How to Start a holding company in the UAE

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.

Here is how to start a holding company in the UAE

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.

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.

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.