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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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.
Process 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 in 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.
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 Reqired 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 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
ADGM Tech Startup
ADGM has launched its new Tech up License giving entrepreneurs cost-effective access to the ADGM Platforms. ADGM’s calibrated and tailored regulatory regime for investments and capital raising can help enterprises seek capital at various stages of their life cycle to launch grow or divest their business. However, it is limited in time to the first 2 years after which it must be converted to a full-fledged license.
Legal Structures
ADGM offers a wide range of business structures to use such as
01
Private Company Limited by Shares
A company that has share capital and the liability of members is limited to the amount, if any, unpaid on their shares. It cannot offer its shares to the public.
02
Private Company Limited by Guarantee
A company that does not have share capital, and all members act as guarantors whose liability is limited to the amount they agree to contribute to the company's assets if it is wound up.
03
Private Company Unlimited with shares
A company that has share capital but has no limit to the members' liability.
04
Private Company Unlimited without shares
A company that does not have share capital and there is no limit to the member’s liability
05
Restricted Scope Company
A private company that can only be incorporated as a subsidiary of a group which publicly files consolidated accounts, or as a subsidiary of a company formed by Emiri decree or by an individual/members of the same family.
06
Public Company Limited by shares
A company that has offered shares to the public and has limited liability. Only Public Companies Limited by Shares (PLCs)may be listed on stock exchanges.
07
Branch of a Foreign Company
A company incorporated or formed outside of ADGM that wants to establish a presence in ADGM. This is a common and popular entity type, suitable for establishing a small presence or setting up a representative office to refer business transactions to the head office or parent company.
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].
Know More About ADGM
Mohammed Shafeek
Founder & CEO, MS
"We build a bespoke service for our clients. Whether they want to advance an idea, a capability, or the world at large, MS is with you every step of the way."
Mohammed Shafeek
Founder & CEO, MS
"We build a bespoke service for our clients. Whether they want to advance an idea, a capability, or the world at large, MS is with you every step of the way."
