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SPVs in the Abu Dhabi Global Market

SPVs in the Abu Dhabi Global Market

SPVs are mostly private companies – established with purpose of segregating financial and legal risk by ring fencing assets and liabilities.

The Abu Dhabi Global Market’s (ADGM) SPV regime is a simple, flexible, robust, and efficient regime. It offers a quick, easy-to-use and fully digital registration process.

Key Features of SPVs in ADGM

A striking feature of an SPV in the ADGM is the flexibility of shareholding. Unlike the DIFC SPC, which has a strict restriction (3 shareholders), there are no restrictions on the number of shareholders in an ADGM SPV. Coupled with an option to have different classes of shares, the SPV provides a viable option for a range of holding and investment structures.

Other salient features include:

The fee payable to the Registrar in year 1 is US$ 1,600, and US$ 1,200 in subsequent years.

No attestations for corporate documents | Shelf SPVs permitted | No restrictions on nationality of ownership | Minimum of 1 shareholder and 1 director permitted | No minimum share capital | No maximum number of shares

The following main options are available to SPVs:

1. Private Company Limited by Shares – LTD

This would be a standard private limited company, which can also be used as an operational business entity or as a holding company.

2. Restricted Scope Company – RSC

This is a unique ADGM offering which offers limited information disclosure on the public register, essentially a “light touch regime”. However, full disclosures would have to be made to the Registrar. To account for the fact that this less stringent approach could prejudice shareholders and creditors, RSCs may only be incorporated as a subsidiary of a public company, or as a family office.

All ADGM companies are eligible to apply for a Tax Residency Certificate from the Ministry of Finance to avail the UAE’s Double Tax Treaty network. This will be interesting from the tax-structuring point of view, and a good advantage over similar SPV regimes in the region.

SPVs are not required to have dedicated office spaces; however, they would need to maintain a registered address in the centre. This can be done via registered service providers, hence reducing the costs involved.

Bottomline

The SPV regime in the ADGM is much better structured and flexible, as compared to similar regimes in the region. Offering a holding structure with the envelope of an onshore well-regulated environment will provide comfort to regional investors, as well as others who wish to conduct business or hold investments in the region.

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