Why incorporate in ADGM rather than somewhere else
The case for ADGM is legal rather than fiscal. Its companies regime is modelled on English law, its courts apply English common law and equity directly, and proceedings are in English. For a party used to that system, everything is where it expects to find it.
That matters most at the two moments a structure is tested. When a dispute arises, the remedies available — unfair prejudice, derivative claims, specific performance, injunctive and freezing relief — behave as they do in London rather than requiring translation into an unfamiliar framework. And when an international counterparty or investor conducts diligence, an ADGM company presents a constitution and a governance record they can read.
Foreign ownership is unrestricted and no local shareholder is required, which removes the structuring that used to dominate UAE incorporation. Judgments of the ADGM Courts enforce onshore through the established channel, so the jurisdiction is not an island.
Which vehicle — company, SPV, or branch
Three routes exist and they are chosen badly more often than not.
A private company limited by shares is the general-purpose vehicle: it can trade, employ, lease premises and hold a commercial licence. A Special Purpose Vehicle is a lighter regime designed for holding assets — shares, real estate, receivables, aircraft — with lower cost and reduced substance requirements, and correspondingly real restrictions on conducting business, employing staff and occupying premises. A branch of a foreign company has no separate legal personality, which means the parent carries the liability directly.
The recurring mistake is selecting the SPV on price. It is the right answer for a holding function and the wrong one for anything that will trade, and discovering that mid-transaction means restructuring under time pressure.
Formation, substance, and what is actually required
Incorporation requires a name, the articles, the registered office, directors and shareholders, and the beneficial ownership disclosure. ADGM operates a registered-office and corporate-services model, and the standard of information required on ultimate beneficial owners is meaningful rather than formal.
Substance deserves a clear answer at the outset rather than an assumption. What ADGM requires of a given vehicle, what the UAE's economic substance rules require of the activity, and what a foreign tax authority will expect of a structure claiming residence here are three separate questions. Structures built on the first alone are the ones that come apart.
Banking is the practical gate. Account opening for an ADGM entity is workable but slower than clients expect, and the questions on source of funds and control are searching. It is worth beginning in parallel with incorporation rather than after it.
Governance, directors' duties and the constitution
Directors of an ADGM company owe duties modelled on English law: to act within powers, to promote the success of the company, to exercise independent judgement and reasonable care, to avoid conflicts and to declare interests. They are owed to the company, not to the shareholder who appointed the director — a distinction that becomes sharp in any joint venture.
The articles can be tailored considerably, and the choice between a bespoke constitution and the model articles is worth making deliberately. Default provisions on transfer, pre-emption, decision thresholds and deadlock are adequate for a wholly-owned subsidiary and rarely adequate for a joint venture.
Records matter here more than in jurisdictions where they are treated as formality. Registers, minutes and filings are the evidence in any later dispute, and a company that cannot produce a clean record starts a governance argument at a disadvantage.
Shareholders' agreements that will actually be enforced
Because ADGM applies English law, a shareholders' agreement drafted to English standards will be construed and enforced as drafted. That makes it worth the drafting, which is not equally true in every jurisdiction, and it makes the standard provisions do real work.
Four earn their place. Reserved matters, defining what cannot be done without the minority. Transfer provisions — pre-emption, tag and drag — which determine whether a shareholder can be locked in or forced out. Deadlock machinery, without which a 50/50 company simply stops. And an exit mechanism with a valuation basis stated, because valuation is where these disputes actually end.
The agreement and the articles must be read together and made consistent. Where they conflict, the argument is expensive and entirely avoidable.
Commercial contracts under ADGM law
ADGM contract law is English contract law, with the doctrines that implies: offer and acceptance, consideration, the approach to implied terms, remoteness of damage, penalties and liquidated damages, and the construction of exclusion clauses against the party relying on them.
For parties drafting from English or international precedent that is a considerable convenience — the precedent works as intended rather than requiring adaptation to a civil-code framework. Specific performance and injunctive relief are available in principle, which changes the negotiating value of a contractual obligation.
Two provisions deserve deliberate thought in every ADGM contract. The governing law and the jurisdiction or arbitration clause, which are distinct choices and frequently conflated. And whether the counterparty's assets are actually within reach of the forum chosen, because a favourable judgment against a party whose assets sit elsewhere is a starting point rather than a result.
Transactions, restructuring and exit
ADGM supports the transaction mechanics a commercial party expects: share and asset sales, continuation into and out of the jurisdiction, mergers, and solvent liquidation.
Continuation is the feature most often overlooked. An existing foreign company can redomicile into ADGM while preserving legal identity, which keeps contracts, licences and bank accounts intact — materially simpler than transferring assets into a new vehicle and unwinding the old one.
On exit, a solvent liquidation requires the directors to address liabilities properly and is a process rather than an event. Allowing a company to lapse is not a liquidation: it leaves assets ownerless and liabilities unresolved, and restoration is the only route back.
A reported matter
A published decision of the ADGM Court of First Instance in which our team acted. The parties are anonymised; the judgment itself is public. Read the case note.
Primary sources
The law and rules this page relies on. Links go to the issuing court, tribunal or legislator.
Frequently asked questions
Should we incorporate a company or an SPV?
An SPV is a lighter, cheaper regime built for holding assets, with real restrictions on trading, employing staff and occupying premises. A private company limited by shares does all of those. Choosing the SPV on price and then needing to trade means restructuring under time pressure, usually mid-transaction.
Can we own an ADGM company 100% from abroad?
Yes. Foreign ownership is unrestricted and no local shareholder is required, which removes the structuring that used to dominate UAE incorporation.
What law governs an ADGM company?
English common law, applied in English by the ADGM Courts. The companies regime is modelled on English law, and remedies behave as they do in London — unfair prejudice, derivative claims, specific performance, injunctive and freezing relief.
What substance do we actually need?
Three separate questions, and structures built on only the first come apart: what ADGM requires of the vehicle, what UAE economic substance rules require of the activity, and what a foreign tax authority will expect of a structure claiming residence here. Answer all three at the outset.
How long does bank account opening take?
Longer than clients expect, with searching questions on source of funds and control. Start it in parallel with incorporation rather than after it — it is the practical gate on the whole timetable.
Do directors owe duties to the shareholder who appointed them?
No — to the company. That distinction becomes sharp in any joint venture, and a director voting the appointing shareholder's interest against the company's is the most common route to personal exposure.
Are the model articles good enough?
For a wholly-owned subsidiary, usually. For a joint venture, rarely. Default provisions on transfer, pre-emption, decision thresholds and deadlock are exactly the ones a JV needs tailored, and the articles must be made consistent with the shareholders' agreement or the conflict becomes an expensive argument.
Is a shareholders' agreement worth the cost here?
More than in most jurisdictions. Because ADGM applies English law, an agreement drafted to English standards will be construed and enforced as drafted — so reserved matters, transfer provisions, deadlock machinery and a stated valuation basis all do real work.
Can we move an existing foreign company into ADGM?
Yes, by continuation, which preserves legal identity so contracts, licences and bank accounts stay intact. That is materially simpler than transferring assets into a new vehicle and unwinding the old one.
Will an ADGM judgment be enforceable onshore?
Yes, through the established channel between the ADGM Courts and the onshore courts. The jurisdiction is not an island, which is part of why the structure works.