Setting Up Of Special Purpose
Vehicles In ADGM
What are ADGM SPVs (Special Purpose Vehicles)
ADGM SPVs are corporate vehicles established to protect the assets and liabilities of parent company and to eliminate the financial and legal risk. SPVs have a separate legal status. The creditors of the SPV can not claim or attach the assets of the parent company or the shareholders of SPVs. ADGM offers a robust platform to setup SPVs with a specific or limited corporate objectives
- SPVs can hold assets anywhere in the world, however, an appropriate nexus to ADGM, the UAE or the GCC region needs to be demonstrated.
- The Registration Authority reserves the right to grant license to SPVs on a case-by-case basis. At least one authorized signatory must be a UAE resident holding valid UAE Visa (such individual could be a director or a shareholder).
- SPVs cannot conduct business activities or employ staff and accordingly no UAE Residence Visa will be granted.
How SPVs Help? The Benefits
- Common law jurisdiction
- No physical registered address requirement
- Minimum one shareholder/ director
- Corporate shareholder / director permitted
- Company secretary not required
- Restricted Scope Company available
- Low registration and operating cost
- Tax efficient / No corporate tax
- Can obtain tax residency certificates to avail DTAA benefits
- Migration and continuance permitted • No attestation required for corporate documents
- No requirement to file audited financial accounts
- No minimum or maximum share capital • No restriction on maximum number of shareholders
- Simple ongoing reporting requirements
- Multiple class of shares with varying rights allowed (including fractional shares)
Documents required for setting up a SPV
For individual applicants (shareholders/ directors / authorized signatory)
- Business plan
- Brief CV of shareholders
- Copy of a valid Passport
- Copy of UAE Visa page and 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
- To secure the loans extended by the lenders by creating asset backed securities
- Holders of the securities will have the first rights over the assets purchased through the proceeds of the loan
- Other assets of the originator are not exposed to recourse.
- To acquire title to real property.
- To raise funds without increasing the debt levels of Parent company
- To transfer assets and the associated agreements
- To form project companies for joint ventures, shielding JV partners from risks associated with the JV
- To raise capital at favorable rates, by enhanced credit worthiness of the SPV backed by the assets (in cases where Parents credit rating is comparatively poor)
- To separate valuable IP in a standalone SPV which can help raise funds and enter into license agreements with third parties
How Can We Help?
- Provision of nominee shareholders
- Customization of Articles of Association
- Provision of accounting
- Preparation of financial statements
- Company Secretarial services
- ESR filings
- Other administration services
Why KPI as your Trusted Advisor?
- KPI is licensed by ADGM to provide CSP services and assist in incorporating SPVs. Upon incorporation, KPI acts as the CSP/ registered agent and ensures the SPV remains in good standing.
- The experience – having helped establish several SPVs at the very beginning of SPV regime at ADGM
- We have been at the ADGM since inception - the 1st entity to register at the centre.
- Experienced professionals - CFA Charter holders, experienced risk and compliance, and banking professionals
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.