What you need to know: ADGM Special Purpose Vehicles (ADGM SPVs)
ADGM SPVs are a popular choice of holding company for many businesses and they are often established to ring-fence assets and liabilities. An ADGM SPV may only perform specific activities including buying, holding or selling an asset; securitising assets; and issuing investments.
1. Do I need office space?
No. ADGM SPVs only need a registered office address which Foundra can supply as part of our incorporation services.
2. Do I need to be in the UAE to incorporate my ADGM SPV?
No. The incorporation process is entirely digital. Documents can be signed digitally, and we submit your application electronically.
3. Can I get employee visas if I incorporate an ADGM SPV?
No. An ADGM SPV is not an operating entity so it cannot obtain employment visas.
4. Are there restrictions on the ownership or management structure of an ADGM SPV?
The ADGM SPV regime has a flexible ownership structure with no minimum share capital, no maximum number of shares or shareholders and no restriction on the nationality of shareholders. Multiple classes of shares are allowed so you can create different rights for different types of shareholders.
If an ADGM SPV is wholly-owned by GCC nationals, it is considered a GCC national for the purposes of onshore UAE foreign ownership restrictions (where minimum levels of UAE national ownership are set out in the law).
It is possible to incorporate an ADGM SPV with a sole director and a sole authorised signatory. The authorised signatory is subject to security clearance and must either have a UAE residence visa or a UAE entry stamp on their passport.
5. How long does it take to incorporate an ADGM SPV?
Following submission of the application, the average time is 5 days.
6. What are the legal and tax benefits of incorporating an ADGM SPV?
ADGM is generally a tax-free jurisdiction (noting that VAT came into effect in the UAE on 1 January 2018). There are no corporation, transfer, capital gains, inheritance, withholding taxes in ADGM or restrictions on the repatriation of profits from ADGM.
ADGM registered companies are eligible to apply for a Tax Residency Certificate from the UAE Ministry of Finance. If it meets the criteria, the ADGM SPV will benefit from the UAE’s Double Tax Treaty network.
ADGM is an independent, English language jurisdiction with its own civil and commercial laws and court system. It is a common law jurisdiction which is based on English law.
7. Are there any ongoing obligations for the company?
Yes. An ADGM SPV must attend to the following each year:
commercial licence renewal;
data protection declaration;
annual return (confirming the details regarding directors, shareholders etc are correct); and
annual accounts (the level of disclosure and requirement for audit depends on the company’s revenue).
Ongoing filing requirements also apply. For example, if there is a change of director, a director’s residential address changes or shares are allotted or transferred, a notification must be filed with the ADGM Registration Authority. Foundra should be notified as soon as possible as some notifications must be filed within 14 days.
8. What are the costs?
Foundra offers an incorporation package starting from USD 2,995 which includes:
the ADGM licence fee;
a registered office address for 12 months from the incorporation date; and
preparing the incorporation documents and submitting the application to ADGM.
An annual renewal fee of USD 2,995 applies (which includes the ADGM licence renewal fees).