The UAE has made its name as a global hub for businesses across a wide range of industries. Few sectors do not thrive out here. The country boasts hugely successful e-commerce, industrial, manufacturing, trading, and service sectors.
But while these types of businesses may generate the headlines, there are many more that see just as much success in the UAE. And many do not carry out any standalone commercial activities in the region.
I am talking about holding companies. And if you’re looking to purchase real estate or hold stock or other assets, it is likely the most suitable setup for your needs.
What is a UAE holding company?
A clue to the operations of a holding company lies in its name. In short, holding companies can only hold stakes in subsidiary companies or own other financial assets such as real estate.
A holding company is not permitted to conduct any commercial activity such as trading in goods or offering advisory services.
Holding companies can be incorporated in the UAE mainland or in many of its free zones. The free zone option is usually preferable for many entrepreneurs and business owners thanks to its simple formation and licensing process, along with a range of other benefits.
Free zones such as Abu Dhabi Global market, for example, allow for the formation of holding companies – also known as Special Purpose Vehicles (SPVs) – with no restrictions on the number of shareholders, no currency restrictions, and no minimum share capital requirement.
What is ADGM?
The Abu Dhabi Global Market (ADGM) is an international financial free zone where English Common Law is directly applied in the Middle East for the first time.
Three independent authorities govern it – the Registration Authority (RA), the Financial Services Regulatory Authority (FSRA), and ADGM Courts – making it one of the of the most trusted financial centres in the region.
ADGM is globally recognised for its robust, progressive, and responsive business-friendly ecosystem. Since its launch six years ago, ADGM has issued 2,385 registrations. Today it is home to a 22-thousand-strong workforce and has over $26bn worth of assets under management.
Can a foreigner start a holding company in the UAE?
Absolutely. One of the many benefits of ADGM is that it allows for 100% foreign ownership of UAE holding companies.
Benefits of starting a holding company in ADGM, UAE
If you’re looking to purchase real estate, hold stock in other companies, or hold other assets such as intellectual property, an ADGM holding company is a great option.
Offering a separate legal identity from its owner or owners, ADGM holding companies give entrepreneurs incredible freedom while offering protection against risk and financial loss.
With no share capital requirement and no need to take on a physical office, a holding company is a cost-effective route to business ownership. And that is just one of the many benefits of starting such an organisation.
ADGM incorporation is based on English Common Law which gives businesses the security of a time-tested legal framework backed by the English Courts.
Other benefits of ADGM holding companies include:
- Minimum requirement of only one shareholder and one director
- Ability to customise Articles of Association
- UAE Tax Residency and access to UAE Double Tax Treaty Network
- Migration and Continuation of existing corporate entities
- No attestation of documents
- Multiple classes of shares
Steps to register a company in ADGM, UAE
ADGM’s company incorporation process is designed to be as simple as possible. However, forming any business in the UAE requires understanding its business environment, company structures, and licensing processes.
That’s why before starting the process of incorporating your UAE holding company, you should consult with an expert in UAE company formation, such as Business Incorporation Zone (BIZ). We can manage the entire process for you, ensuring that your documents are in order before liaising with ADGM and submitting and managing your application.
When you work with BIZ, forming an ADGM holding company takes just four simple steps:
- Assemble and review documents including business plan, article of association, passport copies of shareholders and signatories.
- Application submission via official ADGM portal.
- ADGM application review and approval.
- Completion and licensed received.
The application process usually takes just ten working days.
What is the cost of a holding company license in ADGM, UAE?
The cost of incorporating a holding company or SPV at ADGM is USD 3,000 for the first year. This comprises a USD 1,600 ADGM license fee and a USD 1,400 office address and professional services fee.
The ADGM fee reduces to USD 1,200 in the second year, bringing the annual price down to USD 2,600.
Are you ready to start your holding company at ADGM?
Hopefully, this guide has made clear that if you’re armed with the right knowledge, setting up a holding company in ADGM doesn’t have to be overly complex or expensive.
That being said, it does require a level of prior knowledge of the process. What’s more, it is important to note that the application process is only straightforward if your license application is complete at the time of submission and free from errors.
To help you ensure that this is the case, it’s a good idea to work with a company formation specialist such as Business Incorporation Zone when establishing a new company in the UAE.
We are a team of company registration professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.
As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.
We also offer visa and immigration services and can handle all government formalities, permissions, work permits and visa applications required to trade in the UAE.
In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with running your business.