The Abu Dhabi Global Market (ADGM) has announced a significant enhancement to its Special Purpose Vehicle (SPV) regime by removing the longstanding nexus requirement. Previously, applicants were required to demonstrate a connection to ADGM, the UAE, or the wider GCC through ownership, assets, or other qualifying criteria before establishing an ADGM SPV.
The removal of this requirement substantially broadens access to the ADGM SPV regime and reinforces ADGM's position as a leading international common law jurisdiction for holding and investment structures.
For global investors, family offices, founders and corporate groups, the question is no longer whether they qualify for an ADGM SPV, but whether ADGM is the most suitable jurisdiction for their structuring objectives.
This development aligns with the UAE's continued evolution as a global hub for investment, family offices and cross-border structuring.
The Authorised Signatory must generally:
While the removal of nexus has opened the ADGM SPV regime to a global audience, international clients that do not have a UAE-resident manager, authorised representative, or suitable local individual may still need to make additional arrangements to satisfy the regulatory requirements.
Accordingly, although eligibility barriers have been reduced, a degree of local presence continues to be embedded within the ADGM framework.
Both jurisdictions offer:
As a result, for global investors, founders and family offices that do not yet have an established UAE presence, the DIFC may continue to represent a more straightforward entry point into the UAE's common law structuring ecosystem.
Conversely, where authorised signatory arrangements are already available, the removal of the nexus requirement makes the ADGM SPV significantly more accessible than before.
Another practical consideration is real estate ownership. Both ADGM SPVs and eligible DIFC entities can be used to hold Dubai real estate, subject to the applicable requirements and approvals of the Dubai Land Department (DLD). Accordingly, the ability to hold Dubai property is generally not a differentiating factor when evaluating the two structures. Instead, factors such as governance requirements, administration, succession planning objectives and the continuing ADGM authorised signatory requirement are often more relevant to the structuring decision.
Ultimately, the choice between ADGM and DIFC should be driven by the client's specific governance objectives, ownership structure, investor requirements, banking considerations and long-term strategic plans rather than eligibility requirements alone.
While applicants no longer need to demonstrate a UAE or GCC connection, key governance requirements remain in place, including the appointment of a qualifying UAE resident authorised signatory and, in many cases, an ADGM-licensed Company Service Provider.
For international clients evaluating UAE holding structures, this development creates greater flexibility and choice. However, a careful assessment of both ADGM and DIFC remains essential to ensure the selected jurisdiction aligns with the client's ownership, governance and operational requirements.
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The removal of this requirement substantially broadens access to the ADGM SPV regime and reinforces ADGM's position as a leading international common law jurisdiction for holding and investment structures.
For global investors, family offices, founders and corporate groups, the question is no longer whether they qualify for an ADGM SPV, but whether ADGM is the most suitable jurisdiction for their structuring objectives.
What has changed in the ADGM SPV framework?
Under the revised framework:- Applicants no longer need to demonstrate an existing connection to ADGM, the UAE, or the GCC
- Shareholders may be entirely non-UAE and non-GCC residents
- The underlying holding assets held by the SPV may be located anywhere in the world
- International founders, global investors, family offices and corporate groups can now access the ADGM SPV regime without satisfying regional ownership or asset-based tests
Why ADGM's nexus removal matters for international investors
ADGM SPVs have long been recognised as flexible and efficient holding vehicles used to:- Hold shares in operating businesses
- Own intellectual property
- Hold investment portfolios
- Ring-fence holding assets and liabilities
- Facilitate family wealth and succession structures
- Support joint venture and co-investment arrangements
This development aligns with the UAE's continued evolution as a global hub for investment, family offices and cross-border structuring.
What governance requirements remain for ADGM SPVs
While the removal of the nexus requirement is a welcome development, it should not be interpreted as the removal of all local requirements.UAE authorised signatory requirement remains
Every ADGM entity must continue to appoint at least one qualifying Authorised Signatory.The Authorised Signatory must generally:
- Be a UAE resident or GCC national;
- Be of good standing; and
- Successfully complete the relevant security clearance requirements.
ADGM company service provider: ongoing requirements for SPVs
Unless exempt, ADGM SPVs must also continue to appoint an ADGM-licensed Company Service Provider (CSP) to provide registered office facilities and support ongoing regulatory compliance.A practical consideration for international clients
From a practical perspective, the continued requirement to appoint a UAE resident authorised signatory remains an important factor when selecting a jurisdiction.While the removal of nexus has opened the ADGM SPV regime to a global audience, international clients that do not have a UAE-resident manager, authorised representative, or suitable local individual may still need to make additional arrangements to satisfy the regulatory requirements.
Accordingly, although eligibility barriers have been reduced, a degree of local presence continues to be embedded within the ADGM framework.
ADGM SPV vs DIFC prescribed company
The recent ADGM changes are particularly noteworthy when viewed alongside the continued growth of the DIFC Prescribed Company regime.Both jurisdictions offer:
- Common law legal frameworks
- Internationally recognised financial centres
- Flexible holding company structures
- Robust governance frameworks
- Sophisticated regulatory environments
As a result, for global investors, founders and family offices that do not yet have an established UAE presence, the DIFC may continue to represent a more straightforward entry point into the UAE's common law structuring ecosystem.
Conversely, where authorised signatory arrangements are already available, the removal of the nexus requirement makes the ADGM SPV significantly more accessible than before.
Another practical consideration is real estate ownership. Both ADGM SPVs and eligible DIFC entities can be used to hold Dubai real estate, subject to the applicable requirements and approvals of the Dubai Land Department (DLD). Accordingly, the ability to hold Dubai property is generally not a differentiating factor when evaluating the two structures. Instead, factors such as governance requirements, administration, succession planning objectives and the continuing ADGM authorised signatory requirement are often more relevant to the structuring decision.
Ultimately, the choice between ADGM and DIFC should be driven by the client's specific governance objectives, ownership structure, investor requirements, banking considerations and long-term strategic plans rather than eligibility requirements alone.
Conclusion
The removal of the nexus requirement marks an important milestone in the evolution of the ADGM SPV regime and significantly expands access for international investors, family offices and corporate groups.While applicants no longer need to demonstrate a UAE or GCC connection, key governance requirements remain in place, including the appointment of a qualifying UAE resident authorised signatory and, in many cases, an ADGM-licensed Company Service Provider.
For international clients evaluating UAE holding structures, this development creates greater flexibility and choice. However, a careful assessment of both ADGM and DIFC remains essential to ensure the selected jurisdiction aligns with the client's ownership, governance and operational requirements.
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