Legal Structure
Operates in a Common Law Jurisdiction
ADGM Special Purpose Vehicles
(SPV)
What is a Special Purpose Vehicle (SPV)?
The Abu Dhabi Global Market's Special Purpose Vehicles (SPVs) protect parent company assets and liabilities through their distinct legal status from financial and legal risks. SPVs have a separate legal status. The creditors of the SPV cannot claim or attach the assets of the parent company or the shareholders of SPVs. This robust framework allows flexibility preventing creditors' access to parent company assets or SPV shareholder holdings.
SPV Regulations and Requirements in ADGM
- SPVs have the capacity to hold assets worldwide, contingent upon demonstrating a connection to ADGM, the UAE, or the GCC region.
- The Registration Authority reserves the right to grant licenses on a case-by-case basis. A mandatory requirement includes at least one authorized signatory from a UAE resident with a valid UAE Visa (director or shareholder).
- SPVs are restricted from engaging in business activities or hiring staff, making them ineligible for UAE Residence Visas.
Why set up a Special Purpose Vehicle (SPV) in ADGM?
Financial Reporting
No Requirement to File Audited Financial Accounts
Cost Efficiency
Low Registration and Operating Costs
Ongoing Compliance
Simple Ongoing Reporting Requirements
Flexibility and Adaptability
Migration and Continuance Permitted, No Attestation Required for Corporate Documents
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Registration and Administration
No Physical Registered Address Requirement, Minimum One Shareholder/Director, Corporate Shareholder/Director Permitted, Company Secretary Not Required, Restricted Scope Company Available
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Capital Structure
No Minimum or Maximum Share Capital,No Restriction on the Maximum Number of Shareholders,Multiple Classes of Shares with Varying Rights Allowed (Including Fractional Shares)
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Taxation
Tax Efficient Structure ,No Corporate Tax,Unlock DTAA Benefits with Tax Residency Certificates
Learn MoreExempt SPVs and Foundations
SPVs and foundations that demonstrate to the satisfaction of the Registrar they meet the below exemption criteria.
- A corporate body established pursuant to any law issued by Rule of the Emirate of Abu Dhabi including the ADGM Founding Law or any Federal Law other than concerning Commercial Companies and its subsidiary/World Bank.
- A legal entity currently registered in ADGM holding a current Financial Services Permit issued by ADGM FSRA.
- Financial institutions are currently licensed and regulated by the UAE Central Bank.
- Company whose shares are trading on a regulated market in the UAE (ADX, DFM and NASDAQ DUBAI).
- Company that has demonstrated to the satisfaction of the Registrar to have adequate presence in the United Arab Emirates.
Nexus Requirement for ADGM SPVs
ADGM requires all SPVs to prove Nexus requirement. This can be satisfied by any of the following:
- Shareholder holds a valid UAE residence Visa and resides in the UAE, or the Shareholder is a GCC national.
- The SPV would invest in a business operating in the UAE or the GCC Region among other global businesses. This can be in the form of shares in an underlying UAE-based free zone entity, or any underlying entity in the GCC countries.
- The SPV facilitates transactions connected, or provides real or economic benefit, to the UAE.
Documents Required for SPV Formation and Foundations
For Individual Applicants - Shareholders, Directors or Authorized Signatory.
- Business plan
- Brief CV of shareholders
- Copy of a valid Passport
- Copy of UAE Visa page and Emirates ID Card
- Emirates ID Card
- Proof of residence address – not more than three-months old (Utility bill, bank statement with nameand address)
For Corporate Applicants – Shareholders and Directors
- Business plan
- Certified Certificate of Incorporation
- Certified Certificate of Good Standing
- Certified Memorandum and Articles of Association
- Original resolution approving the incorporation of SPV
- Original Certificate of Incumbency
- Passport copies of Ultimate Beneficial owners
- Audited financial statements/ Management accounts
Use Cases of ADGM SPVs
- ADGM SPVs excel in securitization, enabling lenders to collateralize loans with asset-backed securities. This prioritizes investors, offering primary rights to assets purchased through loan proceeds and safeguarding the originator's other assets.
- Maximize property acquisition with ADGM SPVs, ensuring secure title to real assets.
- Boost capital without adding to the parent company's debt load through effective use of ADGM SPVs.
- Seamlessly transfer assets and associated agreements using ADGM SPVs for a streamlined and efficient process.
- Establish project companies through ADGM SPVs for joint ventures, providing a shield for partners from associated risks.
- Strategically raise capital with ADGM SPVs, benefiting from favorable rates and improved creditworthiness backed by SPV assets—ideal when the parent company's credit rating is lower.
- Safeguard valuable IP by placing it in a dedicated ADGM SPV. This not only helps in raising funds but also facilitates entering into license agreements with third parties.
Why KPI as your Trusted Advisor?
- Licensed CSP Provider - KPI is licensed by ADGM, offering CSP services for smooth SPV incorporation. We serve as the CSP/registered agent, ensuring continuous good standing.
- Years of Experience - We boast a solid track record in successfully establishing SPVs since the very start of ADGM's regime.
- ADGM Trailblazers - As the inaugural entity to register at ADGM, we've played a vital role in nurturing the center's growth from its inception.
- Expert Team – Our team includes CFA Charter holders, seasoned risk and compliance experts ready to serve you with their expertise.
Let us handle it for you
Streamlining your SPV experience with expert care and precision.
Frequently Asked Questions
ADGM or Abu Dhabi Global Market is an award-winning international financial centre strategically located in the capital of the United Arab Emirates. Established by UAE Federal Decree, ADGM's jurisdiction extends across the entire 114 hectares of Al Maryah Island.
Yes, All ADGM-registered companies are eligible to apply for a Tax Residency Certificate from the UAE Ministry of Finance to benefit from the UAE’s extensive double tax treaty network.
ADGM SPV can be of two types,
- - Private Company limited by shares; or
- - a Restricted Scope Company.
Once all the required documents are submitted online on ADGM portal, it takes about a week for ADGM to review and issue the incorporation certificate. ADGM might request for additional documents or seek clarification on the documents submitted.
ADGM fees for setting up of SPV is USD 1,600. Annual renewal fees is USD 1,200
There are no restrictions on who can set up an ADGM SPV. It can be an individual or a corporate entity but a minimum of one shareholder is required.
ADGM also provides the option, to applicants meeting certain criteria, for an SPV to be formed as a ‘Restricted Scope Company’ (RSC). RSCs are required to make only limited information disclosure on the public register although full disclosure to the ADGM Registrar is mandatory.
No. ADGM SPVs are not entitled to obtain visas.
Any company incorporated at ADGM requires a physical registered office address. However for SPV and Foundations, under the new CSP regime, CSP will provide the registered office address for the SPVs and Foundations.
There are no restrictions on shareholding. No maximum numbers of shareholders and no maximum amount of share capital. However, the SPV might be required to identify the Ultimate Beneficiary Owner of the SPV as per the regulations.