The Abu Dhabi Global Market (ADGM) has introduced a new regulatory framework for the appointment of company service providers (CSPs). The regulations require special purpose vehicles (SPVs) and foundations to appoint an ADGM-licenced CSP.
The regulations are legislated as amendments to the jurisdiction’s Companies Regulations 2020, Commercial Licensing Regulations 2015 and Foundations Regulations 2017. They aim to meet the standards of international best practice by addressing the regulatory and compliance risks of SPVs and foundations without a direct connection to the ADGM being established in the jurisdiction.
Licenced CSPs must now comply with various obligations, including maintaining the records of the SPVs and foundations that appoint them, acting as their registered office provider and making all filings to the Registration Authority of the ADGM on their behalf.
SPVs and foundations operating in the ADGM that were incorporated or registered by 17 March 2021 must appoint a licenced CSP by 11 April 2022, or the renewal date of their next commercial licence. For those incorporated or registered by 12 April 2021, a licenced CSP must be appointed before their first commercial licence renewal. All new SPVs and foundations after 12 April must appoint a licenced CSP immediately.
Certain exemptions apply: SPVs do not need to comply if they are subsidiaries of a person or entity already exempt from needing a licence to operate in the ADGM or a person or entity authorised to undertake regulated activity in the ADGM. Similarly, subsidiaries of a person or entity licenced or regulated by the UAE Central Bank or companies whose shares can trade on a regulated market in the UAE are exempt.
Foundations will be exempt if they have substantial resources and personnel in the UAE, as well as adequate governance, policies and procedures.
Any SPVs and foundations that are not exempt but fail to appoint a CSP licenced to operate in the ADGM under the new framework risk being fined, as do CSPs found to be non-compliant.
News Source：【STEP 2021/06/28】