ADGM - Abu Dhabi's International Financial Centre

Established in 2013, ADGM has become a global business hub, promoting growth and innovation with its business-friendly environment, robust regulations, and English common law-based legal system, attracting international investors and businesses.

Key Features and Benefits of ADGM

ADGM offers 100% foreign ownership, tax exemptions for 50 years, unrestricted profit repatriation, and a legal system based on English common law with independent courts. Regulated by the FSRA, it adheres to international financial standards and supports sectors like banking, fintech, and professional services, positioning it as a hub for businesses targeting MEASA.

Licensing in ADGM:

ADGM provides licenses tailored to business activities, with requirements differing for FSRA-regulated financial activities and general business activities overseen by the ADGM Registration Authority.

1. General Business Licensing

To conduct non-financial activities in ADGM, companies must obtain a license from the Registration Authority by submitting documents like business plans, shareholder and director IDs, and company structure details. The authority ensures compliance before issuing the license.

2. Financial Services Licensing

Financial activities in ADGM are categorized into several types, each with specific licensing requirements. These categories are determined by the type of financial service offered and the associated risk level. Key financial services categories include:

a.      Category 1: Banking Business
b.      Category 2: Dealing in Investments as Principal
c.      Category 3: Dealing in Investments as Agent, Managing Assets, Providing Custody
d.      Category 4: Advising on Investments or Credit, Arranging Deals, Insurance Intermediation
e.      Category 5: Operating a Multilateral Trading Facility (MTF)

Each category has distinct capital requirements, documentation needs, and regulatory compliance standards, which must be met before a license is issued.

Virtual Asset License

Any activity that falls under Virtual Asset License must only be done with Accepted Virtual Assets. The FSRA has specific criteria for determining which virtual assets are considered “accepted.”

• Buying, selling, or exercising any right in accepted virtual assets (whether as principal or agent)
• Managing accepted virtual assets belonging to another person
• Making arrangements with a view to another person (whether as principal or agent) buying, Selling, or providing custody of accepted virtual assets
• Marketing of accepted virtual assets
• Advising on the merits of buying or selling of accepted virtual assets or any rights conferred by such buying or selling
• Operating a Multilateral Trading Facility in relation to virtual assets
• Operating as a Virtual Asset custodian

Capital Requirements:

The Virtual Asset License holder is required to have an amount equal to 6 months’ operational expenses; and unless the Regulator directs otherwise, an additional buffer amount of up to a further 6 months’ operational expenses.