What is the Abu Dhabi Global Market (ADGM) tech startup licence?
The ADGM Tech Startup Licence is an operational commercial licence with an incentivised licence fee structure to enable startups, that meet the criteria, to set up and scale their business for up to 5 years of initial operations in ADGM.
What classifies as a tech startup?
A Tech Startup is a company whose objective is to bring technology products or services into its target market. These companies deliver new technology products or services in new and unique ways.
The ADGM Tech Startup is a sector agnostic low-cost operating licence available to all technology and innovation startups. The licence was introduced to encourage entrepreneurship in the region and remove cost as a barrier for entry.
Validity and licence cost
For seed stage startups, the annual licence fee is USD 1,000, and it can be renewed once for another 12 months at USD 1,000, if the entity still meets seed stage criteria (i.e., maximum one-time renewal).
At the end of the second year, it is envisaged that the success of seed stage startups will warrant transition from seed to emergent stage.
A licence issued for emergent stage tech startups is valid for 12 months and the annual licence fee is USD 4,300, and it can be renewed for another 2 consecutive years if it still meets emergent stage criteria (ie max two renewals).
Following the emergent stage, it is foreseen that the startup’s success will warrant transition to a mature stage and the full annual licence fee of USD10,000 will be applicable.
Who should apply?
- Tech start-ups with product/market fit that support sustainable economic development.
- Tech startups that have the potential to scale regionally (or globally).
- Startups with an innovative tech business model that leverages technology as the main platform to solve customer challenges and provide products and services that meet specific market needs.
Eligibility for the incentivized licence is determined at the time of application and the duration is fixed. There are two different type of stage: Seed Stage and Emergent Stage.
If a startup is approved for the seed stage incentivized licence, it will have two years in seed stage and will automatically move into the emergent stage in its third year of operations in ADGM regardless of the number of full-time employees.
Benefits of Tech Startup Entity
- Low-cost operating entity with subsidised period for the licence fee.
- No minimum share capital required.
- Access to world-class co-working spaces.
- Access to the leading venture capital firms in the region.
- Full foreign ownership.
- 0% corporate tax and 0% personal income tax.
- 5% VAT applicable.
- A flexi-desk office shall suffice the office space requirement.
- Allowance of visa issuance based on the office space.
- Eligible to apply to Abu Dhabi Department of Economic Development for dual licence recognition.
Getting a tech startup licence in ADGM is quick, easy and won’t incur any high cost. It is hassle-free as the process is solely digitised. The licence requires the appointment of a signatory who resides in the UAE and a physical office in ADGM.
How CBD Formations can assist
Should you be interested in seeking assistance with the incorporation of a tech start-up entity in the ADGM, please write to us at email@example.com or call +971 (0) 4551 0677.