Consolidation and management of assets is one of the key points of concern for investors worldwide, and even more so in the GCC. A growing investor ecosystem, coupled with the high density of family wealth in the region, call for robust structures that can help high net worth individuals manage their investments. One such structure is an ADGM holding company. This article contains details for an operational holding company, that is, a holding company that actively manages the assets under it. This holding company is eligible for visas and hence can employ staff to carry out their operations. 

For a passive holding company, where the objective is to hold shares, Intellectual Property or Real Property, you can read our article on Special Purpose Vehicles in the ADGM. 

What is a holding company?

A holding company consolidates investments, be it shares in other companies or property, under a common umbrella, for ease of management and reporting. Such companies do not usually carry out a trade or service – they merely manage existing investments. The management team of the holding company also seeks to make new investments, based on certain pre-determined criteria, to expand their existing portfolios.

The Abu Dhabi Global Market, or ADGM, provides an excellent corporate structure to facilitate such activities – an ADGM holding company.

Why setup a holding company in the ADGM?

The ADGM is an upcoming financial center in the region for business and fintech. ADGM holding companies can be used to hold assets within the UAE, the GCC, or anywhere else in the world. These include real property and shares in other companies in the UAE and worldwide. Here are some reasons why setting up a holding company in the ADGM makes sense.

The maximum number of visas you can apply for will depend on both the type of business you plan on setting up as well as the size of the premises you lease in the ADGM.

Specific Advantages

Here are some specific advantages of establishing in the Abu Dhabi Global Market

LEGAL AND REGULATORY FRAMEWORK

• The legal framework supports cross-border activities
• 100% foreign ownership permitted
• No restriction on foreign talent or employees
• No restrictions on capital repatriation

TAX BENEFITS

• Zero tax for 50 years on profits, capital or assets 
• Zero tax on employee income

COUNTERPARTY CONFIDENCE

• Well regarded, independent regulator
• Independent, English-speaking, common law judicial system
• Distinct from the UAE legal system
• Risk-based regulatory approach

DIVERSE ECOSYSTEM

• Central to regional deal making
• High concentration of international firms, investment funds, wealth management firms, banks, and financial institutions
• World-class regional and international law and auditing firms, and other professional services
• A growing fund domicile in the region

GEOGRAPHIC EPICENTRE

• Management offices, holding companies and family offices are located closer to the assets they own or manage
• The Middle East, Africa and South Asia (MEASA) is increasingly the centre of gravity for the global economy
• The UAE plays a central role in the growing South-South trade, principally between Asia and Africa
• Well-positioned to harness the potential of emerging markets

Costs Of Setting Up A Holding Company In ADGM

Setting up an AGDM Holding Company involves the following interactions:

Registration Authority (RA)

The RA helps to set up the legal structure of the ADGM Holding Company. In most cases, this would be a Private Company Limited by Shares. Shareholders can be individual, or corporate. The costs for setting up such a company are:

Application for reserving a name: US$ 200

Application for Incorporation of a Private Company Limited by Shares: US$ 1,500

Commercial License on Incorporation: US$ 4,000 (annual fee)

Business Activity fees: US$ 4000 (annual fee)

Data Protection

The data protection notification is part of the process of registering a new entity in the ADGM. The costs involved are as follows:

Registration - US$ 300

Annual renewal – US$ 100

Office spaces

Every entity registered in the ADGM is required to lease a physical office. You can choose from business center options, or physical spaces within the ADGM.

Here is an indication of the prevailing rates:

Business Centre – from a one-desk office at US$ 19,000.

Fitted Offices – from US$ 55 per square foot.

Visas

Establishment Card Application – US$ 273

E-channel – US$ 1,100 (one-time)

E-channel deposit – US$ 1,360

Visas (per visa) – from US$ 1,500

Costs Summary