How to set up a company in ADGM

Types of Business Licenses in ADGM

The Abu Dhabi Global Market (ADGM) does not issue a “one-size-fits-all” commercial license. Instead, the jurisdiction operates under a highly segmented licensing framework dictated by the risk profile and nature of your business activities. Licensing in ADGM is divided into three distinct regulatory pillars:

1. Financial Services Licenses (FSRA Regulated)

Any business involved in managing, advising, or transferring wealth must be licensed by the Financial Services Regulatory Authority (FSRA). Because these activities carry high risk, the FSRA categorizes them into five distinct tiers, each with escalating capital and compliance requirements:

• Category 1 (Base Capital: $10M): Full-fledged commercial and investment banks accepting deposits.
• Category 2 (Base Capital: $2M): Market makers and primary credit providers.
• Category 3A/3B/3C (Base Capital: $250k – $500k): Brokerages, asset managers, custodians, and collective investment fund managers.
• Category 4 (Base Capital: $10k): Investment advisors, insurance intermediaries, and crowdfunding platforms.
• Category 5: Islamic finance and Sharia-compliant business operations.

2. Non-Financial Licenses (RA Regulated)

For standard operational businesses, corporate structuring, and professional services, licenses are issued directly by the ADGM Registration Authority (RA) without the need for FSRA intervention.

• Professional Services: Management consultancies, law firms, accounting practices, and HR providers.
• Corporate Structuring: Holding companies, Special Purpose Vehicles (SPVs), and Family Offices.
• Tech Startup License: An incentivized, heavily discounted commercial license tailored for scalable tech innovators (often requiring a Hub71 approval letter).

3. Retail & Commercial Licenses

Designed for brick-and-mortar businesses operating within the physical boundaries of Al Maryah and Al Reem Islands. This includes food and beverage (F&B) outlets, luxury retail, clinics, and entertainment venues.

What Entities Are Available to Set Up in ADGM?

Selecting the correct legal structure determines your public disclosure requirements, shareholder liability, and operational flexibility. Governed by English Common Law, ADGM offers the following primary legal entities:

Operational & Trading Entities:

• Private Company Limited by Shares (Ltd): The standard and most common structure for SMEs, startups, and active trading companies. Shareholder liability is strictly capped at their invested capital.
• Public Company Limited by Shares (Plc): Designed for large enterprises intending to offer shares to the public or list on an exchange.
• Branch of a Foreign Company: Allows international parent companies to operate locally. The parent company retains 100% of the liability for the branch’s operations.
• Limited Liability Partnership (LLP): The preferred vehicle for professional service providers (like lawyers and auditors), combining the flexibility of a traditional partnership with corporate limited liability.

Wealth Management & Holding Entities:

• Special Purpose Vehicle (SPV): A passive corporate structure used exclusively for holding assets, shares, or intellectual property, and isolating financial risk.
• Restricted Scope Company (RSC): A highly private entity available only to professional investors, single-family offices, and government bodies. It offers minimal public disclosure on the ADGM registry.
• Foundation: An incorporated entity with its own legal personality, governed by a council rather than shareholders. It is primarily used for multi-generational wealth preservation and succession planning.

Setting Up a Special Purpose Vehicle (SPV) in ADGM

The ADGM SPV is globally recognized as one of the most efficient, tax-optimized, and robust passive holding structures available. It is widely used for securitization, joint venture ring-fencing, intellectual property holding, and streamlining cross-border investments.

Key Benefits of an ADGM SPV

• No Minimum Capital: You can incorporate an SPV with zero minimum share capital requirements.
• No Physical Office Requirement: SPVs do not need to lease expensive commercial real estate. They can utilize the registered office address of an ADGM-licensed Corporate Service Provider (CSP).
• 100% Foreign Ownership: Complete control with no requirement for a local UAE sponsor or partner.
• Fast Digital Setup: The incorporation process is entirely digital, with no need to physically attest or legalize foreign documents in most standard cases.

The 4-Step SPV Setup Process

Because SPVs are passive, they cannot conduct active commercial trade or hire operational staff. The setup process is strictly governed by the Registration Authority:

1. Engage a Corporate Service Provider (CSP)

Unless you are an established ADGM entity (like a holding company already operating on the island), you are mandatory required to appoint an ADGM-licensed CSP. The CSP will act as your registered agent and provide your official SPV address.

2. Profile Creation & Document Submission

Your CSP will submit your business plan and incorporation documents via the ADGM portal. Required documents include:

• A clear statement of purpose (e.g., holding real estate, holding shares in a mainland LLC).
• Passport copies, proof of address, and Emirates IDs (if applicable) for all shareholders and directors.
• Completed Ultimate Beneficial Owner (UBO) declarations.

3. Compliance Review

The RA conducts a strict Anti-Money Laundering (AML) and Know Your Customer (KYC) review. They will verify the source of wealth and assess whether the SPV meets the “Nexus Requirement” (demonstrating a legitimate connection to the UAE or ADGM ecosystem).

4. Licence Issuance & Banking

Once approved, the Certificate of Incorporation is issued. Due to the high regulatory standards of ADGM, SPVs enjoy streamlined access to corporate banking facilities across major UAE institutions (such as FAB, Emirates NBD, and ADCB).