What is an ADGM Representative Office?
The ADGM offers a low-cost alternative for firms that wish to explore the market. It allows for the marketing of one or more financial services or financial products which are offered in a jurisdiction other than the ADGM. These products are usually of a head office that is based in a different jurisdiction.
Here are some specific advantages of establishing in the Abu Dhabi Global Market:
LEGAL AND REGULATORY FRAMEWORK:
- Legal framework supports cross-border activities
- 100% foreign ownership permitted
- No restriction on foreign talent or employees
- No restrictions on capital repatriation
- Zero tax for 50 years on profits, capital or assets from 2004
- Zero tax on employee income
- Well regarded, independent regulator
- Independent, English-speaking, common law judicial system
- Distinct from the UAE legal system
- Risk-based regulatory approach
- Central to regional deal making
- High concentration of international firms, investment funds, wealth management firms, banks, and financial institutions
- World-class regional and international law and auditing firms, and other professional services
- A growing fund domicile in the region
- Management offices, holding companies and family offices are located closer to the assets they own or manage
- The Middle East, Africa and South Asia (MEASA) is increasingly the centre of gravity for the global economy
- The UAE plays a central role in the growing South-South trade, principally between Asia and Africa
- Well-positioned to harness the potential of emerging markets.
What are the advantages of setting up an ADGM Representative Office?
Obtaining authorisations to conduct financial activities from the ADGM involves a detailed and structured process. It usually takes anywhere between 4-6 months to obtain a license, and an investment of substantial capital, leasing of suitable office space and other costs such as licensing and legal structuring at the ADGM Registration Authority. In short, one has to be sure of the feasibility of such an office, since it involves the investment of considerable monies and time.
Some firms, especially those that are exploring the UAE as a new jurisdiction, or are unsure of the potential of their products in the market, may prefer setting up a representative office in the ADGM, to begin with. The authorisation process, although processed by the FSRA, is relatively simplified keeping in mind the lower risks associated with operating such a setup. Costs for licensing are significantly lower as well.
Representative office setups may also be preferred in cases where firms just want to promote or market their products, and not engage in client-facing activities.
What activities can be performed by a ADGM Representative Office?
The Representative Office in the ADGM cannot engage in client-facing activities. It cannot on- board clients, nor carry out any services other that marketing and promotion of the products or services of its parent.
Marketing activities involve the following:
(a) providing information on the financial products or financial services of its parent company;
(b) engaging in promotions in relation to (a);
(c) making introductions or referrals in connection with the offer of financial services or financial products.
a Representative Office cannot represent anyone other than itself, its parent firm or a member of its Group.
ADGM Representative offices:
1. Cannot market the financial products or services of a firm that is not part of its group.
2. Cannot provide advice in regards to investments, credit or insurance.
3. Cannot have clients
4. Cannot assist in completion of application forms for account opening or financial products
5. Cannot market highly-leveraged products
Are there any mandatory appointments for a Representative Office in the ADGM?
Every Representative Office in the ADGM has to appoint a Principal Representative, who acts as the liaison between the parent company and the FSRA. The Principal Representative has to be resident in the UAE.
Are there any rules for naming a ADGM Representative Office?
A Representative Office must be a branch and so its legal name will be the same as its Head Office For example, a Representative Office of Disha Capital Limited would have to use the trading name "Disha Capital (ADGM Representative Office)”.
A Representative Office in the ADGM is meant to be an operational entity. These entities can apply for visas for their staff and their families.
The Government Services Office in the ADGM is dedicated to providing a wide range of administrative services, and one of this is the issue and renewal of employment visas. The maximum number of visas you can apply for will depend on both the type of business you plan on setting up as well as the size of the premises you lease in the ADGM.
Setting up an AGDM Holding Company involves the following interactions:
Financial Services Regulatory Authority (FSRA):
Application fee – US$ 3,000
Annual fee – US$ 3,000
Registration Authority (RA):
The RA helps to set up the legal structure of the ADGM Firm. In this case, it will be a Branch Company. The costs for setting up such a company are:
Application for reserving a name: US$ 200
Application for Incorporation of a Private Company Limited by Shares: US$ 1,500
Commercial License on Incorporation: US$ 4,000 (annual fee)
Business Activity fees: US$ 9,000 (annual fee)
The data protection notification is part of the process of registering a new entity in the ADGM. The costs involved are as follows:
Registration - US$ 300
Annual renewal – US$ 100
Every entity registered in the ADGM is required to lease a physical office. You can choose from business center options, or physical spaces within the ADGM.
Here is an indication of the prevailing rates:
Business Centre – from a one-desk office at US$ 19,000.
Fitted Offices – from US$ 55 per square foot.
Establishment Card Application – US$ 273
E-channel – US$ 1,100 (one-time)
E-channel deposit – US$ 1,360
Visas (per visa) – from US$ 1,500
We provide turnkey services for setting up representative office in the ADGM. From fintech consulting, to assistance in authorisations, to assistance in preparation of the legal documentation, 10 Leaves helps you navigate the FSRA Rulebook and submit an application that is comprehensive, complete and compliant.
• Preparation of all policies, processes and manuals required;
• Provision of Outsourced Compliance Officer and Outsourced Finance Officer services;
• Finalising the legal structure, including holding company setup and customisation of Memorandums; and
• Finalisation of leased space, bank account opening and obtaining Financial Services Permissions.
Contact us To Discuss More About Representative Office In The ADGM