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SPV Company in ADGM: A Guide
The Abu Dhabi global market’s has got many of the SPV companies. Its financial free zone has created a flexible, robust and efficient special purpose vehicle regime that competes to many other businesses in the world. We should also understand the fact that the Abu Dhabi global market has been open for business only since 2015. But it has already got the attention of businesses all over the world for its uniqueness and business welcoming attitude. And the kind of offerings that the Abu Dhabi global market gives is much better than many other markets in the world.
What is ADGM?
The Abu Dhabi global market is an international financial center for local, regional and international institutions that are established in Abu Dhabi. Abu Dhabi as we know is the capital of the United Arab Emirates. And this global market is open for business since 2015 as we discussed earlier. The Abu Dhabi Global Market has been voted for the financial center of the year and has continuously brought out innovative solutions for the growing financial services market in the region.
Which are the independent authorities within ADGM?
Well, ADGM has three independent authorities. The first one among that is the Registration Authority and the second is the Financial Services Regulatory Authority (FSRA) and then followed by ADGM Courts.
What is SPV?
SPVs are nothing but the Special Purpose Vehicles. They are commonly seen to establish in order to isolate financial and legal risk by ring fencing assets and liabilities. SPVs can be easily established as subsidiaries. It also an be established as project or joint venture vehicle to ensure that only those asserts related to a transaction are exposed to the liabilities associated with that transaction.
SPVs in ADGM, FEATURES:
Are you really concerned about knowing the features of SPV companies in ADGM?
If yes let us now discuss about the features of the SPVs in ADGM. One of the important and at the same time valuable factor regarding this is that the ADGM SPVs offer multiple classes of shares. It includes fractional shareholding, first in the region. Let us now turn up to the most important features of SPVs in ADGM.
- No attestations for corporate documents – certified copies suffice.
- No restrictions on nationality of ownership.
- Minimum requirement of just one shareholder and 1 director – can be non resident.
- One GCC resident authorized signatory required.
- No minimum share capital.
- No maximum number of shares.
What are the typical uses of an SPV?
Do you know the fact that the ADGM SPV can easily be used to hold investments in United Arab Emirates, Saudi Arabia or in any other countries in the world, and this can be in the form of shares in these underlying entities, warrants and notes and notes as well. When we consider these factors, the importance of ADGM SPVs goes higher. The SPV can also derive dividend income from these investments and also capital gains when divested.
Can ADGM SPVs act like operational holding companies?
This is a question that is very relevant if you are hoping that the ADGM company can act as operational holding company, it is completely wrong information. You should note that the ADGM SPVs cannot act as operational holding companies. This would clearly mean that it cannot have employees, office space and generally conduct any activities that can be considered as active management of the underlying investments. In that case it is truly recommended to set up an operational holding company in the ADGM.
If you are a bright mind who is really wanting to set up a SPV in ADGM, never be worried because it is an ocean full of opportunities. Thus if you are planning so, do not waste your valuable time but go forward without delay. As you might already know and as we have been discussing, setting up an SPV company in Abu Dhabi Global Market is a desire of many of the bright business minds around the world. When it comes to SPV, the most important name that can be added along is nothing but ADGM. Therefore make use of your time and opportunities and if you need anything more about this please feel free to reach us out in FIMKIN.