FSRA Authorisation Process

Establishing your financial services business in the Abu Dhabi Global Market (ADGM) offers a strategic gateway to the Middle East, Africa, and South Asia. With a world-class regulatory framework overseen by the Financial Services Regulatory Authority (FSRA), ADGM is an increasingly preferred jurisdiction for asset managers, fintech firms, venture capital platforms, and investment advisors.

Below is a step-by-step overview of the setup process for regulated firms in ADGM:

  1. Define Your Regulated Activities

The FSRA is an activity-based regulator, which means your firm must apply for a Financial Services Permission (FSP) specific to the regulated activities you intend to carry out. These may include:

  • Managing Assets or Funds
  • Advising on Investments or Credit
  • Arranging Deals or Custody
  • Providing Trust or Money Services
  • Operating a Private Financing Platform (PFP)
  • Robo-advisory / Digital Investment Management
  • Dealing in Investments
  • Virtual Asset Services (via DLT or OTC)

Reference: FSMR Schedule 1

  1. Regulatory Business Plan and Initial Engagement

Before applying, firms must prepare a Regulatory Business Plan (RBP) detailing:

  • Proposed activities
  • Client types and jurisdictions
  • Governance and control structures
  • IT infrastructure and outsourcing
  • Compliance and risk frameworks

Once prepared, you engage in initial discussions with the FSRA's Authorisation team to align expectations and receive guidance.

  1. Appoint Key Individuals and Define Structure

The following Controlled Functions must be identified and approved:

  • Senior Executive Officer (SEO) - must be UAE-resident
  • Compliance Officer (CO) - must be UAE-resident (can be outsourced)
  • MLRO - must be UAE-resident (can be the same person as CO)
  • Finance & Risk Officer - can be outsourced or placed in a group entity

Each must submit an Approved Person Status (APS) form.

  1. Capital Requirements

Capital requirements in ADGM are determined by the nature of the licensed activities and the type of clients being served. Each regulated activity has a defined base capital requirement, which serves as the minimum threshold for licensing.

In addition to the base capital, firms are expected to meet:

  • Expenditure-Based Capital Minimum (EBCM): This links capital adequacy to the firm’s operating costs and ensures it can sustain its business during periods of stress.
  • Variable Capital Requirement (VCR): Applied in certain cases, particularly for money service providers, based on transaction volume and risk exposure.
  • Risk-Based Capital Requirements: These may apply where activities expose the firm to credit, market, or operational risks.

The overall capital requirement is typically the highest of these applicable components. The FSRA uses this layered approach to ensure that financial services firms operating within ADGM remain stable, well-capitalized, and resilient to risk.

  1. Application Submission via FSRA Connect

Once your structure is clear and discussions with FSRA are positive:

  • You are invited to access FSRA Connect, the online application portal
  • Submit your:
    • General Information (GIRA) form
    • Activity-specific supplements
    • APS forms for Controlled Functions
    • Supporting documents (RBP, policies, financial projections)
  • Pay the applicable application fees
  1. In-Principle Approval & Post-Licensing

If your application is successful, the FSRA issues an In-Principle Approval (IPA) subject to meeting key conditions:

  • Incorporation and licensing with the ADGM Registration Authority
  • Office lease on Al Maryah or Al Reem Island
  • Capital funding and share allocation
  • Onboarding key personnel
  • IT and compliance infrastructure in place
  • Important Note:
  • The issuance of an In-Principle Approval and subsequent incorporation of the ADGM entity does not authorize the commencement of business operations. The entity must not engage in any regulated activity until all conditions outlined in the In-Principle Approval are fully satisfied and the final FSRA approval has been granted. Commencing regulated activities prior to this may result in regulatory breach.

Once conditions are met, the FSRA issues your Financial Services Permission.

  1. Incorporation and Licensing Fees

Setting up a licensed entity in ADGM involves a series of regulatory and administrative fees. These include charges for company name reservation, registration, commercial licensing, business activity approvals, and data protection.

The total cost will vary depending on your firm's business activities, structure, and whether any concessions apply (such as reduced fees for specific license categories like venture capital fund managers).

All entities are required to obtain a commercial license through the ADGM Registration Authority and pay associated annual fees. Additional government services such as visa processing, establishment cards, and document attestations may also apply based on staffing and operational needs.

A detailed breakdown of applicable fees can be found in the official ADGM Registration and Incorporation Schedule

  1. Office Space

Firms must maintain a physical presence in ADGM, typically on Al Maryah or Al Reem Island. While ADGM does not lease premises directly, you can coordinate through the CRM team or local providers.

  1. Additional Setup Considerations
  • Bank Account: Required for capital injection and day-to-day operations; early engagement with DIFC-friendly banks is recommended.
  • Visa & Establishment Card: Issued after license activation to onboard staff.
  • Professional Indemnity Insurance (PII): Required depending on activities.
  • IT & Cybersecurity Readiness: Increasingly reviewed during application assessments.
  1. Why Choose ADGM?
  • English common law framework
  • 100% foreign ownership
  • No personal or corporate income tax
  • Fintech-friendly (incl. RegLab for innovation testing)
  • Transparent and time-bound licensing process
  1. How VelthRad Can Help

VelthRad provides comprehensive advisory and project management solutions to support your ADGM business setup. Our expertise ensures a seamless and well-structured approach across all stages of the licensing and operational process, including:

  • End-to-end support for license applications and regulatory approvals
  • License selection, regulatory scoping, and feasibility analysis
  • Guidance on business plans and preparation of supporting documentation
  • Direct coordination and liaison with the FSRA during the approval process
  • Talent sourcing and onboarding for key regulatory and management roles
  • Ongoing compliance advisory and IT infrastructure support
  • Provision of outsourced roles such as Compliance, MLRO, Risk, Finance Officer and COO Support (assistance in preparing operational forms, procedures, policies etc)
  • Appointment of experienced Independent Directors
  • Internal audit and governance review services

Disclaimer:
The information provided above is for general understanding and informational purposes only. Regulatory requirements, processes, and costs are subject to change based on the nature of the business, the type of license sought, and updates from the ADGM authorities. We recommend reaching out to VelthRad Consultants for a tailored discussion and end-to-end guidance aligned with your specific business model and regulatory needs.

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