Abu Dhabi Global Market

The Abu Dhabi Global Market Free Zone (ADGM) is a no-tax international financial services center located in Al Maryah Island in the heart of the UAE’s capital city, Abu Dhabi. The Free Zone is administered and governed by three independent authorities: the Registration Authority, the Financial Services Regulatory Authority (FSRA) and the ADGM Courts.

Companies incorporated in the ADGM enjoy a full corporate tax exemption until 2063, no foreign ownership restrictions, no limits on repatriation of profits, no withholding taxes, and access to a wide range of tax treaties.

ADGM companies can conduct business and trade within the Free Zones and internationally, but cannot do business with UAE residents out of Free Zone areas, without a UAE resident agent.

ADGM company regulations are based on the UK Companies Act of 2006. The ADGM has an English speaking common law environment and has its own courts and dispute resolution bodies. The Shariah Law does not apply within the free zone.

A company must have at all times a physical office that must be located in Al Maryah Island, Abu Dhabi, United Arab Emirates. However, physical office requirements vary according to business activity. For instance, SPVs and Fintech Companies may fulfill this requirement with a Virtual Office lease.

A company carrying out a commercial activity must be approved by the ADGM Registration authority and obtain a commercial license.

The non-financial and retail business activities permitted include professional service providers, such as law firms and accounting firms, consultants, business training providers, IT and HR/search firms, corporate headquarters, management offices and treasury functions, single family offices and proprietary investment entities, holding companies and special purpose vehicles, industry and professional associations, retail outlets, F&B and services, among others.

A commercial license will also be issued upon incorporation of the company. This document allows the company to conduct business in ADGM in accordance with the approved activities stated in the Commercial License. The license is valid for one year and renewable upon filing the relevant form, paying the relevant fee to the Registrar and completing other applicable requirements for Commercial License renewal.  

Companies conducting financial services activities are regulated by the Financial Services Regulatory Authority (FSRA) and must obtain the appropriate license to operate. These include international and Islamic banks, lending and credit institutions, fund management companies, investment businesses, hedge funds, banking, hedge funds, forex and securities dealers, cryptocurrency exchanges, among others.

Regulated companies must appoint an authorized individual resident in the UAE as senior executive officer, chief financial officer, compliance officer, and money laundering reporting officer – authorized individuals must be UAE residents.

There is an attractive SPV regime in ADGM. SPVs are private companies established to hold and protect assets, with the purpose of segregating financial and legal risk by ring-fencing assets and liabilities. SPVs can be established as subsidiaries, project or joint venture vehicles.

Protected Cell Companies (PCC) and Incorporated Cell Companies (ICC) are available. A Protected Cell Company (PCC) is a corporate structure in which a single legal entity is comprised of a core and several cells that have separate assets and liabilities. An Incorporated Cell Company (ICC) is similar to Protected Cell Company but adopts a fundamentally different approach to cells. The ICC incorporates each cell as a separate legal entity without the cell company needing to have any shareholder relationship with the relevant cell.

There is also an interesting investment company regime for open-ended and closed-ended funds investing the pooled capital of investors in financial securities.

Cryptocurrency exchanges also find a regulated environment to conduct their activities. They are regulated in a similar manner to “Multilateral Trading Facilities”.

Exchanges that include cryptos that are considered securities will remain subject to the relevant regulatory requirements and will need to obtain another license as a Recognized Investment Exchange or Recognized Clearing House.

In addition, the ADGM has recently introduced a new Tech Startup License, in which qualified startups will be able to access one of the most robust regulatory regimes for finance, flexibility in structuring options and a growing community of funds, banks, family offices, advisors and corporate partners.

The new Tech Start-up License is highly flexible, start-ups can receive a full operational license, the option to apply for four residential visas and meet the requirement for a registered address with a virtual office lease, at a nominal cost of USD 700.

ADGM is also an aviation powerhouse, including an ecosystem of aviation finance and aircraft leasing activities.

AGDM companies also have access to a solid, capitalized and high-quality banking sector.

Directors and employees, and their dependents are eligible for business visas. Usually, a company is authorized to apply for a visa per 100 sq. ft. of leased office space.

Visas are valid for up to 3 years, renewable, and entitle its holder to reside in any of the 7 states of UAE.