ADGM opens its special purpose vehicle regime to international investors.
Abu Dhabi Global Market (ADGM) has removed the nexus requirement that previously applied when establishing a Special Purpose Vehicle (SPV). Applicants no longer need to demonstrate a connection to the UAE or the Gulf Cooperation Council (GCC), meaning the structure is now open to founders, investors and corporate groups wherever their shareholders and assets are based.
The previous nexus requirement
An SPV is ADGM’s passive holding and structuring vehicle, commonly used to hold shares, intellectual property or real estate, and to separate assets and liabilities within its own legal entity. Under the earlier policy, an applicant typically had to satisfy the requirement that the entity would hold a UAE or GCC registerable asset within six months of incorporation.
A company with no ownership or assets in the region would generally fall outside these tests, ruling ADGM out as a holding jurisdiction regardless of its other merits.
What the changes mean in practice
With the nexus requirement removed, ADGM no longer assesses applicants on the basis of residency or asset location. A holding structure with investors and assets spread across Asia, Europe and the Middle East can now weigh ADGM on its practical merits, rather than being screened out by a residency or asset test from the outset. That comparison typically comes down to the same factors that should decide any holding company location: the legal and regulatory framework, tax position, investor base, banking requirements, governance, cost and future growth plans.
Requirements that still apply
Removing the nexus requirement does not remove every local element of establishing an ADGM SPV. Two requirements remain in place:
- Appointing and maintaining an ADGM-licensed Company Service Provider (CSP)
- Appointing at least one Qualifying Authorised Signatory
The CSP handles the incorporation process, provides the registered office and acts as the main point of contact with the ADGM Registration Authority for ongoing statutory filings. Non-exempt SPVs must appoint one and maintain the appointment for as long as the entity exists.
The Authorised Signatory must be a UAE resident or GCC national. Despite the title, the role does not carry general authority over the company. It is primarily a licensing requirement, and appointment to the role does not give the individual authority to sign contracts or make decisions on the company’s behalf. Under ADGM’s common law system, that authority remains with the company’s directors and shareholders unless specifically delegated.
What this means for international businesses
For businesses without an existing UAE presence, the change makes ADGM available as a holding jurisdiction for the first time, regardless of where their ownership and assets sit.
For groups with a holding structure already in place elsewhere, it is worth asking whether that structure still matches their current investors, banking relationships and plans. ADGM also permits eligible companies to continue, or redomicile, into it as the same legal entity. This means existing contracts, assets and accounts move across the company, rather than requiring a new entity to be set up from scratch.
Businesses reviewing a UAE holding structure, new or existing, should seek professional advice on how the updated regime applies to their circumstances.
