ADGM licenses are structured to support a wide range of financial and professional activities, ensuring businesses operate within a clear regulatory framework. From banks and market makers to asset managers, advisors, and Islamic finance entities, each license category comes with specific capital requirements and permitted activities. Understanding these categories provides company setup in ADGM with insight into the scope of operations, compliance expectations, and the opportunities available within Abu Dhabi Global Market’s dynamic and well-regulated ecosystem.
Company Setup in ADGM: Key License Categories for Financial and Advisory Businesses
Category 1 License: Banks
The Category 1 License is designed for banks with a minimum capital requirement of US$10 million. This license covers activities such as:
- Accepting deposits
- Managing Payment Service and Investment Accounts (PSIA)
This license is ideal for institutions aiming to operate as full-scale banks within ADGM, offering financial products and services under strict regulatory supervision.
Category 2 License: Market Makers and Credit Providers
Category 2 License targets market makers and credit providers, with a minimum capital of US$2 million. Key activities include:
- Trading as a principal
- Extending credit
This license suits businesses involved in trading and credit provision while ensuring compliance with ADGM’s robust regulatory framework.
Category 3 Licenses: Brokerage, Custodians, and Asset/Fund Managers
ADGM provides specialized Category 3 licenses tailored for various investment activities:
- 3A License (Brokerage) – Minimum capital US$500,000. Activities include dealing in investments on a matched principal basis or acting as an agent.
- 3B License (Custodians) – Minimum capital US$4 million. Activities include providing custody services for funds and acting as a trustee.
- 3C License (Asset and Fund Managers) – Minimum capital US$250,000. Activities include managing assets, overseeing collective investment funds, custodial services, and trust services.
These licenses cater to companies involved in investment management, fund operations, and brokerage services, providing flexibility while adhering to regulatory standards.
Category 4 License: Investment and Insurance Advisors
The Category 4 License is designed for investment and insurance advisors, requiring a minimum capital of US$10,000. Permitted activities include:
- Organizing investment deals
- Providing credit advice and financial product advice
- Custody services
- Insurance intermediation
- Operating platforms such as crowdfunding
This license is ideal for smaller advisory firms or fintech startups offering investment or insurance-related services.
Category 5 License: Islamic Finance
The Category 5 License caters to Islamic finance businesses, with a minimum capital requirement of US$10 million. Activities include operating an Islamic finance business, compliant with Sharia law. This license supports institutions seeking to tap into the growing demand for Sharia-compliant financial services.
How MS Can Help You with Company Setup in ADGM?
Selecting the right ADGM license is crucial for company setup in ADGM. At MS, we collaborate with licensed local partners to guide businesses through the process, from assessing your activities to recommending the ideal license category. We coordinate approvals, manage documentation, and provide guidance on corporate governance and ongoing compliance. Our strategic advisory ensures your ADGM setup aligns with long-term business goals, allowing you to focus on growth while we handle the regulatory and procedural complexities efficiently.
