ADGM
ADGM: An Independent Common Law Jurisdiction in Abu Dhabi
Abu Dhabi Global Market was established in February 2013 under Federal Decree No. 15 of 2013 concerning the establishment of a financial free zone in the Emirate of Abu Dhabi, together with Abu Dhabi Law No. 4 of 2013. It is not a business park with a tax story. It is a separate legal jurisdiction.
- Straight answer on whether you need a common law jurisdiction at all
- Regulated versus non-regulated route determined before you apply
- Entity and structure chosen against your investor requirements
- Accounting, audit and corporate tax handled by the same team after
A licensed UAE tax practice, not a licence broker.
Quick Answer
Abu Dhabi Global Market (ADGM) is an international financial centre on Al Maryah Island, established in February 2013 under Federal Decree No. 15 of 2013 and Abu Dhabi Law No. 4 of 2013. It operates as an independent legal jurisdiction with its own ADGM Courts, and is regulated by two bodies: the Financial Services Regulatory Authority (FSRA) for financial services, and the ADGM Registration Authority for company registration and commercial licensing under the Commercial Licensing Regulations 2015 (as amended).
The Legal Basis, Precisely
ADGM rests on two instruments issued in 2013: Federal Decree No. 15 of 2013, which established a financial free zone in the Emirate of Abu Dhabi, and Abu Dhabi Law No. 4 of 2013 concerning Abu Dhabi Global Market itself.
That pairing matters. A federal decree creating the financial free zone, plus an emirate-level law constituting the body, is what allows ADGM to apply its own legal framework rather than UAE civil law.
The practical consequence is that contracts, company law and dispute resolution inside ADGM work on terms an international investor or lender already recognises.
- Federal Decree No. 15 of 2013 established the financial free zone
- Abu Dhabi Law No. 4 of 2013 constituted ADGM
- Its own ADGM Courts, with a digital case management platform
- An independent legal jurisdiction, not merely a licensing zone
Two Regulators, Two Different Journeys
People conflate these constantly, and it costs months.
The Registration Authority handles company registration and commercial licensing under the Commercial Licensing Regulations 2015 (as amended). Its functions include registering ADGM establishments, maintaining the register of companies, partnerships and foundations, registering post-incorporation documentation and changes to directors, officers, shareholders and share capital, plus enforcement, strike off, dissolution and restoration. It also registers real property interests.
The FSRA regulates financial services. If your activity is regulated, you are dealing with capital requirements, fit-and-proper assessment of your people, compliance functions and continuing reporting.
Work out which applies to you first. Everything else follows from it.
- Registration Authority: incorporation and commercial licensing
- Commercial Licensing Regulations 2015 (as amended) govern the licensing side
- FSRA: financial services regulation and supervision
- Regulated applications carry capital and compliance requirements
- Non-regulated entities take a considerably shorter route
What ADGM Licenses
Financial services are the core: investment banking, fintech, private equity, venture capital and asset management. Around that sit legal and tax services, which are treated as controlled activities, and general commercial business.
Real estate has its own track through the AccessRP platform, and real estate brokers now fall under a classification framework.
Entity options include incorporated companies, FSRA-regulated financial firms, foundations, partnerships and trusts. The foundation in particular is used heavily for succession and family wealth structuring, and it is one of the reasons private clients look at ADGM rather than a conventional free zone.
- Investment banking, private equity and venture capital
- Fintech and asset management
- Foundations, trusts and partnerships for wealth structuring
- Legal and tax services as controlled activities
- Real estate interests registered through the Registration Authority
ADGM or DIFC?
The honest answer is that they are more alike than different. Both are financial free zones. Both run common law frameworks with their own courts and independent regulators. Both are credible to international counterparties.
DIFC was established in 2004 and is in Dubai; ADGM in 2013 and is in Abu Dhabi. DIFC has the longer track record and the larger financial ecosystem. ADGM has built a strong position in foundations, private wealth and certain fintech routes.
In practice the deciding factors are mundane: where your people and counterparties are, which regulator has the permissions your activity needs, and where your capital comes from. Anyone who tells you one is categorically better has not asked enough about your business.
- Both: common law framework, own courts, independent regulator
- DIFC: established 2004, Dubai, larger financial ecosystem
- ADGM: established 2013, Abu Dhabi, strong in foundations and wealth
- Decide on permissions, people and capital, not on prestige
The 0% Question, Answered Honestly
No free zone grants you 0% corporate tax. The zone issues a licence; the Federal Tax Authority decides your rate. To pay 0% you have to be a Qualifying Free Zone Person, and that status is tested every year against your actual income, not your address.
Revenue billed to mainland UAE customers is generally not qualifying income. It carries 9%.
We file the corporate tax returns for companies in these zones, which is why we would rather have this conversation before you pay a licence fee than at your first return.
- Qualifying income, tested against your real invoices
- Adequate substance maintained inside the zone
- Transfer pricing compliance, including with related parties
- Audited financial statements, not optional for a QFZP
- Election and registration handled on time, every year
What We See Go Wrong at ADGM
The commonest error is applying for the wrong thing. A founder describes a business that sounds financial, gets pointed at the FSRA route, and spends months on an application their activity never required. The reverse also happens, and is worse: a business that genuinely is carrying out a regulated activity sets up under a commercial licence and finds out later.
The second is underestimating substance. ADGM entities used for holding and structuring still sit inside the UAE corporate tax regime. A foundation or holding company with no people, no premises and no decision-making in the UAE is a weak position to defend.
The third is cost of ownership. ADGM is a full jurisdiction, with the reporting and audit obligations that implies. Businesses that chose it for the letterhead find the annual cycle heavier than they budgeted for.
None of that is an argument against ADGM. It is an argument for knowing why you are there.
- Applying to the FSRA when the activity was never regulated
- Operating a regulated activity under a commercial licence
- Holding structures with no substance behind them
- Underbudgeting the annual audit and reporting cycle
The ADGM Courts, and Why Counterparties Ask About Them
ADGM has its own court system, with a digital platform for case management. For most business owners that sounds like a detail for lawyers. It is actually one of the main commercial reasons the jurisdiction exists.
When a foreign investor, lender or joint venture partner reviews a deal, one of the questions their counsel asks is what happens if this goes wrong, and where. A common law court applying a familiar body of law is a materially easier answer than an unfamiliar civil law forum in a second language.
That is why ADGM and DIFC show up so often in shareholder agreements, financing documents and holding structures, including for businesses that trade nowhere near either.
If nobody in your structure has ever raised the question, you probably do not need the answer.
- ADGM Courts apply a common law framework
- Digital case management platform for filings
- Familiar dispute resolution reassures foreign investors and lenders
- Frequently chosen for shareholder and financing documentation
- Little value where no counterparty requires it
What It Costs to Run, Not Just to Open
Setup cost is the number everyone compares. Running cost is the number that decides whether the structure survives.
An ADGM entity carries annual obligations: maintaining the register, filing post-incorporation changes to directors, officers, shareholders and share capital, accounting records, audit where required, and corporate tax registration and filing like any UAE taxable person. Regulated firms add compliance reporting on top.
None of that is unreasonable for a jurisdiction of this type. It is simply heavier than a standard free zone licence, and it recurs every year whether or not the business traded.
Dormant holding companies are where this bites hardest. The entity does nothing, and the annual cycle still has to be completed and paid for. Budget the decade, not the first invoice.
- Annual register maintenance and post-incorporation filings
- Accounting records and audit where required
- Corporate tax registration and filing as a UAE taxable person
- Additional compliance reporting for FSRA-regulated firms
- Costs recur even where the entity is dormant
Related Exiloz Services & Guides
When was ADGM established and under what law?
February 2013, under Federal Decree No. 15 of 2013 concerning establishing a financial free zone in the Emirate of Abu Dhabi, together with Abu Dhabi Law No. 4 of 2013 concerning Abu Dhabi Global Market. Both instruments are cited in the Ministry of Economy & Tourism registrar record for the ADGM Registration Authority.
Who regulates ADGM companies?
Two bodies with distinct remits. The ADGM Registration Authority handles company registration and commercial licensing under the Commercial Licensing Regulations 2015 (as amended), along with the register of companies, partnerships and foundations. The Financial Services Regulatory Authority (FSRA) regulates financial services activity. Which one leads your application depends on whether your activity is a regulated financial service.
What law applies in ADGM?
ADGM operates as an independent legal jurisdiction with a common law framework and its own ADGM Courts, rather than the UAE civil law that applies on the mainland and in conventional free zones. That framework is the main reason internationally-facing structures choose it.
Is ADGM better than DIFC?
Neither is generally better. Both are financial free zones with common law frameworks, their own courts and independent regulators. DIFC is older, established in 2004, sits in Dubai and has the larger financial ecosystem. ADGM was established in 2013 in Abu Dhabi and is strong in foundations and private wealth structuring. Choose on where your counterparties and people are, and which regulator holds the permissions your activity needs.
Can I set up a foundation in ADGM?
Yes. The Registration Authority maintains the register of companies, partnerships and foundations, and ADGM foundations are widely used for succession planning, family wealth and asset holding. As with any holding structure, the corporate tax and substance position needs to be considered rather than assumed.
Do ADGM companies pay UAE corporate tax?
Yes, ADGM entities are within the UAE corporate tax regime. Being in a free zone does not by itself produce a 0% rate. Qualifying Free Zone Person status is tested annually on qualifying income, adequate substance, transfer pricing compliance and audited financial statements.
Does ADGM suit a small business?
Usually only where the legal framework is genuinely needed, for example because investors require common law documentation or the activity is regulated. ADGM carries the reporting and audit load of a full jurisdiction, and a small trading or advisory business with no such requirement is generally better served elsewhere.
The rest of what we do
Licence, visas, bank account, books and the first tax return — handled by the same team, so the structure has to survive its first year.
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Accounting & Bookkeeping
Books kept audit-ready from month one, not reconstructed at year end.
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Audit Preparation
Schedules, reconciliations and the evidence your auditor will ask for.
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Payroll & WPS
Payroll, WPS files and end-of-service calculated correctly.
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Tax Residency Certificate
Day-count position verified and the FTA document pack assembled.
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Customs Registration
Client code and Mirsal registration, before your first shipment, not after.
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ICV Certification
Score modelled and improved before the audit, not explained afterwards.
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UAE Free Zones
All 33 zones compared by emirate, with the founding law and what each is really for.
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Company Formation
Mainland, free zone and offshore incorporation, started from your activity code.
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Considering ADGM?
We will establish whether your activity is regulated, whether you need a common law jurisdiction at all, and what the structure costs to run each year.
