ADGM

Setting up an Special Purpose Vehicle in ADGM
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Setting up an Special Purpose Vehicle in ADGM

In the world of wealth planning, investment structures, and complex corporate transactions, three letters are gaining increasing attention: SPV, Special Purpose Vehicle. It’s not a technical whim or yet another convoluted structure; on the contrary, an SPV is an extremely useful tool for anyone looking to protect assets, isolate risks, and manage transactions efficiently. What is an SPV? An SPV is a company created for a specific purpose: holding assets, participating in a single project, issuing securities, managing an investment, or acting as a vehicle for a joint venture. Its strength lies in asset segregation: what happens inside the SPV stays inside the SPV. The risk of the transaction does not “contaminate” the owner’s other assets or businesses. In practice: – want to purchase a high-value property without exposing your entire wealth? → SPV. – want to invest with partners without mixing everything together? → SPV. – want to hold shares, IP rights, corporate stakes, or financial instruments in an orderly and protected way? → SPV. Why ADGM? The Abu Dhabi Global Market is a financial free zone that, in recent years, has become one of the most prominent international hubs for corporate structuring. A sort of “London in the desert”, built on English common law and high regulatory standards. Three elements make a real difference: Strikingsimplicity:  ADGM has developed a highly user-friendly SPV regime: everything is managed remotely through a digital, streamlined, bureaucracy-free process. Fasttimelines:theincorporation process takes around 10 business days. Transparencyand clear pricing: ADGM publishes transparent fees and requires only straightforward compliance steps. Its goal is to attract investors, not overwhelm them with red tape. What an ADGM SPV cannot do Because it is a “purpose-built” vehicle, an SPV cannot hire employees or carry out operational activities. It performs exactly what it is designed for: holding assets, issuing instruments, and acting as a protected corporate shell. And it does it well. The “Nexus” Requirement ADGM requires each SPV to demonstrate a connection with the UAE or the GCC region: assets, investors, projects, securities listings, and so on. It’s a logical requirement designed to ensure real economic substance and prevent the SPV from becoming a mere offshore shell. Why is it becoming the preferred choice for investors, family offices, and businesses? An SPV offers international credibility, flexibility, and operational speed. It is not an improvised tax haven, but a regulated financial centre that speaks the language of global investors and allows complex structures to be managed with a level of simplicity that is hard to find elsewhere. A strategic choice, not a trend Setting up an SPV in ADGM means adopting a modern, recognised, and competitive structure—one that protects investments and streamlines transactions that might otherwise become a bureaucratic maze. For wealth managers, investors, and anyone handling cross-border operations, ADGM is one of the most intelligent jurisdictions to establish an SPV today. The most efficient path is also the simplest. Looking to set up an SPV in ADGM? Studio Gaeta supports private clients, family offices, and companies at every stage: project assessment, structure selection, full incorporation assistance, and ongoing compliance. Professional, discreet, and tailored advice built around your real needs. Contact us for a personalised assessment. Chiara Pascale Paolo Gaeta & Associati

Trusts and Foundations in the DIFC
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Trusts and Foundations in the DIFC: The 2018 Reforms and Opportunities for Wealth Planning

In recent years, the United Arab Emirates has strengthened its position as an international hub for family wealth management and protection. In particular, the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) — the country’s two financial free zones — have developed modern, competitive legislation on trusts and foundations, legal instruments widely used worldwide for asset protection, succession, and estate planning. DIFC and ADGM: The Free Zones for Fiduciary Structures The DIFC and the ADGM are the only jurisdictions in the UAE where it is possible to establish trusts and foundations. Both operate within the Gulf Cooperation Council (GCC) framework but have their own legal systems based on English common law and independent courts. This regulatory autonomy makes them particularly attractive to investors and families with complex, internationally relevant assets. The 2018 DIFC Reforms In March 2018, the DIFC introduced a new Foundations Law (DIFC Law No. 3/2018) and amended its existing Trust Law (DIFC Law No. 4/2018), with the aim of providing greater flexibility to settlors, founders, and beneficiaries. These legislative changes enhance asset protection, introduce the ability to convert foundations into companies, and strengthen fiduciary governance. The following sections examine these three aspects in detail. 1. Stronger Asset Protection Before the reform, transfers of assets to a trust or foundation could be set aside if the settlor was insolvent at the time of transfer or if there was evidence of intent to defraud creditors. Now, however, the burden of proof lies with the creditors, who must demonstrate both that the settlor intended to defraud them and that the transfer caused the insolvency. In addition, a three-year limitation period has been introduced for actions relating to trusts or foundations. Further protection has also been added regarding foreign judgments, which cannot be enforced if inconsistent with DIFC law. This framework positions the DIFC among the world’s most protective jurisdictions for those seeking to shield assets from external risks. 2. Conversion of Foundations into Companies A key innovation is the possibility to convert a foundation into a DIFC company. Previously, only the reverse process — converting a company into a foundation — was permitted. This new flexibility responds to the needs of families and businesses wishing to restructure in line with new wealth or governance strategies. 3. Strengthened Fiduciary Governance The revised rules provide that trustees and officers of a foundation or trust must cease to act if affected by a foreign judgment, thus preventing conflicts that could compromise the entity’s management. Why These Reforms Matter With these reforms, the DIFC confirms its status as a global centre of excellence for international wealth planning, on par with — and in some respects superior to — other top-tier jurisdictions such as the United Kingdom, Jersey, or Singapore. In particular, the DIFC’s so-called “firewall provisions” are among the strongest, allowing powers to be reserved to the settlor without risking challenges to the validity or genuineness of the trust or foundation. Conclusions The reforms introduced in 2018 have consolidated the DIFC’s position as a strategic hub for the management, protection, and transfer of wealth on an international scale. By limiting creditors’ claims, restricting the enforcement of foreign laws, and introducing flexible tools such as the conversion of foundations into companies, the DIFC has become a preferred choice for: -High-net-worth families -Family-owned businesses -International investors seeking legal stability and asset protection The message is clear: the DIFC has adopted forward-looking, sophisticated legislation that can adapt swiftly to the evolving needs of global clients. Chiara Pascale Paolo Gaeta & Associati

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