Conduct Requirements: In August 2023, FSRA brought in new rules about how clients are classified, how their assets are kept safe, and how firms should behave. The goal was to make things better and safer for all the investors and keep the market as fair and trustworthy as possible.
Understanding Dubai International Financial Centre (DIFC)
Let’s look into the Dubai International Financial Centre, also known as DIFC. This free zone is amongst the prime locations for doing business, especially when it comes to DIFC holding company setup.
What is DIFC? Overview, jurisdiction, and key benefits.
The Dubai International Finance Center is a famous jurisdiction in the UAE that was established in 2004. This free zone has gained popularity as the global financial hub over time and truly for the right reasons.
Being an independent zone, DIFC also has its own legal and regulatory framework to ensure things run smoothly. Its location allows it to connect the financial centers of Europe and Asia, covering a region from Central Asia and the Indian subcontinent to North and East Africa. This setup allows trade and investment to move across the Middle East, Africa, and South Asia (MEASA) region.
DIFC offers several tax benefits. Such as 0% corporate tax for 50 years, allowing your business to keep more profits. You can send money in and out of the country without any restrictions, while fully owning your business, even if you are a foreign investor. Moreover, DIFC is part of the UAE’s tax treaty network, which can help reduce taxes in other countries as well.
DIFC focuses on industries like banking, finance, insurance, and financial technology. Many big global companies are based here, so if you setup a holding company in DIFC, you’ll be part of a strong and growing business community with great connections.
Here’s what you need to know when you setup holding company in DIFC. The regular DIFC holding company cost to register a company is around $8,000, and the yearly license fee is about $12,000. If you’re starting a financial service business, the costs might be more because of extra rules. But if you’re setting up a tech startup or a non-financial business, cost to set up a holding company in DIFC can be much cheaper.
DIFC has a license called the Innovation License in which the yearly fee is $1,500. For a holding company using a structure like an SPV, there is a separate setup and annual fee, although the exact amounts may vary based on the structure. Additionally, there is a data protection fee applicable at the time of registration and a recurring annual renewal fee, depending on the entity type.
DIFC’s Regulatory Environment
The Dubai International Financial Centre (DIFC) is a great place for starting a business. It has clear rules and strong support, especially for foreign investors and holding companies.
The Dubai Financial Services Authority (DFSA) is the regulatory authority that makes sure all businesses follow the rules. It watches over both financial and non-financial companies. DFSA helps companies grow while keeping things safe and fair.
If you want to set up a holding company in DIFC, DFSA makes the process easy to understand. Their rules help you run your business smoothly and legally.
Regulations for Holding Companies in DIFC
Setting up a DIFC holding company is simple. Many people use a type of company called an Special Purpose Vehicle or SPV. These are used to own shares, real estate, or other assets.
DFSA has a clear list of what you need to do. They’ve also made it easier recently for startups, family offices, and big companies to follow the rules.
Ease of Doing Business
DIFC is known for being easy to do business in. The system uses English common law, and everything is online, from forms to approvals.
You also get help from top service providers around the world. If you’re thinking about a holding company setup in the UAE, DIFC can be a smart and simple choice.
Recent DFSA Updates and Regulatory Shifts
The DFSA has recently updated its rules to match new global finance standards. These updates include:
- Faster license approvals for non-financial businesses.
- Changes to follow the new UAE Corporate Tax law.
- Better transparency to match standards set by the Organisation for Economic Co-operation and Development (OECD) and Base Erosion and Profit Shifting (BEPS) rules.
These changes help companies follow the rules more easily and make DIFC even stronger as a global financial center.
Quick Comparison Table: ADGM vs. DIFC at a Glance
| Aspect | ADGM | DIFC |
|---|---|---|
|
Legal system |
English Common Law |
English Common Law |
|
Setup and Licensing Costs |
Starts at $10,000 (non-financial), with renewals at $10,000 |
Starts at $8,000 for registration, $12,000 for renewal |
|
Regulatory Body |
Financial Services Regulatory Authority (FSRA) |
Dubai Financial Services Authority (DFSA) |
|
Core Focus Industries |
Financial Services, FinTech, Asset Management, Legal Services |
Financial Services, Real Estate, Tech, Insurance, Legal Services |
|
Flexibility for Holding Companies |
High – Flexible structures for holding companies |
High – Common structures like SPVs for holding companies |
|
Setup Timeline |
Approximately 1-3 weeks |
Approximately 2 - 4 weeks |
Key Differences Between ADGM and DIFC
Let’s look at some key differences between both Jurisdictions
Legal and Regulatory Framework
The Dubai Financial Services Authority (DFSA) is the group that looks after how things run in DIFC. They make sure all companies, especially financial ones, follow the rules. Their job is to keep the system fair, safe, and working well for everyone.
If you want to setup holding company in DIFC, there are a few clear steps. Most people set it up as a Special Purpose Vehicle or SPV. That’s just a company made to hold shares in other businesses. You’ll need to tell DFSA what your company plans to do, who owns it, and then follow their process.
The cost to set up a holding company in DIFC usually starts at $8,000. Each year, you’ll also need to pay a renewal fee of about $12,000. But if you’re a tech startup or a non-financial company, you might get a cheaper option like the Innovation License. Just remember, if you’re thinking about Abu Dhabi (ADGM) instead of DIFC, the rules and costs may be different.
DIFC makes business setup pretty easy. They follow English common law like the UK, and you can also do most of the setup online, which saves time, especially if you’re from another country.
The DFSA also updates its rules often to keep up with the world. This includes changes for fintech, digital assets, and faster licenses for some businesses. So, DIFC stays modern, smooth, and safe for companies.
Cost Comparison: Setting Up and Maintaining a Holding Company in ADGM vs. DIFC
If you are setting up a holding company in the UAE, it is important to understand all the costs involved. Both Abu Dhabi Global Market and Dubai International Financial Centre offer attractive benefits. But the costs of registration, operational expenses, and office infrastructure can differ. Here’s a simple breakdown of the key costs in both jurisdictions:
1. Registration Fees: ADGM vs. DIFC
When you’re setting up a company, the first thing you’ll need to think about is the registration fee. In ADGM, non-financial businesses now pay $5,000, and tech startups get a sweet deal at $1,500. If you’re in financial services, the cost is higher, $16,700. There’s also a $300 data protection fee added to the bill.
At DIFC, most businesses face standard setup fees, but tech startups and non-financial companies can take advantage of the Innovation License, which has more affordable initial and annual fees. In addition to these, businesses must also consider a data protection fee that involves both an upfront payment and an annual renewal fee.
2. Ongoing Operational Costs
After the initial registration, businesses must also consider renewal fees each year. In ADGM, non-financial businesses pay a $5,000 renewal fee, while tech startups continue at $1,500 per year. Financial firms in ADGM should plan for $16,200 annually to maintain their license.
In DIFC, the standard renewal cost is around $12,000 for most companies. However, holding companies or special purpose vehicles (SPVs) pay much less, about $1,000 per year. Tech companies using the Innovation License also benefit from the lower $1,500 annual renewal.
3. Office Space and Infrastructure Costs
Office space is an important consideration when setting up a business. In ADGM, businesses are not required to have a dedicated office, although they may choose to rent one. The cost of office space can vary depending on the size and location.
Similarly, DIFC offers flexible workspace solutions, including serviced offices. The cost of office space in DIFC can also vary, with prices influenced by the features and size of the office chosen.
Industry Focus and Ecosystem
Selecting the right zone depends on your industry and the type of business community you wish to join. Understanding which sectors thrive in ADGM and DIFC is a key factor in making an informed decision.
Which sectors thrive in ADGM?
ADGM is a great choice for tech startups, fintech companies, family offices, and holding companies. It supports new and growing businesses with flexible rules and lower setup costs. Many digital and innovation-led companies are choosing ADGM for its modern approach and startup-friendly environment.
Which sectors thrive in DIFC?
DIFC is well known for financial services. This includes banking, insurance, investment firms, and legal services. It is home to many global financial companies. If you’re in traditional finance or need access to investors, DIFC offers a powerful network.
Networking and business opportunities
Both zones offer strong ecosystems, but in different ways. DIFC has a large and mature network of global businesses, legal firms, and banks. ADGM has a fast-growing tech scene with lots of support for innovation and digital business. Both offer chances to connect with key players in your industry.
Taxation and Financial Benefits
Let’s see the differences between Taxation and Financial Benefits that both the jurisdictions offer.
Corporate Tax Rates and Incentives
ADGM and DIFC both offer a 0% corporate tax on qualifying income. To get this, your business must meet the conditions of a Qualifying Free Zone Person (QFZP). But if your business fails to qualify, then you’ll pay 9% corporate tax on non-qualifying income.
Building on the taxation point, in ADGM there’s no personal income tax and you can send all profits abroad. However, in DIFC there are no taxes on capital gains, dividends, or interest for qualifying income.
The UAE has over 130 double tax treaties with other countries. These treaties help you avoid paying tax twice on the same income. This is great for international businesses, especially for holding companies and investors.
Repatriation of Profits and Capital
A significant advantage of setting up a company in ADGM or DIFC is the freedom to send back profits and capital to your home country without any restrictions.
In ADGM, businesses can send their earnings and capital back to their home country freely. There are no limits, and no taxes are applied when transferring funds abroad. This makes it a great choice for international investors and holding companies.
In DIFC, the same benefit applies. Companies are allowed full repatriation of profits, dividends, and capital with no currency controls. This helps businesses move money efficiently, especially those with global operations.
If your goal is to keep financial control and flexibility, both ADGM and DIFC offer a smooth and investor-friendly approach.
Financial Services and Banking Options
ADGM and DIFC are both good places if your business needs banks and financial systems. They’ve got lots of banks and finance companies, so it’s easy to send or receive payments.
In ADGM, you can find all kinds of finance services, like investment banks, companies that manage money for people, and new tech-based finance businesses. They also have their own regulatory body, FSRA, to ensure everything is safe and fair.
DIFC is even bigger. There are more than 600 financial companies there. Big banks, insurance companies, and people who invest money all work there. It’s a main spot for finance in the Middle East and Africa.
You can open a bank account in both places. But it takes some time. You have to give your documents and go through checks. Once your company is ready, keeping the account is simple.
Strategic Relevance for International Investors
If you’re planning to grow your business across the world, ADGM and DIFC are great places to start. The UAE has big future goals called Vision 2030, and both these places are a big part of that plan. The country wants more businesses, less oil dependence, and more jobs.
Both jurisdictions follow important global rules that make things fair and safe for international businesses. So, if you’re from another country, you’ll feel more secure doing business here. The rules are clear, and things work smoothly.
DIFC has been around longer and is more famous. It connects well with markets in the Middle East, Africa, and South Asia. It’s kind of like a busy international crossroads. ADGM is newer but growing super fast. It’s good for tech companies, finance, and investment businesses.
So if you want to set up a holding company setup in the UAE, or just need a place where your business can grow strong and steady, both are great picks. You get tax perks, strong laws, and easy links to the rest of the world.
Factors to Consider When Choosing
Here is what you need to consider when choosing your jurisdiction.
Your Business Needs and Objectives
Before picking ADGM or DIFC, think about what your business really needs. Start by looking at your goals. Are you aiming for global expansion? Do you need access to investors, or want to hold shares in other companies?
Both zones are strong—but the best choice depends on where you see your company in the next 5 to 10 years. If you’re a tech startup, ADGM might suit you better. If you need access to a large financial network, DIFC could be the right fit.
Expert Insight:
“Your business structure should grow with your company. Pick a jurisdiction that doesn’t just work for today, but also supports your future plans.”
Target Market and Industry
Where you set up your business really depends on who you’re trying to reach.
If most of your clients or investors are in the Middle East, Africa, or South Asia, then DIFC might be the better fit. It’s been around longer, and it’s well-connected in the finance world.
But if you’re in tech or looking for a quicker setup, ADGM could be a smarter move. It’s newer but growing fast, and a lot of startups like it for the simpler rules and good support. Also think about your industry. Some businesses need specific approvals, and one zone might make that easier than the other.
At the end of the day, go where you’ll get the right backing for your kind of work and where your customers are.
Compliance Requirements and Reporting
Setting up your business is just the first step, staying compliant is what keeps it running.
Both ADGM and DIFC have rules you need to follow after you’re all set up. These include filing annual returns, keeping proper records, and submitting financial statements on time.
And now, with the new Corporate Tax rules in the UAE, things have shifted a bit. You’ll need to keep an even closer eye on your profits and how they’re reported. This applies even more if you’re not a Qualifying Free Zone Person (QFZP).
The good news? Both jurisdictions are pretty clear about what they expect. They also publish updates when laws change. Still, it helps to have a local advisor or tax consultant keeping tabs on things, especially with new tax laws rolling out.
Making Your Decision: ADGM or DIFC?
Choosing between ADGM and DIFC really comes down to what kind of business you have and where you see it heading. DIFC has been around longer. It’s busy, well-known, and packed with banks, law firms, and big finance names. If you’re working in traditional finance or want access to global investors, DIFC might feel like a better fit.
ADGM is newer but catching up fast. It’s especially good for tech startups, holding companies, and businesses that want a bit more flexibility in structure and pricing. It’s also known for being slightly easier to deal with when it comes to setup. When considering holding company setup in the UAE, both ADGM and DIFC offer strong advantages depending on your priorities. Before you decide, think about your goals; where your market is, what kind of license you’ll need, and how fast you want to scale.
Bottom line is that both jurisdictions are excellent options. You just need the one that fits your business best. But if you still think you need an opinion, then experts at ADEPTs can help you figure out what’s right for your next step.
FAQs:
Usually, it takes around 5 to 10 working days if your documents are complete and approved quickly. Sometimes it can be faster if everything is in place. Whether you’re working on a holding company setup in the UAE or specifically planning to setup a holding company in DIFC or ADGM, proper documentation speeds up the process.
Yes, both offer UAE residency visas once your company is set up. The number of visas depends on your office type and size.
No major restrictions. A holding company can own shares, real estate, intellectual property, or other assets, locally or globally, as long as it matches your license purpose. Whether it’s a difc holding company or a holding company in Abu Dhabi, flexibility in asset ownership is a shared advantage.
There’s no fixed minimum capital in ADGM for SPVs. DIFC also doesn’t require a large capital amount for SPVs. It’s more about maintaining a proper structure and meeting regulatory requirements, making the cost to set up a holding company in DIFC and ADGM relatively affordable for many business types.
Yes, both are often used to manage or hold shares in international companies. You can operate globally while being registered in the UAE. This is one of the key reasons businesses consider holding company setup in the UAE, especially through platforms like DIFC or ADGM.
The key challenge is staying up to date with ongoing reporting, new tax laws (like the UAE Corporate Tax), and regulatory filings. It’s important to stay organized or work with a trusted advisor to avoid penalties. For both ADGM and DIFC holding companies, compliance is crucial for long-term stability, especially considering changes in tax rules that may impact the difc holding company cost or filing requirements.
References
- Abu Dhabi Economic Vision 2030. https://u.ae/en/about-the-uae/strategies-initiatives-and-awards/strategies-plans-and-visions/finance-and-economy/abu-dhabi-economic-vision-2030.
- ADGM Announces Fee Revision for Commercial Licences Starting 2025. 17 July 2024,https://www.adgm.com/media/announcements/adgm-announces-fee-revision-for-commercial–licences-starting-2025.
- ADGM’s FSRA Publishes Guiding Principles on Its Approach to Virtual Asset Regulation and Supervision. https://www.adgm.com/media/announcements/adgm-publishes-guiding-principles-on-its-approach-to-virtual-asset-regulation-and-supervision.
- BASIC TAX INFORMATION BULLETIN (FREE ZONE PERSONS). https://tax.gov.ae/Datafolder/Files/Pdf/2024/CT%20Bulletin/Basic%20Tax%20Information%20bulletin-%20Free%20Zone%20Person-English.pdf.
- DIFC Fee Schedule for Registration and Renewal. https://academy.difc.ae/services/registration-practitioners/fee-schedule-registration-and-renewal.
- ‘DIFC Innovation License’. DIFC, https://landing.difc.ae/innovation-license-offer/.
- Double Taxation Agreements. https://mof.gov.ae/double-taxation-agreements/.
- Financial Services Regulatory Authority (FSRA) | ADGM. 22 May 2024, https://www.adgm.com/financial-services-regulatory-authority.
- Special Purpose Vehicles: A Cornerstone of Business Structuring. https://www.difc.com/whats-on/insights/special-purpose-vehicles-a-cornerstone-of-business-structuring.
- The FSRA of ADGM Imposes a Financial Penalty of USD 504,000 on Aarna Capital Limited (ACL). 10 Apr. 2023, https://www.adgm.com/media/announcements/adgm-fsra-finalises-enhancements-to-its-regulatory-framework-for-continued-alignment-with-bcbs-principles.
- Your Business Gateway | ADGM. 17 Apr. 2024, https://www.adgm.com/business.
- The DFSA Is the Independent Regulator of Financial Services, https://www.dfsa.ae.
