Corporate services / business setup
Setting up a company in ADGM, Abu Dhabi
01_introduction
ADGM is Abu Dhabi’s financial free zone and the only jurisdiction in the region where the common law of England applies directly as local law. It suits holding structures, foundations and professional firms, and is a poor fit for a business selling to UAE mainland customers. One fact decides most business setup cases here before the fee schedule does: every ADGM entity except a Special Purpose Vehicle must hold a physical office inside the jurisdiction.
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01
What makes ADGM different from DIFC.
What makes ADGM different from DIFC.
Both are common law centres. The difference is how English law reaches them. Under Article 1(1) of ADGM’s Application of English Law Regulations 2015, English common law and the rules of equity form part of the law of ADGM directly.
DIFC company formation works the other way: DIFC enacts its own codified statutes and English common law only supplements them. Where an ADGM enactment conflicts with the common law, the enactment prevails.
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ADGM for holding companies and foundations.
ADGM for holding companies and foundations.
The ADGM Special Purpose Vehicle is a passive holding company. It cannot trade or hire staff, it must show a connection, or nexus, to ADGM, the UAE or the GCC, and it is the only ADGM structure exempt from the office requirement, provided a registered company service provider is appointed.
Government registration is USD 1,900, with the provider’s fee on top. An ADGM foundation is USD 1,000 to register and USD 500 a year, which makes it the cheaper long-term wealth structuring vehicle. Family offices are compared under DIFC family office.
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The licensing process for an ADGM operating company
The licensing process for an ADGM operating company
An operating entity needs a lease on Al Maryah Island or Al Reem Island, registered with the incorporation application. A single non-financial licence can cover several activities only where they are complementary.
Category C is USD 2,800 in year one and USD 2,300 to renew, Category B is USD 5,800 and USD 5,300. Financial services are separate: FSRA In Principle Approval must be issued before incorporation is filed, and Category A1 is USD 17,000 then USD 16,500.
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How we approach this
Two questions decide ADGM, and both come before the fee is committed.
First, whether the entity is operational or passive: an ADGM lease is mandatory for everything except an SPV, so an entity that will never hold staff or premises belongs in the SPV or foundation regime, and one that will needs its office budgeted from the outset. Second, whether the activity touches financial services: FSRA authorisation must complete before incorporation can be filed at all, and treating it as a later step is what stalls these applications. GCG settles the structure, the licence category and the banking before anything is paid for.
Confirm ADGM is the right fit
Confirm whether your entity needs an ADGM office before committing to the jurisdiction.
04_faq
Does ADGM require a resident director?
No. Under the ADGM Companies Regulations 2020 a private company needs at least one director, and at least one must be a natural person aged 18 or over, with no UAE residency requirement. Regulated firms are separate: the FSRA requires a Senior Executive Officer, and that role carries its own residency and competence expectations.
How does ADGM's common law framework affect shareholder agreements?
An English-law shareholders' agreement can be drafted and enforced without importing a foreign governing law, because English common law and equity form part of ADGM law and carry precedential force in the ADGM courts. Where an ADGM enactment says otherwise it prevails, so the Companies Regulations still set the floor on directors' duties and share transfers.
What is the annual cost of maintaining an ADGM company?
Government renewals are USD 2,300 for a Category C licence, USD 5,300 for Category B, USD 500 for a foundation and USD 16,500 for Category A1, plus a USD 100 confirmation statement. The variable costs decide the real number: the lease for an operating entity, the company service provider fee for an SPV, and audit where it applies.
Can an ADGM company be owned entirely by non-residents?
Yes, with no local shareholder or sponsor requirement. ADGM entities may also apply to the Federal Tax Authority for a Tax Residency Certificate, subject to its criteria, though tax outcomes depend on the activity and the place of effective management.
Does ADGM allow a company to redomicile in from another jurisdiction?
Yes, by continuance, so the company keeps its legal identity and history rather than incorporating fresh and transferring assets. The government fee is USD 7,500. Whether that beats a new incorporation depends on what is actually in the existing company: contracts, licences and banking history are worth carrying, a shell rarely is.