Following Abu Dhabi Finance Week 2025, the ADGM has reaffirmed its role as the region’s premier centre for capital, investment and financial innovation. Within this backdrop, Abu Dhabi Global Market (ADGM) has become a natural home for asset managers and fund managers seeking institutional, sovereign and family office capital.
Why ADGM for asset and fund managers
ADGM is an international financial centre operating on a direct application of English common law, spanning Al Maryah and Al Reem Islands in Abu Dhabi. The Financial Services Regulatory Authority (FSRA) provides a sophisticated regulatory regime, supported by a mature ecosystem of administrators, custodians, legal and advisory firms.
For asset and fund managers, the ADGM offers:
- Regulatory clarity for portfolio management and fund management activities.
- Proximity to sovereign wealth funds, institutional investors and large family offices.
- A competitive free-zone tax regime, including potential 0% corporate tax on qualifying income for eligible entities.
Establishing an investment management firm in the ADGM is therefore a strategic choice for managers looking to build a scalable GCC and global platform, whilst maintaining high standards of governance and investor protection.
Regulatory framework and licence types
Any firm conducting regulated financial services “in or from” the ADGM must obtain a Financial Services Permission (FSP) from the FSRA. For investment managers, the most relevant regulated activities are:
- Managing Assets – discretionary portfolio management for funds and segregated mandates.
- Managing a Collective Investment Fund – acting as fund manager to ADGM or foreign funds.
- Advising on Investments or Credit and Arranging Deals in Investments – to support distribution, co-investment and bespoke solutions.
Most managers are authorised as prudential Category 3C (asset/fund management) or Category 4 (advisory/arranging only), with capital calibrated to the scale and risk profile of activities. Applicants are expected to align their business model, capital planning and risk management with the latest FSRA rulebooks, guidance and circulars.
Authorisation process for an ADGM fund or asset manager
While each authorisation is fact-specific, the FSRA journey typically follows four stages:
-
Initial engagement and scoping
- Define target investors, strategies, leverage and use of foreign funds or segregated accounts.
- Identify the required regulated activities and prudential category.
- Engage the FSRA early to test the proposed scope and expectations.
-
Regulatory Business Plan and application pack
The Regulatory Business Plan should clearly set out:
- Governance structure, including Board composition and the Three Lines Model.
- Risk appetite, material risk assessment and robust controls.
- Investment, dealing, valuation and liquidity management processes.
- Compliance, AML/CFT and sanctions frameworks aligned with UAE federal law and FSRA rules.
This is supported by policies and procedures, outsourcing arrangements, IT and cybersecurity architecture, and financial projections reflecting prudential requirements.
-
Key individuals and local substance
The FSRA expects genuine decision-making substance in ADGM. Typically:
- The Senior Executive Officer (SEO), Compliance Officer (CO) and Money Laundering Reporting Officer (MLRO) are UAE-resident and suitably experienced.
- Controlled functions undergo fitness-and-propriety assessment and, where appropriate, interview.
- The firm demonstrates credible local presence through premises, staffing and oversight.
-
In-principle approval and go-live
Once satisfied, FSRA issues an in-principle approval. The firm then completes incorporation, office arrangements, bank accounts, systems implementation and the appointment of any mandatory functions such as the Internal Auditor and External Auditor. When all conditions are met, FSRA grants the FSP and the firm may commence regulated activities.
Operating expectations and ongoing obligations
Post licensing, firms are subject to risk-based supervision and continuing obligations, including:
- Capital and liquidity – maintaining regulatory capital and monitoring buffers under the prudential framework.
- Risk management – operating an enterprise risk management framework with defined risk appetite statements, a comprehensive methodology, ongoing monitoring and periodic reporting to the Board or Governing Body.
- AML/CFT and sanctions – robust client due diligence, ongoing monitoring, sanctions screening and prompt reporting of suspicious activity, aligned to UAE federal law and FSRA AML rules.
- Internal Audit – completion of an effective, independent and objective internal audit review providing assurance over governance, risks and controls of the firm within 12 months of receipt of FSP.
- Change management and notifications – timely notification of material changes in strategy, ownership, key personnel and outsourcing, supported by a documented new-product and new-business activity process.
Boards are expected to provide clear risk oversight, challenge management, and evidence how Governance, Risk Management, Compliance and Internal Audit operate within a coherent control environment.
Post-licensing risk, governance and assurance
Many regulatory and operational issues emerge after the licence is granted, as the business scales and strategies evolve. A resilient ADGM investment management firm typically maintains:
- A robust governance structure, with appropriate Board and committee composition, defined decision rights and documented delegation of authority.
- A clearly articulated risk management framework, with risk appetite, KRIs and regular Board reporting.
- An independent Internal Audit function, with coverage of key processes, controls and regulatory requirements.
- A proactive compliance and AML/CFT function, combining monitoring, challenge, advisory support and regulatory change tracking.
- A strong cybersecurity and operational resilience posture, including a defined cyber risk management framework, incident response, business continuity and third-party risk management.
- Robust data protection and information governance for client and investor data.
Well-designed post-licensing arrangements support FSRA expectations, reduce execution risk and enhance confidence among institutional and sovereign investors.
How Paragon Consulting Partners can help
Establishing an investment management firm in the ADGM is a strategic decision that shapes how your firm accesses capital, manages regulatory risk and scales across the region.
Paragon Consulting Partners supports asset managers, fund managers and investment firms across the full lifecycle of the setup process: from licence strategy and Regulatory Business Plan development, through to the design and implementation of Governance, Risk Management, Internal Audit, Regulatory and Cybersecurity frameworks via our Outsourcing services.
If you are considering establishing, refining or expanding an investment management firm in ADGM, contact Paragon Consulting Partners to discuss how we can help you become fully ADGM-ready.
