Company Set Up in ADGM in the UAE: Guidelines, Benefits, and Cost
Sep 27, 2024
Any business owner starting a venture in the UAE should, at the very least, consider operating in one of the country’s free zones.
There are many reasons why start-ups should give it some thought, including the 0% corporate and personal tax rate, 100% ownership of the business, 100% repatriation of capital and profits, lack of currency restrictions, and 100% exemption from import and export taxes.
In addition to these primary benefits, each free zone also provides a unique business ecosystem.
The Abu Dhabi Global Market (ADGM) is one such free zone in the UAE, popular for its robust regulatory framework, business-friendly environment, and strategic location.
ADGM is particularly known for attracting financial institutions, fintech startups, professional services, and especially those involved in private banking and asset management to set up a company due to its internationally recognised legal system based on English Common Law, which offers Abu Dhabi Global Market companies transparency and security.
On a 114-hectare site that includes first-rate office space and cutting-edge leisure, entertainment, and hospitality facilities, ADGM is home to numerous local and international companies of all sizes.
This article will provide a comprehensive guide to the ADGM company set up in 2024, covering the process, required documentation, authorities involved, benefits, and cost structure.
Starting a Business in Abu Dhabi Global Market: The Steps
Here are the standards process of establishing a company set up in ADGM:
1. Choose Your Company Type
Before starting with the registration process, it is important to clearly choose and define the legal type of your business.
ADGM offers many business structures, including Limited Liability Partnerships (LLP), Private Limited Companies (LLP), Public Limited Companies (PLC), Branches of Foreign Companies, and Special Purpose Vehicles (SPV).
2. Reserve The Company Name
This step involves reserving a company name that complies with established regulations. ADGM has specific rules regarding the words that can be used for proposed company names, which are as follows:
The name cannot be similar to another existing company name in the ADGM. If not, the business will be required to provide evidence that it has the right to use this name.
The proposed company name cannot include any sensitive, offensive, or prohibited terms by the ADGM regulations.
Businesses will also have to provide evidence that the relevant authorities have approved the use of these terms in the proposed company name.
Once the name is reserved, business owners can proceed with the company interaction process.
3. Prepare Your Business Plan
When establishing Abu Dhabi Global Market companies, businesses will need to provide a detailed plan.
The business plan should include comprehensive information about the proposed activities, market analysis, financial projections, target market, and overall business strategy.
It serves as a road map for the company’s growth and demonstrates to ADGM its viability and sustainability.
4. Check Requirements
There are certain requirements that businesses looking to set up a company in ADGM should meet.
These include having a physical office space within ADGM (The only exception to this rule is for Special Purpose Vehicles (SPVs), appointing a resident secretary, and meeting the minimum share capital requirements (vary depending on the type of company and license chosen).
5. Submit the Required Documents
Once the company name is reserved, businesses looking to register as Abu Dhabi Global Market companies must submit a list of necessary documents, depending on the type of license or entity chosen.
The list of general documentation required for a successful ADGM company setup is discussed below.
Business owners also need to undergo a thorough background check to ensure they meet the eligibility criteria set by ADGM.
6. Pay the Required Fees
Once you've submitted the necessary documents, you must pay the formation and licensing fees. ADGM company setup fee has a breakdown of different inclusive costs..
7. Obtain the License
After your application and documents have been reviewed and approved by the ADGM Registration Authority, you will receive your business license. Then, your company will be legally recognised and can commence operations within ADGM.
8. Open a Corporate Bank Account
Finally, after the business license has been issued, the company must open a corporate bank account in its name. This is where all company financial transactions will be made.
Time Taken for ADGM Company Set Up
The accuracy and completeness of your application will determine the length of time it takes for approval and for the commercial license to be issued.
There are a few supplementary documents that you will need to complete as part of your application.
The main sections you will need to complete in your form include:
General Details
Addresses
Authorised Signatories
Director
Secretary
Shares Capital
Data Protection
Beneficial Owners
Review
ADGM Authorities and Legal Entities
Abu Dhabi Global Market is governed by three independent authorities: the Registration Authority, the Financial Services Regulatory Authority (FSRA), and ADGM Courts. This is because the majority of businesses operating within the free zone are in financial-related industries. Each of these organisations works to ensure that businesses operating within the free zone follow standards accepted by the world’s major financial centres.
The Registration Authority
This authority is responsible for handling the incorporation and licensing procedures in the ADGM company setup. The registrar oversees all the steps involved in the setup process, from applying to register the trade names, issuing the commercial license, and incorporating the businesses.
FSRA - Financial Service Regulatory Authority
The FSRA acts as an international finance hub for companies in the Middle East, Asia, and Africa. Their goal is to ensure a transparent, progressive environment in the ADGM Freezone.
They have an efficient and strategic regulatory framework that aligns with that of other financial hubs, such as Singapore, Hong Kong, London, etc.
The primary goal of FSRA is to maintain the integrity of Abu Dhabi Global Market companies. Its initiatives cover a range of financial services, including asset and fund management, banking, insurance, and other capital market activities.
They also constantly propose innovative policies and regulations to draw more investments to the region.
ADGM Courts
This authority defines a set of legal ecosystems with their own rules and regulations applicable to business operations in the Abu Dhabi Global Market free zone.
ADGM courts are the first digital court in the world and also the first in the Middle East to adopt a totally independent English Common law framework.
Compliance with English Common law also improves risk efficiency and reduces compliance costs for corporations and financial service providers in the region.
Benefits of Setting Up a Company in ADGM
Abu Dhabi global market companies have many benefits from establishing themself within the financial free zone. Some of them include but are not limited to the following.
100 % foreign ownership.
Zero (0) personal income tax and 9% corporate income tax (where applicable)?
100 % repatriation of profits.
Ease of doing business.
A complete ecosystem comprising legal, accounting, and servicing.
No limit on the number of activities per license (if the activities fall within the same scope).
ADGM initiatives align with the best international practices recognised by major financial centres worldwide.
Multiple and flexible office setup options.
Flexible options for investor and employee visas.
Get one visa for every eight (8) square meters of office space.
Streamlined and efficient application process.
Simple and convenient business procedures.
Zero restrictions on foreign employees and currency.
English-speaking and common law judicial system.
Presence in the heart of the UAE facilitating networking and ease of doing business with various multinational companies.
Strategic location that allows easy access to the rest of the UAE and global markets, including major financial hubs of the world.
Proximity to airports such as the Dubai International Airport.
Home to over 100 startups and accelerators, including Hub71, and startAD.
Dynamic workforce.
World-class facilities and infrastructures.
ADGM Company Set-Up Cost
Here is a clear breakdown of all the costs of setting up a company in Abu Dhabi Global Market.
1. ADGM Business Registration Cost
This is the initial cost involved with ADGM company setup for registration. It is divided into three categories, each of which indicates the business activities of the applicant.
Category A: Financial Services - $15,000
Category B: Non-Financial Services - $10,300
Category C: Retail - $6,000
2. Annual Abu Dhabi Global Market License Cost
ADGM companies should also pay a yearly fee to maintain their business license. The cost for this depends on the type and nature of the business.
Standard Cost ADGM Business License Renewals
Category A: Financial - $13,000
Category B: Non-Financial - $8,000
Category C: Retail - $4,000
3. Additional Activity Cost for ADGM Company
If the registered company is engaged in any specialised activities in the free zone, businesses will have to pay additional licensing fees.
For example, financial service providers or other similar regulated ADGM companies will have to pay additional fees that are directly associated with their specific licensing requirements.
4. Space Rental at Abu Dhabi Global Market
As per ADGM regulations, businesses should have a physical presence or office space to validate their license and registration. This adds to the cost of leasing an office space in the ADGM area.
5. ADGM Service Charges
Depending on the services offered by the ADGM, additional service charges could be involved. Some of these services and their cost are as follows:
ADGM Cost Change of Company Name - $100
Maintain alternative location of company’s records- $100
Appointment/cessation of authorised signatories- $100
Maintain details of authorised signatories- $100
Appointment/cessation of directors- $100
Maintain details of directors- $100
Appointment/cessation of secretary- $100
Maintain details of the secretary- $100
Increase of amount of authorised share capital- $100
Reduction of amount of authorised share capital- $100
Allotment of shares- $100
Transfer of shares - $100
Consolidation/subdivision of shares - $100
Change of name of share class- $100
Maintain variation of rights attached to shares- $100
Purchase/cancellation of own shares/reduction of shares -$100
Certified true copy of document- $100
Certificate of good standing- $100
Certificate of incumbency- $100
Zero tax certificate- $100
Under formation certificate- $100
Adhoc certificates (e.g., no objection certificates)- $100
Add a new class of shares- $100
6. Visa Costs
If the business decides to hire foreign staff or a non-UAE citizen, companies would have to incur visa-related costs, such as:
ADGM Visa Cost New Employment Visa (Inside UAE), 2 Years- $1,021
New Employment Visa (Outside UAE), 2 Years- $800
New Employment Visa (Inside UAE), 1 Year- $750
New Employment Visa (Outside UAE), 1 Year- $530
Employment Visa Transfer- $800
7. Additional Approvals
ADGM companies operating in regulated industries or areas of activities like finance, healthcare, or law will require approvals from relevant authorities. This approval process can come with some additional costs.
8. Data Protection Fees
The Office of Data Protection (ODP) is the independent data protection body responsible for promoting data protection within ADGM. All companies operating in the Abu Dhabi Global Market will have to incur an annual cost for this service.
Standard Cost for Data Protection :
Data Protection Initial Registration- $300
Data Protection Annual Renewal- $300
Written By
Ketan Trehan
Associate Director UAE & KSA