ADGM (Abu Dhabi Global Market): A Comprehensive Guide

28 Mar ADGM (Abu Dhabi Global Market): A Comprehensive Guide

The Abu Dhabi Global Market (ADGM) is a hub for economic growth and innovation, with over 70% of its companies planning to expand their workforce in 2024. ADGM is known for its advanced regulatory frameworks and use of English common law, which create a dependable business environment.

What is ADGM

The Abu Dhabi Global Market (ADGM) encompasses the expansive territories of Al Maryah Island and Al Reem Island, boasting a footprint of 14.38 million square meters. This area positions ADGM among the elite financial districts globally.

Many businesses gravitate towards ADGM, including finance sectors, asset management firms, burgeoning fintech startups, multinational corporations, and niche service providers. The market offers comprehensive business solutions, such as various legal entity structures, streamlined registration processes, expert regulatory guidance, and conflict resolution services, all within a vibrant professional community.

Established in late October 2015, the market has quickly become known for progressive regulatory frameworks and the integration of English common law into the legal system, enhancing company formation and business operations.

Benefits of Business Setup in ADGM

Setting up a company in the Abu Dhabi Global Market (ADGM) provides numerous benefits, such as:

• Legal System: Autonomous judiciary with British Common Law.
• Digital Judiciary: Efficient E-Courts system.
• Foreign Ownership: 100% foreign ownership permitted.
• Business Activities: Wide range of commercial options.
• Tax Benefits: No income/profit taxes; full profit repatriation.
• Tax Agreements: Access to UAE’s double taxation treaties.

ADGM Licenses

Financial

It covers various sectors such as:

• Banking
• Capital Markets
• Wealth and Asset Management
• Others

Non-Financial

It allows for the establishment of Professional and business services Corporate Solutions, which covers:

• Corporate Headquarters
• Corporate Treasury
• Holding Company
• Professional Associations
• Tech Startups
• Family Offices and Foundations
• Professional Service Providers
• Special Purpose Vehicles (SPV)

Retail

It covers manufacturing textiles, jewelry, food products, and the trade of motor vehicles, food and beverage, and other goods. ADGM’s retail activities include photography, vehicle and machinery rental and leasing, art galleries, restaurants, and other related activities.

ADGM SPV

The Abu Dhabi Global Market’s Special Purpose Vehicle (SPV) is a standout option for businesses and individuals. It’s crafted to act as a separate entity that safeguards assets and liabilities, offering a clear-cut way to handle investments and responsibilities with enhanced safety and accuracy.

Benefits of ADGM SPV

• Tax Positioning: ADGM SPVs can seek a Tax Residency Certificate from the UAE Federal Tax Authority, which, subject to certain conditions, allows them to use the UAE’s network of tax treaties.
• Company Relocation and Continuation: ADGM welcomes the transfer and continuation of companies from other regions into its jurisdiction.
• Office Representation: An agent or corporate service provider can represent the SPV by providing a registered office address in ADGM.
• Tax Optimization: The SPV can leverage the UAE’s network of tax treaties to enhance tax efficiency.
• Streamlined Paperwork: ADGM SPVs don’t need corporate documents to be attested, simplifying the paperwork process.

Legal Structures at ADGM

ADGM offers a wide range of business structures to use, such as:

• Private Company Limited by Shares
• Private Company Limited by Guarantee
• Private Company Unlimited with shares
• Private Company Unlimited without shares
• Restricted Scope Company
• Public Company Limited by shares
• Branch of a Foreign Company

Setting Up a Business in the Abu Dhabi Global Market

Required Documentation for Company Formation

To initiate the incorporation process within the Abu Dhabi Global Market, the following documents are essential:

• Passport, visa, and Emirates ID copies for directors, secretaries, and shareholders.
• Application form for company name registration.
• Business plan with goals and strategies.
• Capital structure and share distribution declaration.
• Guarantee statement for limited guarantee companies.
• Proposed company officers’ details.
• Trade name reservation proof.
• Company headquarters address declaration.
• Articles of Association (AOA) and board resolution copy.
• Office space lease agreement.
• Restricted scope declaration, if needed.
• Data protection and beneficial ownership forms.
• Additional documents are required for specific business activities.

Process of Company Formation

Step 1: Name Reservation and Registered Office Selection

Choose a company name following the ADGM Business and Company Names Rules 2016 and select a registered office, which must be situated on Al Maryah Island, Abu Dhabi.

Step 2: Business Plan Preparation and Document Review

Prepare a brief business plan and familiarize yourself with the required documents for your filing. Apply along with all necessary documentation to the Registrar through the ADGM’s online system.

Step 3: Issuance of Incorporation Certificate and Commercial License

Ensure that all information is submitted correctly. Upon the Registrar’s satisfaction with the accuracy of the documents and information, the company will be issued a certificate of incorporation and a commercial license.

Annual Requirements

• Annual Account Filing:
  • Maintain accounting records per International Accounting Standards.
  • Accounting Reference Period: 6-18 months from incorporation.
  • Public companies: Present accounts at a general meeting.
  • Private companies: Circulate accounts to members upon filing.
  • Directors must prepare and deliver reports to the Registrar annually (excludes RSCs and Foundations).
• Annual Returns:
  • File annual returns within one month of the incorporation anniversary.
  • Confirm details like registered office, directors, secretary, business activities, capital, and shareholder info.
  • Annual Returns and Annual Accounts are separate filings.
• Commercial License Renewal:
  • ADGM entities must renew their commercial license.
  • Non-compliance may result in fines under ADGM commercial legislation.
• Data Protection Renewal:
  • Annually renew registration to comply with Data Protection Regulations 2015.
  • Regulations outline entity obligations and individual rights regarding personal data processing and privacy.
• FSRA Filing:
  • Firms under FSRA must regularly submit regulatory and financial reports.
  • The Electronic Prudential Reporting System facilitates filing submissions.

Let Business Setup Consultants DMCC Assist You

At Business Setup Consultants DMCC, we specialize in guiding companies through the Abu Dhabi Global Market (ADGM) setup process. Our team ensures a smooth transition into ADGM’s dynamic business environment.

Here’s what we do:

• Offer tailored consultation services to align with your business needs.
• Clarify the different legal structures within ADGM.
• Assist with compliance and regulatory requirements.
• Support every step to leverage ADGM’s benefits for your business success.

Choose us for a straightforward and effective setup in one of the world’s most prestigious financial districts.

FAQs