INTRODUCTION
Abu Dhabi Global Market (ADGM) is an international financial centre located in Abu Dhabi, operating under its own civil and commercial laws based on common law principles. It was established under Abu Dhabi Law No. 4 of 2013. Establishing a company in ADGM requires navigating a distinct legal framework governed by ADGM’s Companies Regulations 2020 and related rules. ADGM offers 100% foreign ownership, an independent regulator and judiciary, and a business-friendly incorporation process.
This article outlines the aspects of establishing a company in ADGM, including permissible company types, documentation, steps for incorporation, licensing categories, timelines, costs and capital requirements, along with winding-up and dispute resolution mechanisms.
INCORPORATION OF THE COMPANY
TYPES OF COMPANIES OR ENTITIES
ADGM permits a broad range of legal entity types under its regulations to accommodate various business needs. The primary company forms in ADGM include:
Private company limited by shares (Ltd) (Section 3(1) of the Companies Regulation 2020):
A company whose liability is limited to the amount unpaid on shares held by its members.There is no statutory minimum share capital requirement; it requires at least 1 shareholder, 1 director. The company secretary is not mandatory. Public offering of shares is prohibited.Public company limited by shares (PLC) (Section 3(2) & 699 of the Companies Regulation 2020):
A company that can offer its shares to the public and may be listed on stock exchanges. The minimum share capital should be at least $50,000. At least 2 directors are required, one must be a natural person and a company secretary.Restricted Scope Company (RSC) (Section 3(3) of the Companies Regulation 2020):
A private company that benefits from reduced disclosure obligations, designed for specific use cases like family offices or group holding structures. The company must be a subsidiary undertaking of another body corporate that prepares and publishes group accounts, or directly or indirectly wholly-owned by a founding member as defined by the regulations. The name should include “Restricted” in the name.Special Purpose Vehicle (SPV):
A private company limited by shares established for a specific, narrow purpose, such as holding assets, facilitating transactions or securitisation. It may require the appointment of a Company Service Provider (CSP) unless exempt.Limited liability partnership (LLP) (Sections 1 & 4 of the Limited Liability Partnerships Regulations 2015):
A body corporate formed by two or more persons to carry on a lawful business for profit, combining elements of partnerships and companies. It is a separate legal personality from its members. The members have limited liability, and a minimum of 2 members is required.Limited partnership (LP):
A partnership consisting of one or more general partners with unlimited liability and one or more limited partners whose liability is limited to their contribution.Branch of a foreign company:
An extension of a foreign company registered to operate within ADGM without forming a separate legal entity; it operates as a part of the parent company and must be registered with the Registrar of the ADGM to conduct business.Cell Companies (Part 36 of the Companies Regulation 2020):
ADGM permits the formation of Cell Companies, which are entities capable of creating one or more separate "cells" within the same corporate structure. Each cell operates with distinct assets and liabilities, allowing legal and financial separation between them. This structure is particularly useful in the fund management and insurance industries. It is of two types:Protected Cell Companies (PCC): Cells have separate assets and liabilities, but are not separate legal entities.
Incorporated Cell Company (ICC): Each cell is a separate legal entity.
DOCUMENTATION REQUIRED
To incorporate a company in ADGM, a set of constitutional and supporting documents must be prepared and submitted to the ADGM Registration Authority. The core documents include:
Application Form & Business Plan:
The incorporation application is filed online via the ADGM Registry Solution. Applicants must select the business activity and legal structure and often provide a brief business plan or description of intended activities. For certain license categories (e.g., regulated financial services or tech startup licenses), ADGM specifically requires a more detailed business plan and additional approvals (for instance, fintech startups seeking the incentivised tech license must obtain a Hub71 approval letter). A financial services firm must first secure an In-Principle Approval from the Financial Services Regulatory Authority (FSRA) before proceeding with company registration.Constitutional Documents:
A Memorandum and Articles of Association, or simply Articles, since ADGM’s regime may not require a separate memorandum, is necessary to outline the company’s governance rules. ADGM provides standard Articles templates compliant with the Companies Regulations, which can be adopted or modified. If using custom Articles, the founders must ensure they comply with the ADGM Companies Regulations. For partnerships (LLP/LP), a partnership agreement serves a similar function. In practice, the articles of association are signed by the initial shareholder(s) as part of the incorporation package.Resolutions and Consent:
A resolution from the incorporators/shareholders confirming the decision to form the company in ADGM is usually required. Additionally, consent to act forms must be signed by each individual serving as a director and by each person acting as the company’s authorised signatory to formally accept their appointment.Identification and KYC documents:
ADGM mandates providing identification for all key individuals. As per AML 8.3.2, the required information of a person should be obtained through the review of an original, current, valid passport or, if a customer does not possess a passport, an official identification document (Emirates ID for UAE residents) that includes a photograph. The ADGM registrar may request to view documentation for individuals and UBOs (those holding 25% or more), related to the source of wealth/funds. These KYC documents must generally be dated within three months of the application.Registered Office Details:
According to Section 74 of the Companies Regulation 2020, a company is required to have the lease countersigned and the office within the ADGM jurisdiction. Section 39 states that a document is validly executed by a company if signed by two authorised signatories or by a director in the presence of a witness who attests the signature. If using a trade name different from the legal name, approvals or NOC for that name may also be needed in some cases.Additional Forms:
ADGM’s online system will generate other forms to be signed, such as a Name Reservation/Declaration acknowledging responsibility for the chosen company name and confirming it doesn’t infringe others’ rights. Ultimate Beneficial Owner (UBO) declaration identifying who ultimately owns/controls the company and a Data Protection declaration appointing a Data Protection contact person and outlining compliance with ADGM’s Data Protection Regulations. For certain categories like an SPV or a Tech startup license, a short business plan (in prescribed form) is required, and if a Company Service Provider (CSP) is involved, a consent letter from the CSP and an appointment form are included. ADGM introduced a CSP regime whereby small companies like SPVs and foundations must appoint an ADGM-licensed service provider to assist with incorporation and compliance, unless exempted.
In summary, a complete ADGM incorporation pack will consist of the application details, constitutional documents (Articles/partnership agreement), board/shareholder resolutions, identity and KYC documents for owners and managers, office lease, and any sector-specific approvals. ADGM does not generally require documents to be notarised or legalised if the parties are individuals, but corporate shareholders from abroad may need to provide attested incorporation certificates and board resolutions from the parent company, depending on ADGM’s checklist. Notably, all documents must be in English (or legally translated). The ADGM Registrar has the discretion to ask for further information during review.
PROCESS OF REGISTERING THE COMPANY
Establishing a company in ADGM involves a structured process overseen by the ADGM Registration Authority (RA). Below is a step-by-step overview of the process:
Determine business activity and legal structure:
The applicant must first define the nature of the intended business (financial, non-financial, or retail) and choose an appropriate legal structure. If the business involves regulated financial services (e.g. banking, asset management, insurance), prior approval from the ADGM Financial Services Regulatory Authority (FSRA) is required before incorporation. For most non-regulated businesses, one can proceed directly to incorporation. Choose the entity type (e.g. Private Ltd, LLP, etc.) that best suits the business.Name reservation:
Select an appropriate company name and ensure it meets ADGM’s naming rules. The name must be unique within ADGM and not infringe on any trademarks or well-known names. ADGM has Business and Company Name Rules restricting certain terms (e.g. “Bank”, “Insurance” require special approval). If the proposed name is similar to an existing entity, ADGM will require evidence of the applicant’s right to that name or a no-objection letter. Once an acceptable name is decided, it will be registered during incorporation (ending with the required suffix, e.g. “Ltd” or “LLP” as applicable).Prepare incorporation documents:
Gather all required documentation, including drafting the Articles of Association (using ADGM’s template or bespoke articles), the incorporation resolution of the initial shareholder(s), and completing all necessary forms (director consent forms, UBO declarations, etc.). Concurrently, secure the Registered Office in ADGM, identify office space in an ADGM zone and obtain a signed lease or a letter of intent from the landlord. A physical office address in ADGM is mandatory for registration. For special cases like SPVs or small firms, coordinate with an ADGM-licensed Company Service Provider if required to sponsor the application. ADGM’s rules require certain entities without their presence to appoint a CSP to handle incorporation formalities. If the business activity falls under “Retail” (e.g. opening a shop or restaurant in ADGM), ensure you have the necessary retail business plan and that the premises are in the designated retail zone. If any external approvals are needed (for example, FSRA initial approval for financial companies, or a Hub71 endorsement for tech start-ups), obtain those at this stage and have the approval documents ready to submit.Submit application through the ADGM online registry:
ADGM operates a user-friendly online portal for registration. Applicants (or their appointed CSP) will create an account and fill out the online incorporation form. The form will prompt for key company details: proposed name, legal structure, business activity, shareholder information, director and secretary (if any) details, UBO information, etc. The system will also require uploading the supporting documents (passport copies, signed forms, lease, etc.). Ensure the form is filled out completely and accurately; the completeness of the application will affect how quickly the license is issued. The application can be submitted along with the applicable fees.Application review and approval:
Upon submission, the ADGM Registration Authority (RA) will review the application. They will check compliance with the regulations, conduct due diligence (KYC/AML checks on shareholders/UBOs), and ensure all required documents are in order. The RA may come back with queries or requests for additional information, for example, clarification on the source of funds, or correction of any issues in the Articles. It’s common to have a few rounds of clarification. If the application is satisfactory, ADGM will issue an In-Principle Approval (for financial firms, this follows the FSRA approval). For standard non-financial companies, ADGM may go straight to final approval if all is in order. Once the incorporation is approved, the Commercial Licence and Certificate of Incorporation are issued upon payment of final fees. The company is then legally established in ADGM.Post-incorporation steps:
After incorporation, the company needs to undertake certain post-setup formalities. These include opening a bank account using the ADGM incorporation documents; note that banks often require the presence of the account signatories in the UAE for KYC, and in the case of some regulated firms, depositing the paid-up capital as required. The company should also register for ADGM’s Data Protection (DP) within 30 days, appoint a data protection officer, if not already done, and pay the DP registration fee. If the company employs staff, it needs to register with the ADGM Employment Affairs office and apply for visas via Abu Dhabi’s immigration system. ADGM entities sponsor employees through a government services office. Companies must also maintain their statutory registers of shareholders, directors, etc., at the registered office and ensure any special licenses, e.g. operating permits for retail, or regulatory permissions for financial services, are obtained before commencing business. Both ADGM and DIFC impose ongoing compliance, such as annual renewals of licenses and the filing of annual accounts or a confirmation statement.
Throughout the process, ADGM’s Registration Authority provides guidance and has published checklists for different entity types. Engaging a professional firm or corporate service provider can streamline the process, especially for first-time investors, by ensuring documentation meets ADGM’s legal requirements.
ADGM LICENSING CATEGORIES AND SCOPE OF ACTIVITIES
Once a company is formed in ADGM, it must have an appropriate commercial license to operate. ADGM’s licensing regime categorises licenses based on the nature of activities:
Financial Service License (Category A):
It refers to any applicant for a licence to carry on the controlled activity of financial services, such as banks, asset managers, broker-dealers, insurance companies, fintech payment services, etc. These companies need an FSRA license.. Companies under this category must comply with ADGM’s financial services rules and prudential requirements, including maintaining regulatory capital as set by FSRA. In the licensing fee structure, “Category A” refers to applicants for a financial services-controlled activity. These licenses typically have higher fees and requirements.
The Financial Services Regulatory Authority (FSRA) divides licenses into a number of categories, each with its own set of allowed activities and capital requirements.Category 1 License: Banks must have a minimum of $10 million in capital. Among the tasks are managing Payment Service and Investment Accounts (PSIA) and taking deposits. It is reserved for banks engaged in core banking activities like deposit taking, financing, and providing comprehensive financial services.
Category 2 License: A minimum capital of US $2 million is required for market makers and credit providers. Among the activities are principal trading and extending. It is designed for institutions offering credit and participating actively in financial markets (e.g., market makers, finance companies).
Category 3A License: A minimum capital of $500,000 is required for brokerage. Activities include acting as an agent or dealing in investments on a matched principal basis. It allows firms to operate as brokers, facilitating client trades while not taking large balance sheet risks.
Category 3B License: A minimum capital of $4 million is required for custodians. Activities include serving as a trustee and offering custody services for money. It focuses on the firms safeguarding financial assets rather than trading or lending.
Category 3C License: A minimum capital of $250,000 is required for asset and fund managers. Asset management, collective investment fund supervision, custodial services, and trust services are among the activities. It is suitable for fund managers and asset management firms providing portfolio management and fiduciary services.
Category 4 License: For advisors in insurance and investments, with a $10,000 minimum capital. Activities include arranging investment transactions, offering advice on credit and financial products, managing custody, facilitating insurance, and running platforms such as crowdfunding.
Category 5 License: A minimum of $10 million USD is required for Islamic businesses. Activities include running an Islamic finance company. It is intended for Islamic banks or businesses that provide financial services based on Sharia.
Non-Financial Commercial License (Category B):
This is the broad category for ordinary businesses that are not conducting regulated financial services. It includes professional services, holding companies, investment vehicles, tech companies, trading or consultancy firms, etc. ADGM’s Commercial Licensing Regulations define various controlled activities for non-financial services, ranging from consultancy, media, and tech, to oil & gas service activities, retail, etc.
A Category B license is the standard commercial license allowing the company to operate within ADGM’s jurisdiction and to do business internationally or in the UAE, subject to any local permits needed. As of 2025, ADGM significantly reduced the fees for Category B licenses to encourage more businesses: new non-financial licenses now cost around $5,000, down from $10,000, and annual renewals cost $5,000.
Non–Financial Activities include:Oil & gas field services: Engineering and technical firms offering healthy maintenance, equipment installation, and drilling tower setup.
Consulting services: Consulting services include management consultants, sustainability consultants, and business setup advisors.
Legal services Commercial, M&A, and arbitration law under ADGM's standard law system is provided by domestic and foreign law firms
Corporate services: Registered agents, company secretarial providers, compliance firms.
Example activities from your file:Natural gas and oil well repair
Onshore/offshore oil & gas facility services
Equipment installation for wells
Drilling tower repair
Retail License (Category C):
This category is for businesses engaging only in “other economic activities” involving retail business, for example, operating a shop, restaurant, or consumer service outlet in ADGM. The ADGM’s 2025 fee schedule shows a substantial fee reduction for retail: new retail licenses now cost about $2,000, down from $6,000 , with a $2,000 annual renewal. Retail license holders are typically subject to ADGM regulations and any Abu Dhabi Department of Economic Development coordination for consumer-facing operations.
The ADGM Retail license does not have formal sub-categories within its structure. However, the permitted activities under category C can be broadly organised into distinct business types:Food and Beverage Operations:
Restaurants, cafes, and food service establishments
Retail sale of food products and groceries
Manufacturing and direct sale of dairy products, prepared meals, and beverages
Catering and food delivery services
Retail Sales:
General merchandise and consumer goods
Electronics and technology products
Clothing, textiles, and fashion items
Health products and pharmaceuticals
Beauty and personal care products
Manufacturing with Direct Sales:
Producers of consumer goods who sell directly to end users
Food manufacturers selling packaged products
Companies producing frozen or prepared meals for retail
Service-Based Retail:
Beauty salons and wellness centres
Personal care and grooming services
Consumer-facing professional services
Special Categories and Incentives:
ADGM has introduced incentivised licensing schemes to promote certain sectors. For instance, ADGM offers a discounted license for Tech Start-ups and Venture Capital fund managers. Similarly, ADGM allows SPVs (Special Purpose Vehicles), which are usually Category B but with a simplified business activity, often holding assets, leasing aircraft, etc. SPVs benefit from a lower flat license fee of around $1,000–$1,900 and minimal substance requirements; however, they require a Company Service Provider unless exempt.Subcategories of Digital Asset Licenses
The FSRA's Virtual Asset Regulatory Framework formally splits this category into subcategories based on specific activities:For cryptocurrency-to-crypto or cryptocurrency-to-fiat trading platforms, VASP-Exchange: Needs a $1 million base capital and real-time transaction tracking.
VASP-Custodian: For companies that hold digital assets for customers, this requirement includes insurance, multi-signature wallets, and cold storage.
Broker-Dealer, or VASP: For organizations that carry out or plan trades in digital assets; requires $500,000 in capital and client suitability evaluations.
VASP-Adviser: Requires $250,000 in capital and disclosures of conflicts of interest for companies offering investment advice on virtual assets.
Payment Services (VASP): For companies that accept cryptocurrency payments; governed by AML/CFT and transaction reporting regulations.
Innovation license (RegLab)
Three different tracks are available in the RegLab program according to business maturity:For startups in their early stages, RegLab Start offers a 12-month testing window, provisional licensing, and less documentation.
For businesses in their growth stages, RegLab Scale offers conditional full licensing with phased compliance as well as increased customer access.
RegLab Global: Offers fast-track approvals and regulatory bridging with home jurisdictions for foreign companies entering the UAE market.
Sustainable Finance License: Activity Streams
This incentive-based category includes specialized streams:Green Fund Manager: Needs to be in line with the ICMA Green Bond Principles in order to manage ESG-compliant investment funds.
Issuer of Sustainable Bonds: Those companies that issue green, social, or sustainability-related bonds are qualified for marketing assistance and fee waivers.
Carbon Credit Marketplace: Websites that trade carbon offsets are required to adhere to global verification standards such as Verra or Gold Standard.
Family Office License: Structural Subtypes
ADGM supports family offices through differentiated licensing, even though it isn't always mentioned under incentives:The Single-Family Office (SFO) streamlines reporting and governance while managing the wealth of a single family.
Serving several families calls for a Multi-Family Office (MFO), which also needs more stringent AML regulations and independent directors.
Technology and Innovation Zones: Location-Based Incentives
In designated zones, there are extra benefits:With an emphasis on blockchain, AI, and fintech, ADGM Square provides networking opportunities, co-location, and access to investor pools.
The Al Reem Island Innovation Cluster offers infrastructure grants and rent subsidies with an emphasis on clean technology and smart city solutions.
Incentive Programs by Business Profile:
ADGM customises incentives for particular categories of applicants:Startup Waiver Program: for the first three years, setup and annual fees are reduced by 50%.
Green Pioneer Program: Complete waiver of licensing fees for ESG-compliant sustainable finance organisations.
Global FinTech Bridge: Accelerated licensing for companies from partner regulators (e.g., MAS Singapore, UK FCA).
The ADGM license, whether Category A, B, or C, will specify the permitted activities the company can engage in. ADGM uses an activity code system much like the UAE economic activities codes, listing everything from management consultancy to investment activities. A company can have multiple activities under one license if they are related, but some activities, especially financial ones, might require distinct approvals or higher categories. Importantly, an ADGM commercial license authorises the company to operate within the geographical confines of ADGM (the free zone). ADGM companies are exempt from needing further Abu Dhabi Department of Economic Development licenses for operating within ADGM, but if they actively do business in “onshore” Abu Dhabi outside ADGM, they may need to comply with onshore regulatory requirements (often by working through local distributors or obtaining a branch onshore). Internationally, ADGM companies are recognised as UAE companies and can do business abroad, subject to foreign laws.
TIMELINE FOR INCORPORATION AND LICENSING
A critical consideration for investors is how long it takes to set up and license a company. The timeline can vary based on the complexity of the business for regulated and unregulated businesses, and the preparation of their documentation:
Financial Regulated Firm:
If the company needs an FSRA financial services license (Category A), the timeline is considerably longer due to regulatory approvals. The process essentially has two stages: first, the FSRA authorisation (which can take several months), then the ADGM ROC incorporation. For example, obtaining a license for a Category 3 or 4 financial firm (like an asset manager or advisory firm) in ADGM might take 8 to 10 months from initial engagement to final licensing.
The FSRA itself will conduct a detailed assessment of the business plan, fitness and propriety of management, and capital adequacy. Typically, one might spend 3–4 months preparing the application and interacting with FSRA for initial approval, and once in-principle approval is granted, another few months to incorporate the entity, meet any conditions (such as hiring required staff, securing office premises, and injecting capital), and then receive the final FSRA license.Unregulated Business:
For a straightforward non-financial company (e.g. a consultancy, tech startup, or holding company), the incorporation process in ADGM is relatively quick. Once all documents are ready and submitted, approval can be obtained in a matter of a few weeks. In many cases, ADGM incorporation and commercial license issuance are completed in 4–6 weeks. This timeline includes time for name approval, document review, and addressing any queries from the Registrar. If the application is perfectly in order, some companies have been incorporated in as little as 1–2 weeks, but it is safer to budget about a month to allow for queries and internal approvals.
ADGM does allow one to reserve the name and even start on the lease arrangement in parallel to document processing, which can compress timelines. The availability of a CSP (if required) can also impact timing – engaging an ADGM-registered corporate service provider early can expedite KYC clearance for SPVs and smaller entities.
COST OF INCORPORATION AND CAPITAL REQUIREMENTS
ADGM offers a competitive and transparent fee structure aimed at attracting businesses of all sizes and sectors. As part of its pro-business regulatory enhancements, ADGM has recently streamlined and reduced many of its incorporation and licensing fees to facilitate easier entry and ongoing compliance. This section outlines the key costs associated with setting up and maintaining a legal entity within ADGM, including incorporation fees, annual license renewals, and related regulatory charges. It also highlights specific capital requirements applicable to various business types, helping founders plan their financial commitments effectively.
Registration Fee:
This is a one-time fee payable to the ADGM Registrar when setting up the company. For non-financial and retail companies, the standard new registration fee is now $5,000 (effective 1 Jan 2025, reduced from the previous $10,000 for non-financial and $6,000 for retail). For pure retail businesses, the new registration fee is only $2,000. Financial services firms (Category A) have a higher incorporation fee, recently increased to $20,000 for new Category A registrations , reflecting the additional regulatory effort.Annual Commercial License Fee:
After incorporation, to maintain the company’s legal status, an annual license renewal fee is required. ADGM’s annual fees now mirror the registration fees: $5,000 per year for a non-financial company, $2,000 for a retail-only company, and $15,000 for a financial company (Category A). SPVs pay around $1,900 annually.Miscellaneous Fees:
Other costs can include a name reservation fee (if done separately, a small amount) and office rental costs, which are outside the ADGM fees. Also, data protection registration in ADGM has a fee (often around $300 for most companies, scaled by employee count or data risk tier). If a Company Service Provider is used (for SPVs or foundations), the CSP will charge service fees separately. Professional fees for legal advisors or corporate service firms would be additional as well, but those vary by provider.Capital Requirements:
For most ordinary private companies in ADGM, there is no minimum share capital required by law. The founders can choose any amount of share capital as a nominal amount that suits the business's needs. This flexibility is designed to ease doing business. Public companies in ADGM must have at least $50,000 in issued share capital, as this is a legal minimum set by the ADGM Companies Regulation Section 701. Certain special entity types have their requirements: for example, a Protected Cell Company (if set up as a public company) would inherently meet the PLC capital requirement; an ADGM Limited Partnership or LLP does not mandate any fixed capital, but partners usually contribute as per the partnership agreement.
ADGM’s updated fee structure reflects its commitment to fostering a business-friendly environment that is both accessible and well-regulated. By offering flat, category-based fees and eliminating share capital-based costs for most entities, ADGM ensures greater predictability and affordability in business planning. Overall, ADGM presents a cost-efficient and transparent platform for entrepreneurs, corporates, and investors seeking to operate in a world-class international financial centre.
WINDING UP AND INSOLVENCY PROCEDURES IN ADGM
Businesses may need to be wound up or restructured. ADGM has a modern insolvency and winding-up regime governed by the ADGM Company Regulation 2020 & the Insolvency Regulations 2022. The framework is robust and largely modelled on UK insolvency law, with certain innovations.
Voluntary Striking Off:
If a company in ADGM has no assets or liabilities and simply wishes to close, ADGM provides a simple voluntary strike-off process. The company’s members can pass a resolution and apply to the Registrar to strike the company off the register (given that the company is not engaged in legal proceedings and has cleared any debts). This is an administrative dissolution (not a formal liquidation. As per section 174 of the Insolvency Regulations 2022, a company may be wound up voluntarily in circumstances provided in the articles of association of the company.Members’ Voluntary Winding Up:
Chapter 3 of the Insolvency Regulations 2022 deals with members’ voluntary winding up. If the company is solvent and can pay its debts in full, it may undergo a Members’ Voluntary Liquidation (MVL). This requires the directors to make a Declaration of Solvency and the shareholders to pass a special resolution to wind up the company. A liquidator who must be a registered insolvency practitioner in ADGM is then appointed to collect assets, pay off liabilities, and distribute any surplus to the shareholders. The liquidator must notify the Registrar and advertise the liquidation. Once the affairs are wound up, the company is dissolved and removed from the register.Creditors’ Voluntary Liquidation:
Chapter 4 of the Insolvency Regulations 2022 deals with creditors’ voluntary winding up. If the company’s directors believe it cannot pay its debts (insolvent), the shareholders can still initiate a voluntary liquidation, but it becomes a Creditors’ Voluntary Liquidation (CVL). In a CVL, after the shareholders resolve to wind up, a meeting of creditors is convened where creditors can nominate a liquidator and perhaps a committee of inspection. The liquidator’s role is to realise assets and distribute them to creditors according to their priority. ADGM Insolvency Regulations provide that, in a CVL, the directors must prepare a Statement of Affairs for creditors listing assets and liabilities. If, during an MVL, the liquidator finds the company is insolvent, the MVL can convert into a CVL.Compulsory Winding Up:
Chapter 6 of the Insolvency Regulations 2022 deals with compulsory (court) winding up. ADGM companies can be wound up by an order of the ADGM Courts in certain circumstances, akin to a compulsory liquidation. Typical grounds include inability to pay debts (creditors can petition), a resolution of the company that it be wound up by the court, or other just and equitable grounds (e.g. deadlock in management). As per section 206(2), the court shall appoint a liquidator immediately as per the order. Section 207(1) & (2) states that a winding-up order has been made, the Court shall immediately:give notice of the fact to the Company, the petitioner, the Financial Services Regulator (in the case of an Authorised Person or Recognised Body) and any other person represented at the hearing; and
Provide a sealed copy of the order to the liquidator.
The liquidator must, within 7 days, send a copy to the Registrar and also publish a notice of the order in the ADGM.
Cross-border Insolvency:
ADGM signalled its effectiveness as a restructuring hub in the high-profile NMC Health Plc case. NMC, although an Abu Dhabi-based enterprise, migrated its holding company to ADGM to utilise ADGM’s administration process during its insolvency in 2020. ADGM even amended its rules to allow a foreign-incorporated (but solvent) company to continue into ADGM to avail of the administration regime. In NMC’s case, an exception was made to allow a formerly London-listed company to be placed into ADGM administration despite insolvency. This demonstrates ADGM’s flexibility and willingness to accommodate complex cross-border restructurings. ADGM’s Insolvency Regulations 2022 also incorporate the UNCITRAL Model Law on Cross-Border Insolvency, facilitating cooperation with foreign courts in multinational bankruptcies.
The ADGM offers a comprehensive and modern insolvency framework, rooted in international best practices and tailored to the needs of both startups and multinational enterprises. Whether a company is solvent and simply wishes to wind down operations or is facing financial distress and requires creditor coordination or court intervention, ADGM provides structured and transparent procedures. The flexibility between voluntary striking off, members’ or creditors’ voluntary liquidations, and court-supervised winding up ensures businesses can access appropriate mechanisms based on their circumstances. Furthermore, ADGM’s alignment with the UNCITRAL Model Law on Cross-Border Insolvency underlines its growing stature as a credible and effective international restructuring hub, as seen in landmark cases like NMC Health Plc. For businesses operating in or considering ADGM, this framework provides confidence, clarity, and continuity during even the most challenging financial scenarios.
DISPUTE RESOLUTION MECHANISMS IN ADGM
One of the strengths of ADGM is its independent judicial system, which is designed to resolve disputes efficiently and in line with common-law principles.
ADGM Courts:
ADGM has established its court system, consisting of a Court of First Instance and a Court of Appeal. ADGM Courts are separate from the Abu Dhabi Emirate’s local courts. They are English-language courts with judges drawn from leading common law jurisdictions (including England & Wales, Australia, etc.). ADGM Courts have jurisdiction over civil and commercial matters arising within ADGM or relating to ADGM companies. This means that disputes involving ADGM-registered companies or contracts that stipulate ADGM jurisdiction can be heard in ADGM Courts. The court procedures are governed by ADGM Court Regulations and largely mirror English civil procedure (with detailed court rules akin to the English CPR). Importantly, judgments of ADGM Courts are final within the ADGM system, with the ADGM Court of Appeal being the highest court; there is no further appeal into the UAE federal system, due to ADGM’s constitutional setup.
ADGM has taken steps to ensure that ADGM Court judgments are enforceable outside ADGM. In 2018, ADGM Courts signed a Memorandum of Understanding (MoU) with the Abu Dhabi Judicial Department (ADJD) to enable mutual recognition and enforcement of judgments between ADGM Courts and Abu Dhabi mainland courts. This MoU means an ADGM judgment can be enforced in Abu Dhabi (and by extension other UAE courts through the normal inter-emirate enforcement channels) without re-litigation on the merits. Recent amendments to Abu Dhabi’s law (the ADGM Founding Law, via Abu Dhabi Law No. 12 of 2020) codified the reciprocal enforcement of ADGM and Abu Dhabi court judgments, giving even greater certainty. ADGM Courts have also signed MoUs with Dubai Courts and other international courts. For example, an MoU with Dubai Courts allows direct enforcement of ADGM judgments in Dubai and vice versa without re-examining the substance.
ADGM permits parties to choose the governing law of their contracts freely. Many ADGM companies will opt for English law or ADGM law (which is substantially similar to English common law in many areas) for their contracts. ADGM Courts will apply the chosen governing law. Notably, ADGM law itself incorporates a wide body of English common law and equity as a source of law in the absence of specific ADGM legislation. This means ADGM Courts can apply precedents from English courts as persuasive. For parties that prefer local law, ADGM has its contract law and other statutes as well.ADGM Arbitration Centre:
ADGM is very supportive of arbitration as an alternative dispute resolution mechanism. It enacted the ADGM Arbitration Regulations 2015, a comprehensive arbitration law based on the UNCITRAL Model Law. These Regulations ensure that arbitration agreements are upheld and arbitral awards are enforceable through the ADGM Courts with minimal court intervention. They provide modern features like interim measures, confidentiality, and the ability to award costs, etc. ADGM established the ADGM Arbitration Centre, a physical facility with hearing rooms and technology to support arbitral proceedings. Notably, the International Chamber of Commerce (ICC) has a permanent presence at the ADGM Arbitration Centre, meaning parties can conduct ICC arbitrations seated in ADGM. Parties can choose ADGM as the seat of arbitration even if they are not ADGM companies; the law expressly allows parties by agreement to opt into ADGM jurisdiction or seat their arbitration in ADGM. The ADGM Courts serve as the curial courts for arbitrations seated in ADGM, competent to hear applications such as the appointment of arbitrators, interim relief, or enforcement of awards. ADGM’s arbitration law is known for certain innovations, for example, it explicitly empowers ADGM Courts to issue interim measures in support of arbitrations, including against third parties, and to consolidate arbitrations in some cases.ADGM Mediation:
ADGM also encourages mediation. The ADGM Courts have an ADGM Court-annexed mediation service operated in conjunction with the ICC in ADGM. Parties to disputes are free to mediate, and the courts can recognise settlement agreements or issue consent judgments if needed.
An ADGM company can have in its contracts a clause stating that disputes will be resolved either by ADGM Courts or by arbitration seated in ADGM. Either way, the dispute would be handled in English, under common law procedures, which international investors find familiar. For instance, a shareholder agreement between two ADGM companies might say that any dispute goes to the ADGM Court. If one party later fails to comply with the judgment, the other can enforce it in Abu Dhabi onshore courts directly.
CONCLUSION
Establishing a company in ADGM offers businesses a sophisticated legal environment with flexible company structures, straightforward incorporation procedures, and a range of licensing options to suit different ventures. The use of common law, independent courts, and the English language for legislation and proceedings makes ADGM especially attractive to international investors and family offices. We have seen that ADGM’s regulations, from the Companies Regulations 2020to the Insolvency Regulations 2022, provide a comprehensive framework covering the entire lifecycle of a company from formation, through operation and compliance, to dissolution or insolvency if needed.
