Abu Dhabi Global Market: An Attractive Business Choice
The United Arab Emirates (UAE) is well-known for the attraction of entrepreneurs with its many free zones. Abu Dhabi Global Market (ADGM) is one of the most thriving international financial centres in the country that operates under the English Common Law. Established under Abu Dhabi Law No (4) of 2013, ADGM provides a contemporary business infrastructure and a holistic ecosystem that empowers companies, startups, financial institutions, and SMEs to function, innovate and flourish impeccably in the UAE and across the MENA region. ADGM began its functions in October 2015 and strengthens Abu Dhabi’s status as a global hub for corporate and finance activities and aids as a strategic link between the budding economies of the Middle East, Africa and South Asia, and the rest of the world. Abu Dhabi’s vital industries such as private banking, wealth management, asset management, and financial innovation have played a key role in shaping the success of ADGM.
Structure of the ADGM
The ADGM is governed by three authorities independent of the state’s jurisdiction: the Registration Authority (the Registrar), the Financial Services Regulatory Authority (FSRA), and ADGM Courts.
As one of the core pillars of ADGM, the Registrar’s key functions under companies and commercial licensing regulations includes (a) registration of ADGM establishments; (b) Registration of business names and maintenance of register; (c) Registration of post-incorporation documentation; (c) Registration of changes in business name particulars; (d) Registration of changes in directors, officers, shareholders and share capital; (e) Enforcement of ADGM companies regulations, cancellation of commercial licenses, prosecution and strike off; (f) Restoration or dissolution of ADGM establishments. Moreover, the Registrar is also accountable for monitoring compliance with and, where necessary, enforcing the requirements under ADGM’s commercial legislation, including issuing financial penalties, directions, suspension, or withdrawal of a license, depending on the severity of the breach.
Upholding the ADGM’s belief of a fair, transparent, and efficient marketplace necessary to meet the dynamic and rising needs of the economy of Abu Dhabi and the global markets, the FSRA was founded to promote a progressive environment of financial services and uphold the integrity of the financial centre. In consistence with international standards, the policies of FSRA and its adherence to rules and regulations guarantee that all the financial units work with assurance, market participants prosper in an equal level-playing environment, and the best interests of investors are protected. Showcasing the highest level of regulatory transparency and engagement, the FSRA applies an open and liberal approach in its regulatory acts, through public consultations, engagements on introduction and amendments of rules and policies and administers any possible risks exposure and undesirable effect.
The ADGM Courts, broadly modelled on the English judicial system comprise a Court of First Instance and a Court of Appeal. The ADGM Court of First Instance also regulates all arbitration activities that take place in the Arbitration Center of the ADGM.
Features of ADGM
The biggest advantage of establishing businesses in the ADGM (Abu Dhabi Global Market) is the 0% personal and corporate income tax and the 100% exemption from customs tax. Moreover, the ADGM allows 100% foreign ownership with no currency restrictions, along with 100% repatriation of all invested capital and profits which is uncommon in other countries. The financial environment is also US dollar-dominated making it more convenient for foreign investments.
Another key attraction of ADGM is the Special Purpose Vehicle (SPV). SPVs are corporate vehicles, typically private companies, launched for the function of detaching financial and legal risk by ring-fencing assets and liabilities. SPVs can be formed as subsidiaries, projects, or joint venture vehicles to warrant that only those assets associated with a business transaction are subjected to the liabilities related to that transaction. As SPVs are characterized by having a separate legal personality, claims by the SPV’s creditors cannot be linked to the assets of the SPV’s shareholders or any of its sister companies.
Other features that attract foreign investment at the ADGM are its risk-based regulatory approach, an independent judicial system that is English speaking, its modern infrastructure, and the ability to support global connections. Furthermore, the process of registration and incorporation is entirely digitized making it accessible, simple, and quick.
Incorporation Process at ADGM
Though the process of establishing an enterprise at the ADGM is straightforward and precise, it is necessary to liaise with the applicable authority depending on the nature of the business. If the business operations are financial in nature, the FSRA needs to be approached. Non-fiscally operating businesses are required to coordinate with the Registrar. The common steps followed by all entrepreneurs to incorporate their business are:
- Identify the legal form of company to be registered in ADGM
- Select activity from ADGM activity list
- Apply for name and initial approval
- Choose a registered office located in Al Maryah Island, Abu Dhabi
- Payment of fees related to ADGM business set up
- Prepare and apply for registration of a company
- Sign ADGM company registration and incorporation documents
- Apply for an ADGM residence visa
The basic documents required to set up business in the ADGM are as follows:
- Colour passport copy
- Colour UAE residence visa & emirates id copy
- Utility bill copy
- Business Plan
- CV/Resume
- NOC from existing sponsor
ADGM Arbitration Centre
The latest addition to the ADGM is the Arbitration Centre (ADGMAC), which is a hearing facility equipped with state-of-the-art technology. The Arbitration Centre’s hearing rooms and other facilities that can be utilized for arbitration cases or mediations are available to everyone for booking. The amenities can be used by persons irrespective of which institute they opt to administer their arbitration. Additionally, the parties can, and are encouraged to, employ the Arbitration Centre facilities and services despite the legal place of the arbitration being outside of the ADGM.
With its state-of-the-art facilities and global influence, the ADGM has grown in gaining business investors. Today, ADGM is home to global powerhouses including Citibank, HSBC, State Street, BNP Paribas, UniCredit, Standard Chartered, Bank Lombard Odier, the Mirabaud Group, Siemens, Plug and Play, and more. With more than 2,800 registered entities, ADGM’s network is also comprised of treasury centres, professional services firms, and global investors, among many others.