Abu Dhabi Global Market attracts dozens of special purpose vehicles
Abu Dhabi Global Market, the capital’s financial free zone, has attracted more than 50 special purpose vehicles (SPVs) to register in its jurisdiction as part of a strategy to widen its offering to investors and corporates.
SPVs allow companies to own assets at arm’s length and can be used for specific assets or transactions. They are deployed for a variety of purposes including efficient corporate and financial structuring, risk management and ring-fencing of assets and liabilities.
Many SPVs are established in offshore centres around the world, but ADGM is keen to give its members the opportunity to keep financial assets and transactions in the UAE.
SPVs in ADGM will be governed by its company regulations and underpinned by its common law courts system.
The SPV platform was launched last week, but there has been a steady stream of interest in it since ADGM announced it was incorporating a dedicated SPV structure in its financial centre.
The market announced that more than 50 SPVs had already been set up, with corporates, financial institutions, sovereign wealth funds, family offices and individuals keen to exploit the structure.
“ADGM has seen high demand and strong interest from sectors such as asset management, family wealth, aviation, shipping, and technology/intellectual property development,” it said in a statement.
“The innovative ADGM SPV regime, benchmarked against leading international jurisdictions in terms of features, cost and ease of set-up, has gained exceptional industry recognition and business endorsement,” it added.
The launch was welcomed by investors and legal experts.
Shirish Bhide, head of wholesale and international banking at FGB, said: “FGB is extremely proud to have assisted ADGM in its journey of becoming a key player in the Middle East for aircraft SPVs for leasing companies and airlines around the world, competing with the likes of Dublin and other offshore entities. “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 the UAE.”
Salem Al Matroushi, founder and chief executive of Tasleeh, a consultancy which advises on the defence industry, said: “ADGM offered an excellent SPV option which meant that I could use a jurisdiction closer to home, which provides a great deal of comfort and ease.”
Cara Dwyer, senior associate in corporate structuring of UAE law firm Al Tamimi, said: “The introduction of SPVs is an important addition to the range of entities available in ADGM and is another example of ADGM seeking to respond to the needs of the market.”
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This article updated to include this paragraph: PVs in ADGM will be governed by its company regulations and underpinned by its common law courts system.
Updated: January 29, 2017 04:00 AM