Overview - ADGM
In October 2015, Abu Dhabi Global Market (ADGM) became fully operational, opening its doors to welcome local and international enterprises and institutions. Located in the heart of Abu Dhabi, ADGM serves as a bridge between the east-west corridor.
ADGM offers a secure and efficient platform for companies and financial institutions to establish operations and fulfill their expansion ambitions. It harnesses the inherent strength of the Abu Dhabi economy and advances the spirit of long-term partnership and collaboration.
ADGM operates under the control of three independent authorities - the Registration Authority, the Financial Services Regulatory Authority (FSRA), and the ADGM Courts.
While ADGM offers a wide range of financial activities, what attracts investors is its openness to a broad spectrum of non-financial business activities, including professional, commercial, family businesses, corporate headquarters, and various other activities. ADGM caters to the establishment of holding companies, special purpose vehicles, restricted scope vehicles, and other legal structures for holding and protecting assets.
The business activities offered by ADGM are categorized into financial, non-financial, and retail activities. All financial activities are regulated by the FSRA.
Benefits of incorporation in ADGM
- Independent judicial system based on British Common Law.
- Seamless digital experience for the delivery of judicial services in ADGM E-Courts.
- 100% foreign ownership, eliminating the requirement to have 51% of the shares held in the name of a UAE national or a company wholly owned by UAE nationals.
- Broad range of commercial activities.
- Zero tax rates, providing the opportunity to repatriate profits and capital.
- Attractive tax regime and access to UAE’s excellent network of double tax treaties.
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ADGM License categories are
01
Financial
It covers various sectors such as:
Banking
Capital Markets
Wealth and Asset Management
Others
02
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
03
Retail
It covers manufacturing textiles, jewelry, and food products, as well as the trade of motor vehicles, food and beverage, and other goods. ADGM's retail activities also include photography, rental and leasing of vehicles and machinery, arts galleries, restaurants, and other related activities.
Legal Structures
ADGM offers a wide range of business structures to use such as
01
Private Company Limited by Shares
Read more02
Private Company Limited by Guarantee
Read more03
Private Company Unlimited with shares
Read more04
Private Company Unlimited without shares
Read more05
Restricted Scope Company
Read more06
Public Company Limited by shares
Read more07
Branch of a Foreign Company
Read moreProcess of Company Formation
01
Reserve a company name in compliance with the ADGM Business and Company Names Rules 2016 and choose a registered office which must be located on Al Maryah Island, Abu Dhabi.
02
Create a brief business plan and review the documentation requirements for the application & submit an application and required documentation to the Registrar via the online system.
03
Provided all information is accurately submitted and the Registrar is satisfied with the documents and information provided, a certificate of incorporation and commercial license will be issued.
Key requirements for setting up in ADGM
01
Name
02
Director
03
Resolution
04
Articles of Association
05
Authorized signatory
06
MLRO
(in case of DNFBPs)
(in case of DNFBPs)
07
Shareholders & shareholding details
08
Ultimate Beneficial owner details
09
Company secretary (mandatory for public companies)
Acquiring the license is not the only requirement for being registered under the ADGM Registration Authority. Office space is mandatory to get your entity functioning.
Documents Required for the Incorporation
- Copy of passport, visa page or immigration entry stamp and Emirates ID of the director(s), secretary, and shareholder(s)
- Application form for reservation of the proposed name of the company
- Copy of the business plan
- Statement of capital and initial shareholding, for companies limited by shares
- Statement of guarantee, for companies limited by guarantee
- Statement of proposed officers of the entity
- Trade name reservation document
- A statement with the intended address of the proposed company
- Copy of Articles of Association (AOA) and resolution of the board of directors
- A copy of the lease agreement for the office space
- Confirmation of restricted scope of the company
- Duly filled and signed data protection form
- Duly filled and signed beneficiary or ultimate owner form
- Any other documents that may be required by the authorities, based on the scope of activities that the company would be undertaking
For more details-
Annual Requirements
| Annual Requirements | Details |
|---|---|
| Annual Account Filing | Every ADGM entity must keep adequate accounting records, prepared in accordance with International Accounting Standards (IAS). The first Accounting Reference Period is a period of more than six months but not over 18 months from date of incorporation. Requirements : Public companies are required to lay accounts before a general meeting. Private companies are obliged to circulate a copy of accounts and reports to members when filing to the Registrar. A company’s director must prepare the director’s report and deliver the accounts and reports required for each financial year to the Registrar (except RSCs and Foundations). |
| Annual Returns | Every ADGM entity has a duty to deliver annual returns within one month of the anniversary of incorporation and then on an annual basis. Annual Return and Annual Accounts are completely separate filing and not to be confused as both will not usually be filed at the same time. The annual return confirms basic information such as details of registered office, directors, secretary, Type & the business activities, statement of capital and shareholder information about the entity. |
| Comercial License Renewal | All entities registered in ADGM are required to hold a valid commercial licence issued by the ADGM Registration Authority. Entities that fail to comply with these requirements are liable to fines under ADGM’s commercial legislation. |
| Data protection Renewal | Entities are obliged to annually renew their registration of adherence to Data Protection Regulations 2015 which set out the obligations of ADGM entities and the rights of individuals, in relation to the processing and privacy of personal data. |
| FSRA Filing | ADGM requires all the firms registered under FSRA to submit information on a regular basis, including regulatory and financial reports, so they can better understand their activities and financial position on a periodic basis. ADGM’s Electronic Prudential Reporting System is a portal dedicated to simplifying the submission of regulatory filings. |
Annual Account Filing
Every ADGM entity must keep adequate accounting records, prepared in accordance with International Accounting Standards (IAS). The first Accounting Reference Period is a period of more than six months but not over 18 months from date of incorporation.
Requirements :
Public companies are required to lay accounts before a general meeting. Private companies are obliged to circulate a copy of accounts and reports to members when filing to the Registrar. A company’s director must prepare the director’s report and deliver the accounts and reports required for each financial year to the Registrar (except RSCs and Foundations).
Annual Returns
Every ADGM entity has a duty to deliver annual returns within one month of the anniversary of incorporation and then on an annual basis. Annual Return and Annual Accounts are completely separate filing and not to be confused as both will not usually be filed at the same time. The annual return confirms basic information such as details of registered office, directors, secretary, Type & the business activities, statement of capital and shareholder information about the entity.
Comercial License Renewal
All entities registered in ADGM are required to hold a valid commercial licence issued by the ADGM Registration Authority. Entities that fail to comply with these requirements are liable to fines under ADGM’s commercial legislation.
Data protection Renewal
Entities are obliged to annually renew their registration of adherence to Data Protection Regulations 2015 which set out the obligations of ADGM entities and the rights of individuals, in relation to the processing and privacy of personal data.
FSRA Filing
ADGM requires all the firms registered under FSRA to submit information on a regular basis, including regulatory and financial reports, so they can better understand their activities and financial position on a periodic basis. ADGM’s Electronic Prudential Reporting System is a portal dedicated to simplifying the submission of regulatory filings.
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Frequently Asked Questions (FAQ)
Can I choose any company name for the ADGM proposed company?
The company name must be compliant with the ADGM Business and Company Name Rules. Name must not be identical or almost identical to any entity currently registered in the ADGM or any other relevant jurisdiction.
Who is UBO?
Any ultimate person who holds more than 25% of ownership or control in ADGM legal entity is considered as Ultimate Beneficial Owner.
What is the timeframe for setting up ADGM?
The entire process typically takes 2-3 weeks, provided that all documents are submitted to ADGM. The timeline may vary subject to the provisions of any additional information /documentation requested by ADGM during the process.
Are AML rules applicable to all entities in ADGM?
All ADGM entities are subject to AML supervision. DNFBPs (Designated Non-Financial Professions and FSRA regulated firms are obliged to comply with the provisions under the AML Rulebook.
How to hand over annual accounts to the Registration Authority?
The easiest way to hand over the filing to the Registration Authority is through uploading the file in their online portal, available at www.registration.adgm.com
Can a filing time extension be requested?
Companies should take appropriate measures to ensure that the filing date is identified, and the filing is prepared and submitted within the prescribed period.
However, if due to unforeseen circumstances or an exceptional reason the filing is delayed, a company may request the Registration Authority for the extension period.
The extension request should include all relevant information including an explanation of why the company cannot comply with the prescribed period for filing and the length of the extension being requested. Depending on the reasons and circumstances, the Registration Authority may require documentary evidence supporting the claims to be provided.
Requests for extensions should be made in writing as a letter, stamped and signed by an authorised signatory or a director of the company, and emailed to the Monitoring & Enforcement Department at [email protected]
If the Registration Authority is satisfied with the information given is sufficient for extension of time, a confirmation will be provided with the new deadline for filing.
If the request for an extension is not granted and a company fails to submit the filing on time, the company will be liable to the relevant late filing penalty. Time taken by the Registration Authority to consider an extension request that is not granted shall not be a valid reason for failing to meet the original deadline for filing.
What ensues when a fine is levied?
When a company fails to deliver the accounts to the Registration Authority on time, a late filing penalty is imposed automatically.
The penalty imposed will generally be determined as per the Guide.
In case of online submission of filing via Registration Authority’s online portal, the penalty notice will be issued electronically by the portal.
In case of hard copy submission, the Registration Authority will issue a penalty notice to the company’s registered office address.
Can the fine levied be appealed?
An appeal can be made against a late filing penalty only if the company demonstrates that the circumstances are exceptional or that the fine imposed was incorrect.
The Registration Authority has very limited discretion not to collect a fine. Exceptional circumstances include unforeseen and catastrophic events that render a company unable to submit a filing.
A company should take appropriate measures to ensure that its accounts are ordinarily prepared (and audited, if required) and submitted to the Registration Authority within the prescribed period.
Is the appointment of a Director mandatory in ADGM? What are the requirements for a Director in an ADGM company?
A private company must have at least one director who is a natural person. A minimum of 2 directors are required in the case of a public company. Directors must be 18 years of age, must not be disqualified from acting as a director and must not be an undischarged bankrupt.
Is the appointment of an authorized signatory mandatory?
Yes, this is mandatory. At least one of the authorized signatories must be a UAE resident /GCC national. Emirates ID, Passport and Visa copy must be provided to ADGM during Incorporation Application. The appointment must be passed by a resolution of the incorporating shareholder/s
Is the appointment of a Data Protection Officer applicable to all entities in ADGM?
Regardless of the company's size, a Data Protection Officer (DPO) must be appointed if: The company is a public authority processing personal data The company processes personal data on a large scale The company regularly and systematically monitors individuals The company processes special category data (e.g., medical data, biometrics, data revealing racial or ethnic origin, political beliefs/opinions, religious or philosophical beliefs) or criminal conviction data.
How to prevent paying a fine?
Penalties for delayed filing can be avoided by ensuring that when a filing obligation is due, all the process must be in place and filing is prepared and submitted to the relevant Registrar within the specified filing period.
What if a filing is returned?
The filings which do not meet the requirements of the Companies Regulations of the Registration Authority will be returned back for correction. For example, if the accounts are not signed by a director, or accompanied by a director’s report (if applicable).
A late filing penalty will be imposed if the filing is resubmitted after the impending date of the original filing.
What if the fine goes unsettled?
The Registration Authority treats the fine as a debt due to it, if all or any of the amount of a fine is outstanding at the end of the deadline for payment as specified in the notice.
The Registration Authority may apply to the ADGM Courts for recovery of the debt.
How to make an appeal?
An appeal must be made in writing and the letter should be addressed to the Monitoring & Enforcement Department.
The letter should include all the details of the exceptional circumstances and reasons as to why the Registration Authority should consider the appeal. The letter must be duly stamped and signed by a director or authorized signatory of the company and should be submitted by email to [email protected].
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