CORPORATE SERVICESADGM SPV & DIFC SPC

Abu Dhabi Global Market is an international financial center for local, regional and international institutions. ADGM Free Zone is regulated by three independent authorities (the Registration Authority, the Financial Services Regulatory Authority (FSRA) and ADGM Courts) to ensure that ADGM center operates in line with best international practice recognized by major financial centers.

ADGM Free zone incorporates various entities providing financial or non-financial services.
Special Purpose Vehicle (SPV) model was drawn on the best available structures internationally and therefore offers a number of different vehicles in which to fulfil narrow, specific or temporary corporate objectives.

In addition to the standard SPVs, ADGM has also introduced a new Restricted Scope Company structure: Restricted Scope Company (RSC). An ADGM RSC is a company (usually a Private Limited Company) with the limited public disclosure requirement. RSCs are particularly useful for Single Family Offices or SPVs established to hold investments or own assets.

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Key Features and Benefits of ADGM SPVs:

  • Benefit of UAE Double tax conventions
  • They are so-called “exempt” structures and thus do not fall under the direct supervision of the Financial Services Regulator.
  • No restrictions on nationality of ownership
  • No restrictions on the number of shareholders.
  • 1 shareholder and 1 director permitted.
  • Corporate directors are permitted.
  • No secretary requirements.
  • No minimum share capital.
  • Different classes of shares possible.
  • An ADGM SPV could morph into an ADGM Holding Company whichis typically a parent corporation, existing as a Private Limited Company (Ltd) and can own other companies (subsidiaries), property such as real estate, patents, trademarks, stocks and other assets, wherever they may be.
  • A Foreign IBC could morph into an ADGM SPV.
  • The Registration Authority will register charges against the name of the company in ADGM and make the register of charges available to the public.

Key Uses:

  • Single family offices
  • Holding structure – wrapper and consolidation vehicle
  • Availing Tax Conventions benefits
  • Proprietary investment
  • Securing the control of underlying mainland companies
  • Securitization- asset based securities
  • Fund raising and Trustee structuring
  • Regional Head Quarters
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Case Study:

Strengthen the investor’s control over the 51%local shareholding of his mainland LLC business – Uses of ADGM SPVto establish a common law corporate entities layer.

Current Business Structuring

https://wincoreadvisory.com/wp-content/uploads/2020/02/Picture1.jpg

New Business Structuring Or Restructuring

First degree of structuring – More confidential and sophisticated
structuring are possible.
https://wincoreadvisory.com/wp-content/uploads/2020/02/ADGM-SPV-2.jpg

Outcome:

  • The local and foreign shareholdings are uplifted from a dual sharia law and civil law jurisdiction to a common law jurisdiction:
  • allowing more flexibility to gain a higher investor’s protection while the ultimate local shareholding complies with the mainland regulatory framework;
  • granting access to more sophisticated contractual and structuring environment;
  • Subjecting the resolution of conflicts to a common law jurisdiction, court and arbitration rules.
  • Exiting from the heavy legalisation and notarisation costs (unlike foreign IBC used or corporate actions are executed).

Wincore Advisory Group’s structuring team will advise you on the best structuring to establish your UAE presence and reach your objectives whilst maintaining the highest degree of control over your business and confidentiality. Wincore Advisory Group’s structuring team will advise you also on related capital raising planning, tax structuring and succession planning in a Sharia Law environment.

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DIFC SPC

DIFC provides a 40 year guarantee of zero taxes on corporate income and profits, enhanced by the UAE’s wide network of double taxation avoidance treaties with regulators and central banks.

DIFC’s legal system and courts follow a Common Law framework administered by an independent and highly regarded regulator- the Dubai Financial Services Authority (DFSA) grants licenses and regulates the activities of financial services conducted through DIFC –  and adjudicated by an equally respected court system.

DIFC hosts a diverse client base ranging from regulated firms, authorized market institutions, designated non-financial businesses to non-regulated businesses and exempt companies.

Key Features and Benefits

  • DIFC Companies Law of 2009 (the “Companies Law”).
  • DIFC Special Purpose Company Regulations of 2008 (the “SPC Regulations”).
  • They are so-called “exempt” structures and thus do not fall under the direct supervision of the Financial Services Regulator.
  • Exempt from a number of key provisions of the Companies Law which apply to an ordinary Company Limited by Shares.
  • Subject to certain restrictions and designed to be used for structured finance transactions.

Key Uses

Articles of association of the SPC must be restricted to performing only “Exempt Activities” as following ones:

  • Acquisition by way of leasing, title transfer, and risk transfer or otherwise,
  • Holding and the disposal of any tangible or intangible asset, including but not limited to receivables and shares in connection with and for the purpose of a transaction.
  • Obtaining of any type of financing either banking or capital markets,
  • Granting of any type of security interest over its assets,
  • Providing of any indemnity or similar support for the benefit of its shareholders or any of its subsidiaries,
  • Entering into any type of hedging arrangements, in connection with and for the purpose of a transaction.
  • Acting as trustee or agent for any participant in the transaction.
  • Financing of a transaction or another SPC.
  • Ancillary activities which are related to the activities mentioned above.
  • Any other activity approved in writing by the DIFC Registrar of Companies.

Restrictions of Uses a SPC

An SPC is restricted from the following:

  • to conduct “Financial Services” unless authorized by the DFSA.
  • to have more than three shareholders.
  • to operate a trading business
  • to be the general partner of an Investment Partnership
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Case Study:

Strengthen the investor’s control over the 51%local shareholding of his mainland LLC business – Uses of ADIFC SPCto establish a common law corporate entities layer.

Current Business Structuring

https://wincoreadvisory.com/wp-content/uploads/2020/02/Picture1.jpg

New Business Structuring Or Restructuring

First degree of structuring – More confidential and sophisticated
structuring are possible.
https://wincoreadvisory.com/wp-content/uploads/2020/02/DIFC-SPC2.jpg

Outcome:

  • The local and foreign shareholdings are uplifted from a dual sharia law and civil law jurisdiction to a common law jurisdiction:
  • allowing more flexibility to gain a higher investor’s protection while the ultimate local shareholding complies with the mainland regulatory framework;
  • granting access to more sophisticated contractual and structuring environment;
  • Subjecting the resolution of conflicts to a common law jurisdiction, court and arbitration rules.
  • Exiting from the heavy legalisation and notarisation costs (unlike foreign IBC used or corporate actions are executed).

Wincore Advisory Group’s structuring team will advise you on the best structuring to establish your UAE presence and reach your objectives whilst maintaining the highest degree of control over your business and confidentiality. Wincore Advisory Group’s structuring team will advise you also on related capital raising planning, tax structuring and succession planning in a Sharia Law environment.

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Start a conversation

Mohammed Rahali

Wincore Advisory Group Managing Partner
M: +971 (0) 55 138 9591
Email

Maricar Caluracan

Wincore Advisory Group Senior Business Advisor
M : +971 (0) 58 105 1553
Email

Chinwe Azikiwe

Wincore Advisory Group Senior Business Advisor
M: +971 (0) 50 630 0821
Email

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