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The Abu Dhabi Global Market (“ADGM”) is quickly becoming one of the most attractive jurisdictions in the United Arab Emirates for establishing Special Purpose Vehicles (“SPVs”). These entities are widely used as holding companies because they provide a cost-effective, flexible, and legally robust option for structuring businesses, as the ADGM is an English Law governed free zone. An ADGM SPV enables companies to ring-fence their assets and liabilities, while investors benefit from the protection of a robust regulatory environment.

One of the primary advantages of an ADGM SPV is its cost-efficiency and simplicity. Incorporation is fully digital, which reduces both time and expense, and there is no requirement for any party to be physically present in the UAE during the process. Additionally, an SPV uses the registered office address of its Company Service Provider, removing the need to lease office space, which reduces costs.

The shareholding structure of an ADGM SPV is highly flexible. There is no minimum share capital requirement, no restrictions on the nationality of shareholders, and no limit to the number of shareholders. ADGM provides model Articles of Association, which can be customised to include multiple classes of shares with different voting, dividend, and distribution rights. This flexibility makes ADGM SPVs especially attractive for businesses and investors who wish to tailor governance and shareholder rights to their specific needs. Investors are further reassured because ADGM SPVs can issue convertible instruments, and the regulatory framework recognises and enforces investor rights, providing confidence that their investments are legally protected.

To establish an SPV in ADGM, certain eligibility criteria must be met. First, the SPV must demonstrate a nexus to the GCC. This can be achieved if GCC nationals or residents hold at least 25% of the shares, or if the SPV owns (or is in the process of acquiring) an asset in the GCC, such as real estate, intellectual property, or shares in another company. Second, the SPV must have a clearly defined purpose, as it is a passive holding entity and cannot engage in active commercial operations or sponsor employees. A business plan must be submitted at the time of incorporation to outline the purpose and establish the nexus, and this purpose should typically be achieved within six months of incorporation. Third, every SPV must appoint at least one authorised signatory who is either a GCC national or a UAE resident. Finally, most SPVs must engage an ADGM-licensed Company Service Provider for incorporation, ongoing management, and to provide a registered office address, unless the entity qualifies for an exemption.

Once incorporated, SPVs must comply with both annual and event-driven obligations. Annual requirements include filing an annual confirmation statement, renewing the commercial license and data protection declaration, updating KYC information, and submitting financial accounts. Most SPVs fall within the “small companies regime,” which requires only a signed balance sheet and supporting board resolution to be filed. Event-driven filings are also important. Any change to directors, shareholders, or stakeholder details must be filed with ADGM, typically within 14 days, to avoid penalties. In addition, SPVs may request official certificates such as certificates of incumbency, good standing, or no objection certificates, which are often needed for banking, investor, or regulatory purposes.

Ultimately, ADGM SPVs combine simplicity, cost-effectiveness, and robust legal protections. They are increasingly being used by startups, family offices, investment funds, and multinational groups to structure investments, protect assets, and raise capital. With the ability to issue convertible instruments, create tailored share structures, and provide enforceable investor rights, they represent a strong launchpad for attracting funding and expanding regionally.