Special Purpose Vehicles (SPVs)

Special Purpose Vehicles (SPVs), sometimes known as a Special Purpose Entity (SPE), are passive holding companies which are established mainly for the purpose of isolating financial and legal risks; however, SPVs cannot be used to conduct operational business or hire staff.

ADGM SPVs

The Abu Dhabi Global Market (ADGM) caters to the needs of a variety of business types and industry sectors and uses. With a flexible, robust and efficient regime, ADGM provides a user-friendly and fully digital registration process for those looking to set up an SPV.

We, at Ascent Partners, provide hassle-free services for individuals looking to set up an SPV in one of most prominent financial centres in the MENA region.

Why set up a Special Purpose Vehicle (SPV) in ADGM?

The Abu Dhabi Global Market (ADGM) provides ample benefits for individuals looking to set up a Special Purpose Vehicles. Some of the popular benefits include the following:

Tax residency: All entities registered under the ADGM are eligible to apply for a Tax Residency Certificate from the UAE Federal Tax Authority (FTA) to benefit from the UAE’s Double Tax Treaty network. The registered entities would require meeting the criteria set out by the FTA.

Legal system: ADGM’s legal system follows the Foundations Regulations of 2017 and the English Common Law principles. Its Civil and Commercial Laws are based on the laws of England and Wales which directly apply to all registered entities. This ensures an unmatched international standard for businesses when they set up an ADGM SPV.

Migration and continuance permitted: ADGM allows for the relocation and redomicile of companies from other jurisdictions. However, you will have to check if your current jurisdiction allows for outbound migration. Some of the jurisdictions that permit migration and continuance into another jurisdiction include British Virgin Islands, Cayman Islands, Jersey and Guernsey, among others.

Employee Stock Option Plan: With an SPV, you can also set up an Employee Stock Option Plan (ESOP). You can issue shares or options to the SPV depending on the number of options to be given to employees

Ability to use an agent or corporate service provider: ADGM allows the use of an agent or a corporate service provider to manage the SPV and provide a registered office address.

No attestation required: In the ADGM, you would not need to attest the corporate documents, unless specified.

What are the advantages of setting up an SPV with Abu Dhabi Global Market (ADGM)?

Some of the popular advantages of setting up an SPV in ADGM include:

Ability to set up in a Tier 1 international financial centre

Comprehensive tax treaty network and access to the broad UAE Double Tax Treaty network

No requirement to file or audit account unless requested by the Registrar

Any property of a minimum value of USD 100 can be considered as an asset

What are the types of ADGM SPV that can be incorporated?

SPVs of the following types can be incorporated in ADGM:

Private Company (Limited by Shares – LTD): A Standard Private Limited Company or a Passive Holding Company

Restricted Scope Company (RSC): An RSC is a unique ADGM legal structure that offers limited information disclosure on the Public Register but provides full disclosure to the ADGM Registrar. It can be incorporated as a subsidiary of another corporate body, a subsidiary of a company formed by Emiri decree, or a subsidiary of a Single-Family Office.

What are the primary application documents required to set up an SPV in ADGM?

Articles of Association: Either the model articles, model articles with amendments, or bespoke articles can be submitted

Registered office address: For non-exempt SPVs, a copy of the signed consent letter for provision of registered office by the appointed Company Services Provider will be required. On the other hand, an exempt ADGM SPV may use a registered office address of its ADGM-registered parent or related entity.

A copy of the Resolution of Board of Directors or Shareholders

A copy of passport information and signature page for each Authorised Signatory, Director, Shareholder and Beneficial Owner

A copy of UAE visa page and passport copy for each Authorised Signatory (for UAE residents)

A copy of Emirates ID for UAE/GCC national Authorised Signatories

A certified copy (certified with last three months) of the Certificate of Incorporation/Registration for each Director and Shareholder that is a body corporate

Who are considered as Exempt Applicants?

A body corporate that is a subsidiary meeting any of the following criteria will not need to hire the services of a company service provider and will be considered as Exempt Applicants for an ADGM SPV:

Any persons exempt under the Commercial Licensing Regulations of 2015 (Exemptions) Order 2020

An authorised person as specified within the meaning of the Financial Services and Markets Regulations 2015

Any persons licenced or regulated by the Central Bank of the United Arab Emirates

Any company whose shares are admitted to trading on a regulated market in the UAE, including the Abu Dhabi Global Market

A company that has—to the satisfaction of the Registrar—either substantial assets, turnover and employees in the UAE; adequate governance policies and procedure as specified by rules made by the Board or the guidance issued by the Registrar

For the purpose of assessing whether a company has demonstrated adequate presence in the UAE, the Registrar may regard to the following, among other factors:

The company’s assets, turnover and employees in the UAE

The company’s governance policies and procedures

Any rules made by the Board or guidance issued by the Registrar

The Registrar may require such information and supporting documentation as needed.

Who are considered as Non-Exempt Applicants?

Non-exempt applicants are considered as those who do not meet the criteria of Exempt Applicants. Non-exempt applicants will have to appoint an ADGM-licenced company service provider before submitting an application with ADGM Registration Authority. The Company Service Provider will be responsible for both the formation and administration of the SPV. Get in touch with our experts at Ascent Partners for any assistance with setting up an ADGM SPV.

How can Ascent Partners help?

Ascent Partners provides bespoke business setup services for individuals looking to set up their new venture in the UAE.

With extensive experience in setting up Special Purpose Vehicles in one of the most prominent financial markets in the MENA region, we provide consultation and end-to-end solutions for a hassle-free experience.

We work alongside you to strategise and start up so you can secure your investment in the UAE. Get in touch with us today at ask@ascentpartners.ae or at 04 422 7339 to know more.