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Abu Dhabi Global Market

Private company limited by shares

The Abu Dhabi Global Market Free Zone (ADGM) is a no-tax international financial services centre 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 the business activity. For instance, SPVs and Fintech Companies may fulfil 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.

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. License is valid for one year and renewable upon filing the relevant form, paying 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 authorised individual resident in the UAE as senior executive officer, chief financial officer, compliance officer and money laundering reporting officer – authorised individuals must be UAE residents.

There is an attractive SPV regime in ADGM. SPVs are private companies established to hold and protect assets, with 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.

Taxes

Corporate income tax – Companies incorporated in the Abu Dhabi Global Market Free Zone under the Companies Regulations are exempt from all forms of taxation. All trading income, investment income, capital gains, compensations, rents and royalties are free from taxes.

There is a guarantee of no taxation for 50 years and no restrictions on repatriating profits.

Other taxes – In U.A.E. there is no personal income tax, capital gains tax, real property tax, inheritance tax or estate duty, capital transfer tax, gifts tax or wealth tax.

There is a real property tax levied on the transfer of properties, at rates that vary from 2% to 4%, depending on the Emirate where the property is located. Some municipalities, e.g. Dubai, also levy an annual property tax on the assessed rental value of the property.

V.A.T is levied at a 5% on most goods and services.

  • Offshore Income Tax Exemption
  • Offshore capital gains tax exemption
  • Offshore dividends tax exemption
  • CFC Rules
  • Thin Capitalisation Rules
  • Patent Box
  • Tax Incentives & Credits
  • Property Tax
  • Wealth tax
  • Estate inheritance tax
  • Transfer tax
  • Capital duties
  • 0% Offshore Income Tax Rate
  • 0% Corporate Tax Rate
  • 0% Capital Gains Tax Rate
  • 0% Dividends Received
  • 0% Dividends Withholding Tax Rate
  • 0% Interests Withholding Tax Rate
  • 0% Royalties Withholding Tax Rate
  • 0% Personal Income Tax Rate
  • 5% VAT Rate
  • 76 Tax Treaties

Country details

United Arab Emirates
AED
Abu Dhabi
Asia
a r - A E , f a , e n , h i , u r
4975593

The United Arab Emirates is a former British protectorate and currently a federation of the Middle East, located to the east of the Arabian Peninsula. It borders Oman to the southeast, with the Persian Gulf to the north and Saudi Arabia to the west and south. It is composed of a hybrid monarchy consisting of 7 emirates, Abu Dhabi, Ajman, Dubai, Fujairah, Ras al Khaimah and Umm al Qaywayn.

It has a population of 9 million. Its capital is Abu Dhabi, but the most populated and popular city is Dubai. Arabic and English are their official languages. The official currency is the United Arab Emirates Dirham (AED), pegged to the US dollar at an exchange rate of 3.67:1.

The Supreme Council, made up of each emirate Sheikhs, is the highest political decision-making body in the country. Although each Emirate retains a considered political, economic and judicial autonomy, with different rules and regulations.

The federation is one of the richest countries in the world, supported by a liberal and open economy with the eighth highest per capita income worldwide and a considerable annual trade surplus.

Having the seventh largest oil reserve in the world, its economy is clearly dependent on this commodity fluctuations. In recent years efforts have been made to diversify the economy, be less oil-dependent and develop sectors such as retail, financial and tourism.

A clear example of this strategy is the establishment of free zones to attract foreign capital to invigorate the private business sector.

The Ras Al Khaimah’s Free Zones are some of the most attractive areas to establish a business in UAE and one of the fastest growing business hubs. The emirate of Ras al Khaimah is in the northern part of the country, well connected by express roads, approximately 1-hour drive from Dubai. One of the biggest advantages of RAK is that business and living costs are one of the most affordable of the country.

The area is comprised of four economic clusters, the business park for offices, the industrial park for heavy industries and warehousing, the technological park for trade and light manufacturing, and the academic area for educational organizations.

Tax treaties

Country Type Date Signed
Tunisia DTC  1996-04-10
Portugal DTC  2011-01-17
Comoros DTC  2015-03-26
Slovenia DTC  2013-10-12
Guinea DTC  2011-11-13
Georgia DTC  2010-11-25
Morocco DTC  1999-02-09
Bangladesh DTC  2011-01-17
Algeria DTC  2001-04-24
Uruguay DTC  2014-10-10
Switzerland DTC  2011-10-06
Uzbekistan DTC  2007-10-26
Estonia DTC  2011-04-20
Mexico DTC  2012-11-20
Sudan DTC  2001-03-15
Montenegro DTC  2012-03-26
Hungary DTC  2013-04-30
Libya DTC  2013-04-01
Fiji DTC  2012-08-01
Mauritius DTC  2006-09-18
Panama DTC  2012-10-13
Serbia DTC  2013-01-13
Yemen DTC  2001-02-13
Lebanon DTC  1998-05-17
Lithuania DTC  2013-06-30
Cyprus DTC  2011-02-27
Latvia DTC  2012-03-11
Kyrgyzstan DTC  2014-12-07
Venezuela DTC  2010-12-11
Armenia DTC  2002-04-22
Seychelles DTC  2006-09-18
Egypt DTC  1994-12-04
Russian Federation DTC  2011-12-07
Ireland DTC  2010-07-01
Kenya DTC  2011-11-11
Japan DTC  2013-05-02
Luxembourg DTC  2005-11-20
Poland DTC  1993-01-31
Spain DTC  2006-02-04
Romania DTC  1993-04-11
Belgium DTC  1996-09-30
Mongolia DTC  2001-02-21
Ukraine DTC  2003-01-22
Korea, Republic of DTC  2003-09-22
Kazakhstan DTC  2008-12-22
Thailand DTC  2000-03-01
Pakistan DTC  1993-02-07
Bulgaria DTC  2007-06-26
Czech Republic DTC  1996-09-30
New Zealand DTC  2003-10-22
Austria DTC  2003-09-22
Malta DTC  2006-03-13
Netherlands DTC  2007-05-08
Italy DTC  1995-01-22
Germany DTC  2010-07-01
Mozambique DTC  2003-09-24
Turkmenistan DTC  1998-06-09
China DTC  1993-07-01
Philippines DTC  2003-09-21
Finland DTC  1996-03-12
Greece DTC  2010-01-18
Singapore DTC  1995-12-01
Belarus DTC  2000-02-27
France DTC  1989-07-19
Tajikistan DTC  1995-12-17
India DTC  1992-04-29
Malaysia DTC  1995-11-28
Turkey DTC  1993-01-29
Sri Lanka DTC  1992-07-07
Indonesia DTC  1995-11-30
Azerbaijan DTC  2006-11-20
Bosnia and Herzegovina DTC  2006-09-18
Canada DTC  2002-06-09
Viet nam DTC  2009-02-16
Syrian Arab Republic DTC  2000-01-26
Brunei Darussalam DTC  2013-05-21

Tax treaties Map

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