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The Abu Dhabi Global Market, known as ADGM, has been open for barely a decade, yet it already ranks among the world’s leading common‑law financial centres. Multinationals place treasury entities there, venture capitalists register feeder funds, and families lodge holding companies that safeguard intergenerational wealth. Despite the buzz, every founder still faces the same three questions when weighing up company formation in the ADGM. Clarifying those questions at the outset will steer licence selection, staffing budgets, office space, governance, banking arrangements and, ultimately, the credibility of the structure in the eyes of investors and regulators alike.
3 questions for company formation in the ADGM, and why founders prefer it
Before diving into the questions themselves, it helps to review why the island attracts capital in the first place.
Legal certainty: ADGM directly applies English common law, rather than replicating or “adapting” it. Contracts refer to precedent that courts in London, Sydney or Hong Kong would recognise.
Independent authorities: Three bodies keep one another in check: the Registration Authority handles incorporation and commercial filings, the Financial Services Regulatory Authority (FSRA) supervises regulated activities, and lastly, the ADGM Courts settle disputes. All three play an important role in the system.
Tax neutrality: There is currently no corporate income tax on profits generated inside the free zone, although the UAE’s economic substance framework ensures genuine presence rather than brass‑plate structures.
Straightforward infrastructure: Fully serviced offices, coworking suites, company service providers (CSPs) and a digital portal mean that a straightforward holding company can be up and running in a fortnight.
Funding ecosystem: Sovereign funds such as Mubadala, along with a growing pool of regional venture managers, sit within a short walk, making it easier to raise capital or place surplus liquidity.
These strengths translate into speed and predictability, but only if the promoter answers three key questions correctly.
Question 1: Will the business be regulated or non‑regulated?
This first decision dictates which authority issues the licence, what additional capital the firm must lodge, whether resident senior officers are mandatory, and how long approval will take. Misclassify the activity and the company could find itself trading illegally or being forced to upgrade its licence later at considerable expense.
What counts as a regulated activity?
If the strategy involves taking deposits, arranging or providing credit, investing on behalf of others, offering payment services, operating an exchange, safeguarding digital assets or managing a fund, the FSRA becomes the lead authority. The list covers:
- Banking and credit institutions – conventional or Islamic.
- Wealth and asset management – discretionary mandates, collective investment schemes, venture‑capital fund management.
- Brokerage and dealing – execution, custody and margin lending.
- Payment and money services – remittance houses, e‑wallets, stable‑coin issuance under the FSRA’s crypto framework.
- Insurance mediation and captive insurance – underwriting, broking or advising.
Promoters submit a detailed regulatory business plan, risk matrix, three‑year projections, compliance policies and cyber‑security architecture. They must nominate a Senior Executive Officer, Chief Financial Officer, and a combined or separate Compliance Officer and Money‑Laundering Reporting Officer, all ordinarily resident in the UAE.
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What sits outside the FSRA?
Commercial activities that do not involve financial intermediation fall into the non‑regulated basket. These include:
- Holding vehicles and SPVs that merely own shares, intellectual property or property.
- Professional services such as consultancy, accounting, audit and legal support.
- Regional headquarters coordinating marketing and procurement for subsidiary groups.
- Family offices and proprietary investment companies that trade with their own money and do not solicit third‑party clients.
Such undertakings deal exclusively with the Registration Authority. There is no minimum paid‑up capital, no requirement for a resident chief executive, and the approval cycle typically takes five to ten working days once documents are complete.
Beware the grey area
Digital platforms often blur the boundary. A software vendor may insist it merely “provides technology”, yet if users can click a button to transfer money, convert currency or purchase securities, the FSRA is likely to view the firm as a payment or investment intermediary.
"The authority operates an innovation sandbox and encourages early dialogue; approaching it with a white‑paper and architecture diagram is more efficient than guessing and being told later to upgrade."
Question 2: What operational and licensing obligations follow?
Having established whether the undertaking is regulated, the founder can now project office space, staffing, annual filings and cost of ownership. While there is a baseline set of obligations for every ADGM entity, the depth of compliance expands for a financial licence.
Physical presence and office choices
All companies must list a registered office on Al Maryah Island, yet the scale differs:
Regulated entities need dedicated premises sufficient to house employees and store client records. A boutique asset manager might lease a small fitted office, whereas a retail broker with a call‑centre will secure several hundred square metres. Rent for a starter suite typically begins around thirty‑five thousand dollars per annum and rises with size and view.
Non‑regulated entities can share a serviced desk provided by an approved CSP. A single‑purpose holding SPV might rely on a registered‑agent address costing under ten thousand dollars annually, with no additional real‑estate outlay.
People and governance
Regulated firms must appoint and obtain FSRA approval for a Senior Executive Officer who bears primary responsibility for strategy and conduct, a Chief Financial Officer who monitors regulatory capital and signs off returns, a Compliance Officer or Money‑Laundering Reporting Officer who maintains policies, screens transactions and liaises with the FSRA, and at least two resident directors in many cases, depending on the risk profile.
Each individual supplies a detailed CV, passport, degree certificates, reference letters and a fit‑and‑proper questionnaire.
Non‑regulated companies require a minimum of one shareholder, one director and one authorised signatory who holds UAE residency (for example, the CSP’s nominee). The roles may be combined provided one person is available for bank signatory forms, lease contracts and notarised resolutions.
Routine filings and renewals
All ADGM companies lodge a confirmation statement each year on the anniversary of incorporation. This statement recites share capital, shareholder names, directors, registered address and nature of business, and carries a three‑hundred‑dollar filing fee.
Regulated firms submit additional returns: audited accounts within three months of year‑end, quarterly or half‑yearly capital adequacy reports, and any new product approvals. Both categories renew their data‑protection registration annually. Renewal fees for a holding SPV lie in the low hundreds, while a financial service provider’s combined Registration Authority and FSRA renewal can reach five figures depending on licence type.
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Economic substance and beneficial ownership
Under Cabinet Resolution No 57 of 2020, entities that earn income from relevant activities, for example, financing, leasing, intellectual‑property exploitation, headquarters services or distribution, must file an economic substance notification six months after year‑end and, when triggered, a detailed report within twelve months. Pure‑equity holding entities that satisfy minimal substance tests complete only the notification.
Every entity also maintains an internal ultimate beneficial ownership register and updates the Registration Authority within fourteen days of any change. Failure to keep this register current attracts administrative fines.
Record‑keeping and books of account
Companies must preserve accounting records for at least six years. A small non‑regulated firm may prepare unaudited financial statements signed by its director, provided turnover is under thirteen‑and‑a‑half million US dollars. Larger entities engage an ADGM‑approved audit firm. Regulated entities must always file audited financial statements regardless of income.
Secretarial support
The 2021 Company Service Provider Regulations oblige non‑exempt SPVs to appoint an ADGM‑licensed CSP. The CSP acts as registered agent, files event‑driven notices (share transfers, director changes, amendments to articles) and maintains statutory books.
"Founders focus on strategy and leave all of the paperwork to a specialist bound by professional indemnity cover."
Question 3: Which corporate bank account will fit the venture?
Securing a banking relationship is frequently the longest single step after the licence arrives. UAE banks adhere to strict anti‑money‑laundering frameworks and expect detailed narrative around source of wealth and anticipated transaction flows.
Assessment criteria
Founders should weigh:
- Service breadth – multi‑currency current accounts, fixed‑term deposits, escrow for M&A, real‑time FX.
- Tariff transparency – monthly maintenance, outward transfer fees, currency conversion mark‑ups, dormant account penalties.
- Digital functionality – secure online banking, mobile tokens, API for automated reconciliations.
- On‑the‑ground support – relationship manager and English‑language hotline.
- Card facilities – number of corporate debit or prepaid cards and ability to cap spending in foreign currency.
Onboarding documentation
Banks will ask for:
- Incorporation certificate, commercial licence and constitutional documents (certified).
- Board resolution appointing authorised signatories.
- Passport, Emirates ID (where issued) and utility bill for each signatory.
- Business plan explaining customers, countries, expected monthly credits and debits.
- Proof of initial capital or seed funds, such as bank statements or sale contracts.
- For regulated firms, the FSRA approval letter and compliance manual.
If shareholders live abroad, the bank may insist on a video interview or require apostilled identity proofs. Account opening can take from four weeks for a straightforward holding SPV up to three months for a fintech start‑up that processes cross‑border payments.
Maintaining the relationship
Once the account is live, the company must forward its annual licence renewal and, when requested, updated financial statements. Failure to do so risks account suspension and, in extreme cases, forced closure. A simple calendar reminder suffices to avoid these disruptions.
Incorporation timeline and post‑licence checklist
Although each case varies, founders can expect the following sequence:
Name reservation and KYC collation
Two to three working days.
Portal submission
One day once signatures are notarised.
Registration Authority approval
Five to ten working days for non‑regulated licences; FSRA approvals for financial service licences take three to six months and involve management interviews.
Licence issuance
Payment of registration and first‑year fees, receipt of soft copy.
Data‑protection registration
Immediate, valid for one year.
Opening bank account
Four to twelve weeks depending on complexity.
Lease signature
Serviced office or dedicated suite, mandatory before establishment card and visas.
Visa applications
Establishment card, personnel sponsorship agreement, medical and biometric stages.
Annual compliance calendar
Confirmation statement, data‑protection renewal, ESR notification, financial statements, FSRA capital returns where relevant.
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Economic Substance Regulations apply to relevant activity income, and even pure equity holding entities must file notifications and maintain adequate documentation.
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Common misconceptions include thinking only financial firms need offices or audits, or assuming all holding companies are exempt from ESR—each case depends on size, services, and activity.
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Strong corporate governance is essential, with quarterly board meetings, digital minute books, and power of attorney logs improving compliance and investor trust.
Common misconceptions dispelled
“Non‑regulated companies do not need audited accounts.”
Companies above the medium‑size threshold must file audited statements even if they are not under FSRA supervision.
“Only financial firms require an office.”
The Registration Authority can insist on tangible space if the activity involves staff in the UAE. An SPV with no employees may rely on a registered address, but a consultancy billing local clients must take a desk as evidence of substance.
“A single director cannot act as authorised signatory.”
A sole director may sign, provided he or she holds UAE residency or uses a nominee signatory furnished by a CSP.
“Economic substance rules never apply to holding companies.”
Equity‑holding entities still file a notification, and if they also provide headquarters or distribution services, they must meet the full substance test.
“The FSRA authorisation automatically covers new products.”
Introducing margin lending to a brokerage licence that previously offered only agency execution will trigger a variation of permission.
Best‑practice governance tips
Quarterly board calls
Even if the sole shareholder is also the director, formalise a recorded discussion to approve accounts, review risk and note any changes in strategy.
Digital minute book
Store signed resolutions and registers in encrypted cloud storage with offsite backup.
Power‑of‑attorney registers
Track every POA issued to staff or external lawyers, noting expiry dates.
IBC watch‑list
Monitor whether any shareholder becomes a sanctioned person or is added to adverse media databases.
Cyber‑security drills
Simulate phishing attempts and record staff training, meeting FSRA technology risk guidance where applicable.
These measures demonstrate a culture of stewardship, which lenders and potential acquirers value when they conduct due diligence.
Aston VIP’s role in your licensing journey
Choosing the ADGM is only step one. Structuring share classes, drafting bespoke articles, mapping economic substance, securing a bank account and maintaining registers all demand specialist attention. Aston VIP provides an end‑to‑end service: feasibility analysis, licence application, office search, appointment of qualified officers, CSP representation, company secretarial work, regulatory reporting and even outsourced finance and compliance teams. Whether you require a straightforward holding vehicle, a venture‑capital manager or a full‑service digital bank, our practitioners guide you through the regulatory maze, liaise with authorities and stay beside you long after incorporation.
Begin your ADGM journey today by reaching out through the Aston VIP contact page. Our dedicated Abu Dhabi desk will respond within one working day and provide a tailored roadmap that transforms your concept into a fully compliant, banked and operational entity on Al Maryah Island.
