A Step-by-Step Guide to Understanding ADGM License Categories

ADGM License Categories

An ADGM license is a permit issued by the Abu Dhabi Global Market Regulatory Authority, allowing companies to conduct various regulated activities within the ADGM free zone. These activities may include financial services, professional services, commercial activities, and more. The type of license required depends on the nature of the business and the services it intends to provide. Abu Dhabi Global Market (ADGM) is a financial free zone in the United Arab Emirates that offers a conducive environment for businesses to thrive. But what exactly is an ADGM license categories, and why is it essential for companies looking to establish a presence in this region?

Types of ADGM License Categories

  1. Financial Services Category: This category is suitable for businesses involved in financial activities such as banking, insurance, and asset management.
  2. Non-Financial Services Category: Businesses providing non-financial services such as marketing, consulting, and IT fall under this category.
  3. Regulated Activity Category: Companies engaged in regulated activities like operating a stock exchange or providing investment services fall under this category.
  4. Special Purpose Vehicles (SPVs) Category: This category is for companies that are specifically established for isolated, ring-fenced transactions or projects.

Benefits of Each ADGM Licensing Category

  • The Financial Services Category allows businesses to operate in a regulated environment with access to financial markets.
  • The Non-Financial Services Category provides flexibility for service-based businesses to operate within ADGM.
  • The Regulated Activity Category ensures businesses comply with strict regulatory frameworks to protect investors and maintain market integrity.
  • The SPVs Category offers a specialized structure for companies to undertake specific projects without affecting their overall business activities.

ADGM License Categories

The Financial Services Regulatory Authority, also known as FSRA, considers applications from companies seeking to conduct financial services within the ADGM.

The specific type of business the applicant plans to engage in determines the category of License that is necessary. For instance, a company involved in low-risk activities such as advising or arranging will need a Category 4 License, while a discretionary portfolio manager will require a Category 3C License. A STP broker, operating on a matched principal basis, will require a Category 3A License, whereas a market maker or credit provider will need a Category 2 License. Full-fledged banks that accept deposits fall under the purview of a Category 1 License.

ADGM Capital Requirements

The type of license held determines the necessary base capital. A Category 4 firm must have $10,000, while a Category 3 firm requires $500,000. For Category 2, the amount is $2 million, and for Category 1, it is $10 million.

Activities are classified into 5 main categories:

The license category plays a crucial role in determining the required base capital. For a Category 4 firm, the base capital requirement is $10,000. However, this amount increases to $500,000 for a Category 3 firm, $2 million for a Category 2 firm, and $10 million for a Category 1 firm.

The activities are classified into five main categories:

Category 1 – Banks

Base Capital – $10 million

Activities – Accepting Deposits, Managing a PSIAu

Category 2 – Market maker, provider of credit

Base Capital – $2 million

Activities – Dealing in Investments as Principal, Providing Credit.

Category 3A – Brokerage

Initial Investment – $500,000

Services – Engaging in Investment Transactions as a Matched Principal, Engaging in Investment Transactions as an Agent

Category 3B – Custodian

Initial Investment – $4 million

Services – Offering Custodial Services for a Fund, Serving as a Trustee for a Fund

Category 3C – Asset Manager, Fund Manager

Initial Investment – $250,000

Initial Investment for EF, QIF Managers – $50,000

Services – Managing Assets, Overseeing a Collective Investment Fund, Providing Custodial Services, Managing a PSIAr, Offering Trust Services.

Category 4 – Investment Advisor, Insurance advisor

Base Capital – US$ 10,000

Activities – Facilitating Investment Deals, Credit Arrangement and Advisory, Financial Product Consultation, Custody Arrangement, Insurance Intermediation, Insurance Management, ATS Operation, Fund Administration, Trust Services Provision, Crowdfunding Platform Operation

Category 5 – Islamic Business

Base Capital – US$ 10 million

Activities – Management of Islamic Business Operations.

Advantages of an ADGM License Categories

There are several benefits to obtaining an ADGM license for your business. These include:

  • 100% foreign ownership: Unlike in mainland Abu Dhabi, where businesses are required to have a local sponsor, ADGM allows for 100% foreign ownership of companies.
  • Zero corporate tax: Businesses operating within the ADGM-free zone are exempt from paying corporate tax on their profits.
  • Access to world-class infrastructure: ADGM offers state-of-the-art office spaces, meeting rooms, and networking opportunities for businesses looking to establish a presence in Abu Dhabi.
  • Regulatory certainty: The ADGM has a clear and transparent regulatory framework in place, providing businesses with certainty and peace of mind when operating within the free zone.

Why Choose Us for Your ADGM License Needs?

When it comes to obtaining an ADGM license, you want to work with a team that has the experience, expertise, authority, and trustworthiness to guide you through the process seamlessly. Here are a few reasons why you should choose us for your ADGM license needs:

  1. Experience: Our team has helped numerous businesses secure their ADGM licenses, giving us the knowledge and insight to navigate the regulatory landscape effectively.
  2. Expertise: We are well-versed in the requirements and procedures involved in obtaining an ADGM license, ensuring a smooth and efficient application process.
  3. Authority: With our strong relationships and understanding of the regulatory bodies in the ADGM, we can provide you with the necessary guidance and support to meet all compliance standards.
  4. Trust: Our track record speaks for itself, as we have helped countless businesses successfully obtain their ADGM licenses, earning the trust and confidence of our clients.

Steps to Obtain Your ADGM License with Us:

  1. Initial Consultation: The first step in obtaining your ADGM license with us is to schedule an initial consultation. During this meeting, we will discuss your business needs, objectives, and requirements to determine the most suitable license category for your operations.
  2. Document Preparation: Once we have identified the appropriate license category for your business, our team will assist you in preparing all the necessary documentation and forms required for your ADGM license application.
  3. Submission and Processing: After ensuring that all your documents are in order, we will submit your application to the relevant authorities and follow up closely on its processing. Our team will keep you informed every step of the way, ensuring transparency and efficiency.
  4. Compliance and Approval: Upon approval of your ADGM license, we will guide you through the compliance requirements and ensure that all necessary steps are taken to maintain your license status in good standing.

In conclusion, an ADGM license is a valuable asset for businesses looking to establish a presence in Abu Dhabi and take advantage of the numerous benefits offered by the ADGM free zone. By obtaining an ADGM commercial license, you can enjoy 100% foreign ownership, zero corporate tax, and access to world-class infrastructure and facilities. So why wait? Apply for your ADGM license today and unlock the full potential of your business in Abu Dhabi!

Connect with Neeja Corporate Services

Are you looking to start your company in Dubai but feeling overcome by the registration process? Don’t worry, you’re not alone. Setting up a business in a foreign country can be challenging, but with the right guidance and support, it doesn’t have to be a stressful experience. Neeja’s business setup services offer complete support and serve as a one-stop shop for company setup in Dubai. We provide a wide range of value-added services, such as ADGM license categories applications and VAT registration. Over the years, we have successfully advised many new entrepreneurs to make their business dreams a reality.

To book a free consultation, call on +971 43243031. You can also send a WhatsApp message at +971 50 465 2843. To connect over email, send us your query at [email protected].

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