Abu Dhabi Global Market (ADGM) – An alternative route into Africa

The Abu Dhabi Global Market (ADGM) is a financial free zone located in the heart of Abu Dhabi that is strategically positioned for the growing economies of the Middle East, Africa and Asia. It became fully operational in October 2015 and provides for 100% foreign ownership. The direct application of English common law makes ADGM the first jurisdiction in the Middle East to adopt a similar approach to that of Singapore and Hong Kong.

The governing legislation of the ADGM is UK Common law and it has its own courts system, which follows the UK common law system when handling disputes that may arise. ADGM Courts and its judiciary are broadly modelled on the English judicial system to create a coherent, recognised and accepted legal framework and judicial system.

ADGM is not only for financial services. Its legal and operational platform is attractive for a broad range of professional and business services, along with family businesses, corporate headquarters and various management functions. It also provides a beneficial environment for domicile holding companies, special purpose vehicles and other structures to hold and protect assets.

The ADGM has implemented a comprehensive, cost effective and flexible Special Purpose Vehicle (SPV) regime, which is a corporate vehicle established for the purpose of isolating financial and legal risk by ring-fencing assets and liabilities. SPVs can be established as subsidiaries, project or joint venture vehicles, to ensure that only those assets related to a transaction are exposed to the liabilities associated with that transaction.

ADGM vehicles are affordable and easy to set up and shareholder(s) and/or directors are not required to travel to the UAE in order to incorporate the company. An ADGM SPV can open bank accounts in the UAE and in many other jurisdictions around the world. It can be used for investing in real estate and for the securitisation of assets.

International companies that are looking for a cost effective and tax efficient vehicle through which to invest into Africa need look no further than an ADGM SPV. It is set to become the Middle East’s answer to the more traditional ‘offshore’ jurisdictions such as the British Virgin Islands, the Seychelles and Mauritius. The benefits of operating from ADGM include:

• 100% foreign ownership – Ease of setting up businesses
• 0% personal and corporate tax – Unlimited repatriation of capital
• English Common law jurisdiction – Independent ADGM Courts operating under English law
• Variety of legal structures available – Incorporation generally within a few days
• No physical office space requirement – Independent regulatory framework
• Registered address is provided by Sovereign – No limit on number of shareholders
• No attestation required for corporate documents – Minimum of one director/shareholder only
• Multi-class shares with different rights attaching to each class

Sovereign Corporate Services has established an office in the ADGM and was recognised as the first licensed ‘Corporate Services Provider’ within its regulatory framework.

For more information on the ADGM SPV please contact us at ad@SovereignGroup.com