A new holding companies regime launched in Abu Dhabi at the end of last month has already attracted more than 50 sign-ups, it has emerged – with some of the strongest interest stemming from local and global corporates.
Put into force on 24 January, the Abu Dhabi Global Market Special Purpose Vehicles (ADGM SPV) scheme enables approved parties to set up SPV outfits in the ADGM financial free zone.
As with similar frameworks in other parts of the world, those SPVs can then be used to retain financial assets dedicated to specific, regional projects.
Since the platform opened, there has been strong groundswell of interest from corporates in the aviation and shipping sectors, as well as technology firms and developers of intellectual property.
In a statement to mark the successful launch of the scheme, ADGM noted that the platform is underpinned by an international legal and regulatory structure complete with independent courts.
As well as benefiting from high-quality legislation and experienced, common-law judges, SPV owners can take advantage of a favourable tax environment based upon the United Arab Emirates’ (UAE’s) network of double-taxation treaties.
ADGM set up its SPV regime under the English model. As such, the platform is based upon the standard Companies Regulations, rather than an entirely new set of rules – providing consistency across the whole range of corporate vehicles.
In addition, ADGM permits agents or corporate service providers to establish and manage the new entities and provide their registered office addresses. This eliminates the need for SPVs to have physical premises.
Shirish Bhide – head of wholesale and international banking at First Gulf Bank (FGB) – highlighted the regime’s importance to aviation players, saying: “FGB is extremely proud to have assisted ADGM in its journey of becoming a key player in the Middle East for aircraft SPVs.
“[These will be used] on lease arrangements to leasing companies and airlines around the world – competing with the likes of Dublin and other offshore entities.”
He added: “FGB aims to partner with ADGM in its future growth by promoting its services through its aircraft financing business globally. We also look forward to working with ADGM in executing complex and innovative transactions that help ADGM become a promoter of sustainable growth in Abu Dhabi and UAE.”
Chad Fox, managing director of technology-start-ups advisory firm Disruptive.Legal, hailed the regime as “an innovative legal development” that has been “desperately needed” in the UAE and Middle East.
He noted: “The flexibility, robust corporate laws and the direct access to the ADGM courts are just some of the reasons that the ADGM SPV regime is likely to become the ‘go-to’ holding company regime in the region. We are very excited to see the progression of the regime and have already seen its benefits to the technology sector.”