ADGM is a financial free zone on Al Maryah Island with its own courts, its own civil and commercial law based on English common law, and its own financial regulator, the Financial Services Regulatory Authority. It sits alongside the DIFC in Dubai as one of the UAE's two common law financial centres, and separately from the federal onshore regulator described in the SCA guide. A permission from the FSRA authorises business conducted in and from ADGM, and does not authorise dealing with retail clients in mainland UAE.
The five prudential categories
The FSRA grants a Financial Services Permission listing the regulated activities a firm may conduct, and places the firm in one of five prudential categories. The shape is recognisable to anyone who has worked under the UK regime. Category 1 covers deposit taking. Category 2 covers firms dealing as principal in a way that takes on market risk. Category 3 splits into sub-categories covering dealing as matched principal, dealing as agent, providing custody and managing assets. Category 4 covers advisory and arranging firms that hold no client assets. Category 5 covers Islamic financial institutions operating a profit sharing investment account.
Capital follows the category and is calculated as the higher of a base requirement, an expenditure based requirement derived from your own cost base, and a risk based figure. That structure has one practical consequence founders miss: your capital requirement grows with your operating expenses, so hiring and marketing spend feed back into the prudential number. A firm that budgets capital once at application and never revisits it ends up short in year two.
Retail business carries its own weight. Firms permitted to deal with retail clients face additional conduct requirements, client money and asset rules, complaints handling and disclosure obligations. Applying for a retail endorsement is a materially different application from a professional clients only one, and the FSRA treats it that way.
Descriptive only. Categories, capital calculations and conditions are set by the FSRA case by case and change over time. Any applicant needs its own ADGM counsel and should read the current rulebook rather than any summary.
Virtual assets and the reason people look here
ADGM built a virtual asset framework early and treats accepted virtual assets as a regulated activity class rather than as an exception to the rules. Operating an exchange, providing custody, dealing or advising in accepted virtual assets each requires the relevant permission, with technology governance, custody standards and market surveillance obligations attached. Which assets are accepted is determined against published criteria rather than by the firm. For a group weighing a Gulf crypto base against an EU one, the comparison sits alongside MiCA and the wider question of crypto licence jurisdictions, and the answer usually turns on where the customers and the banking are, not on which rulebook is friendlier.
Who accepts an ADGM firm
This is the strongest part of the case. An FSRA-authorised firm presents as a common law entity, in a jurisdiction with an English language rulebook, an independent court and a regulator that publishes its enforcement. Correspondent banks and prime brokers rate that well, and the diligence conversation moves quickly to the firm's own file: ownership chain, client geography, sanctions exposure, AML controls, and whether the senior managers are approved individuals with real track records. That is the conversation you want, and it is not the one an offshore registered brokerage gets. The offshore licences piece sets out the contrast.
The limits are the ones every trading firm meets. Card acquiring classifies leveraged trading by merchant category, which means underwriting with rolling reserves, volume caps and chargeback ratio monitoring wherever you are licensed. Advertising platforms run financial services advertiser verification and country level restrictions, so the licence reference gets you into the queue rather than past it. Liquidity providers ask which countries your clients sit in and restrict exposure to markets that reserve the activity locally, which is why client geography keeps deciding outcomes founders expect the licence to decide. Platform vendors and technology suppliers care mostly about know your business documentation and payment terms.
What the application actually tests
Three things carry the weight. The regulatory business plan, which has to describe the activities, the client types, the target markets and the flows of money with enough precision that the regulator can see the risk. The people, since every controlled function needs an approved individual whose experience matches the role and who will be interviewed. And the systems, meaning the compliance manual, the AML framework, the client money arrangements, the outsourcing register and the technology governance that supports them.
Applicants underestimate the third item most often. A rulebook that expects records to be produced on request assumes a firm whose systems can produce them, and a spreadsheet-based operation cannot. Getting the client onboarding, suitability records, trade records and complaint logs into one auditable system before the regulator asks is cheaper than retrofitting them afterwards.
ADGM or DIFC
Both are credible, both are common law, both have retail and professional routes. The practical differences are cost base, the concentration of specific industries, the depth of the local talent pool for the roles you need to fill, and which regulator's staff have seen your business model before. Firms with a Gulf sovereign and institutional focus lean to Abu Dhabi. Firms wanting the largest cluster of banks, funds and law firms in one place lean to Dubai. Neither choice fixes an unclear business model, and the group structure question, which entity faces which clients, matters more than the postcode. Firms comparing regional bases usually put Abu Dhabi and Dubai side by side before deciding.
SINGUARD's Executive Directors, Alex Onta & Roman Onta, run the company's software business from Dubai. SINGUARD holds no financial services licence and provides technology to firms that hold their own.
"ADGM reads like an FCA handbook that has been tidied up. That familiarity is the selling point. Your compliance manual mostly survives the move, and your counterparties recognise the shape of it."
— Roman Onta, Executive Director, SINGUARD
Key Takeaways
- ADGM applies English common law directly, with its own courts and a rulebook modelled on the UK regime.
- The FSRA places firms in one of five prudential categories, and capital is the higher of a base, expenditure based and risk based figure.
- Retail permissions are a separate and heavier application than professional clients only, with client money and conduct rules attached.
- An FSRA licence moves the banking conversation to your own file, but card acquiring for trading merchants stays high risk everywhere.
Frequently Asked Questions
Does an ADGM licence cover mainland UAE clients?
No. ADGM is a separate jurisdiction and an FSRA permission covers business in and from ADGM. Dealing with or marketing to onshore retail clients raises a separate question under federal rules and needs local advice.
What is the difference between ADGM and the DIFC?
Both are common law financial free zones with their own courts and regulators, ADGM in Abu Dhabi under the FSRA and the DIFC in Dubai under the DFSA. The rulebooks are similar in shape, and the choice usually comes down to cost base, industry concentration and talent availability rather than regulatory substance.
Can an ADGM firm deal in crypto?
ADGM operates a framework for accepted virtual assets, and exchange, custody, dealing and advisory activity each require the relevant permission with technology governance and custody standards attached. Which assets qualify is determined against published criteria, not by the firm.
About the Author
Roman Onta is an Executive Director at SINGUARD. He builds the Prop Firm CRM, the Broker CRM, Scalegram and CopySignals side by side with his brother Alex Onta, and he helped on the design of eTrader, the division Alex built and leads. His ground is worldwide payment processing, AML compliance and the corporate structures brokers are built on, work the two of them carry together, shaped by executive roles in the UAE and international corporates. He lives and works in Dubai for most of the year. Meet the executive duo leading Singuard's five divisions.