Fund managers in Abu Dhabi using special purpose vehicles (SPVs) will have to demonstrate they have a significant presence in the UAE or else be licensed as a corporate service provider (CSP) as a result of new legislation.
The CSP framework has been introduced by the Abu Dhabi Global Market (ADGM) and will take effect as of April 12.
The legislation has been introduced to bring the ADGM in line with global standards around the use of SPVs and foundations.
All existing non-exempt SPVs that have not engaged with a CSP either prior to or post-incorporation, are obliged to appoint a CSP within 12 months of April 12 or by their next commercial licence renewal date, whichever is earlier.
All new non-exempt SPVs will need to appoint a CSP prior to incorporation by July 12, 2021.
The measures have been largely welcomed by the market, said Omid Arashan, co-head of corporate solutions, Abu Dhabi at Apex Corporate Services, Middle East, speaking to Funds Global Mena.
“We believe it is a commercially balanced and proportionate initiative which we expect to be administered effectively and efficiently by the ADGM registration authority,” said Arashan.
The move also positions ADGM as a leading jurisdiction in the UAE in terms of oversight for company services, said Arashan.
“This approach by ADGM is undoubtedly a move in the right direction in line with other well regarded global jurisdictions hence other markets and international financial hubs will be monitoring this development and many such as the DIFC may soon follow suit,” he added.
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