BVI Company vs ADGM SPV: Which Structure Is Right for International Holdings

Introduction

For international families, entrepreneurs, investors and corporate groups establishing a holding structure, the choice of jurisdiction can have consequences far beyond the place where a company is incorporated. Legal certainty, taxation, banking, governance, regulatory obligations, administration and the location of the underlying assets can all influence whether a particular structure is appropriate.

Two jurisdictions that may arise in this context are the British Virgin Islands (BVI) and Abu Dhabi Global Market (ADGM). A BVI Business Company has long been used in international corporate and investment structures, while an ADGM Special Purpose Vehicle (SPV) provides a passive holding vehicle within Abu Dhabi’s international financial centre.

A comparison of a BVI Company vs ADGM SPV, however, requires more than comparing incorporation costs or headline tax rates. The two are not precisely equivalent corporate products. A BVI Business Company is a flexible corporate form incorporated under BVI company legislation. An ADGM SPV, by contrast, is principally a passive special-purpose holding company designed to ring-fence specified assets and liabilities and cannot be used to conduct an operational business or employ staff.

This distinction is fundamental. A business requiring a company to conduct substantive commercial operations may be considering a different question from an investor seeking a dedicated entity to hold shares, real estate interests, securities or other investments.

The comparison has become particularly relevant following ADGM’s removal of the previous nexus requirement for SPVs. Historically, applicants establishing an ADGM SPV were required to demonstrate an appropriate connection to ADGM, the UAE or the wider GCC region. With that requirement removed, an ADGM SPV can now, in principle, be considered for internationally located assets without needing to establish the former regional connection.

One practical requirement remains notwithstanding the removal of the nexus test: an ADGM SPV must still appoint an authorized signatory who is a UAE resident or GCC national for statutory administration purposes. This is a narrower, functional requirement rather than the broader ownership, asset or economic nexus formerly required, but it means the SPV is not entirely free of a UAE/GCC administrative touchpoint.

This materially broadens the potential international application of the ADGM SPV regime and makes ADGM increasingly relevant when international private clients and corporate groups compare potential holding jurisdictions, including established international financial centres such as BVI.

There is nevertheless no universal answer to whether a BVI company or an ADGM SPV is the appropriate structure. The answer depends on what the entity is intended to do, where its owners and assets are located, where it will be managed, the applicable tax position, banking requirements, governance arrangements and the expectations of investors, lenders and other counterparties.

BVI Company vs ADGM SPV: Key Differences at a Glance

The following table provides a high-level comparison. It should be treated as a starting point rather than a substitute for transaction-specific legal and tax advice.

What Is the Difference Between a BVI Company and an ADGM SPV?

A BVI Business Company is a company incorporated in the British Virgin Islands under the BVI Business Companies legislative framework. The BVI has a longstanding international corporate-services industry, and BVI companies are used across a range of international ownership, investment and commercial structures.

Formation of a BVI Business Company requires a BVI registered agent. The BVI Financial Services Commission confirms that only appropriately authorised trust and corporate services providers acting as registered agents may form legal persons in the jurisdiction.

A BVI Business Company should not automatically be characterised as an “offshore shell” or a “tax-free company”. Those descriptions oversimplify the modern BVI regulatory environment and can obscure the legal, reporting, beneficial ownership and tax obligations that may apply to the company and its stakeholders.

An ADGM SPV is different in purpose. ADGM describes its SPVs as passive holding companies established to isolate financial and legal risk by ring-fencing particular assets and liabilities. ADGM also expressly states that its SPVs cannot be used to conduct operational business or hire staff.

An ADGM SPV may therefore be particularly relevant where the objective is to establish a dedicated legal entity around an asset, investment or liability rather than conduct an active operating business.

For example, an international family might establish an SPV to hold a particular investment portfolio. A corporate group might use an SPV to hold shares in a subsidiary. Several investors might establish one as a joint investment vehicle, while an entrepreneur could potentially use an SPV to separate ownership of particular investments from operating activities.

This means that the first question when comparing a BVI Company vs ADGM SPV should not be “Which jurisdiction is better?” It should be: What does the entity actually need to do?

If the intended company will conduct active commercial operations, employ staff and provide services to customers, an ADGM SPV may not be the appropriate ADGM vehicle. If the purpose is principally passive asset holding, however, an ADGM SPV may be directly relevant to the comparison.

BVI Company vs ADGM SPV for International Holdings

Holding Shares and International Investments

Both structures may arise in discussions concerning international investment holding, but the appropriate choice depends on the ownership chain and the nature of the investments.

A BVI Business Company has long been used to hold shares in businesses and investment companies in different jurisdictions. Its familiarity within international corporate transactions means it may already appear within existing investment structures, shareholder arrangements, financing documentation and succession plans.

An ADGM SPV can similarly be used to hold assets and investments within a separate corporate vehicle. Its appeal may be particularly relevant to clients who want their holding structure located within Abu Dhabi’s international financial centre and operating under ADGM’s legal and institutional framework.

The removal of the ADGM SPV nexus requirement is particularly significant in this comparison. Previously, an applicant was required to demonstrate an appropriate connection to ADGM, the UAE or the wider GCC region. With that requirement removed, an international client can now, in principle, consider an ADGM SPV for globally located assets without needing to establish the former regional connection solely for SPV eligibility purposes.

This broadens the potential application of ADGM SPVs to international holding structures, including those established by families and businesses whose underlying investments are primarily located in Europe, Asia, North America or other international markets.

It does not, however, follow that an existing BVI structure should automatically be replaced with an ADGM SPV. Restructuring an established holding arrangement may itself create legal, tax, financing, contractual and transfer-tax consequences.

Real Estate Holdings

Corporate vehicles are frequently considered for real estate investment, particularly where investors want to separate properties, create joint ownership arrangements or facilitate financing and succession planning.

A BVI company may appear within international property-holding structures, subject to the law of the jurisdiction in which the real estate is situated. An ADGM SPV may similarly be considered as a holding vehicle for real estate interests where permitted.

Following the removal of the nexus requirement, an internationally located property no longer needs to establish the former UAE or GCC connection solely for ADGM SPV eligibility purposes. This potentially broadens the circumstances in which an ADGM SPV can be considered within an international property-holding structure.

The location of the property nevertheless remains critical. The jurisdiction in which real estate is situated will generally have its own rules concerning legal ownership, registration, transfer taxes, capital gains, inheritance or succession, financing and beneficial ownership.

Consequently, the fact that either a BVI company or ADGM SPV is legally capable of forming part of a real estate structure does not determine the tax or legal consequences of that structure.

Family Wealth and Investment Structures

The BVI Company vs ADGM SPV comparison can also arise for internationally mobile families whose assets span several countries.

A BVI company may already be familiar to a family and its international advisers, particularly where an existing trust, investment or holding structure has been established using BVI entities.

ADGM provides a different institutional environment. An ADGM SPV may be used alongside other appropriate wealth-planning vehicles, potentially including an ADGM Foundation, to separate particular investments or asset classes within a wider family structure.

The removal of the nexus requirement is particularly relevant to internationally mobile families. An ADGM SPV can now, in principle, be considered for globally located assets without those assets, shareholders or directors needing to establish the former regional nexus solely for SPV eligibility purposes.

For families with an existing or developing connection to the UAE, ADGM may also provide proximity to family-office, investment-management, banking and professional-services infrastructure in Abu Dhabi and the wider Emirates. However, the removal of the nexus requirement means that the potential relevance of an ADGM SPV is no longer confined to families with an existing UAE or GCC connection.

The decision should nevertheless be driven by the family’s overall circumstances rather than jurisdictional branding. Residence and domicile of family members, succession objectives, asset location, tax reporting, beneficial ownership, governance and banking should all be considered.

Joint Ventures and Co-Investments

Both jurisdictions can arise in joint-venture and co-investment structures.

The appropriate vehicle will depend partly on what the joint venture is expected to do. Where the entity is simply holding an investment for several participants, an ADGM SPV may provide an appropriate special-purpose structure. Its constitutional documents and associated shareholders’ agreement can establish economic and governance rights between the investors.

Following removal of the nexus requirement, international investors can, in principle, consider an ADGM SPV for a co-investment or joint investment structure without needing to demonstrate the former UAE or GCC connection solely for SPV eligibility purposes.

Where a broader operating company is required, however, the analysis may favour a general corporate vehicle rather than an SPV. Depending on the circumstances, that could include a BVI Business Company or an appropriate operating-company structure in ADGM or another jurisdiction.

The governing law of shareholder arrangements, dispute-resolution provisions, financing requirements and future exit strategy should also be considered before selecting the jurisdiction.

Legal Framework and Corporate Governance

Legal certainty is an important consideration when comparing international holding jurisdictions.

The BVI operates a common law-based legal system and has developed a substantial body of corporate legislation and jurisprudence around international companies. This longstanding corporate environment is one reason BVI companies remain familiar to international lawyers, corporate-service providers, investors and financial institutions.

ADGM offers a different but similarly internationally oriented proposition. Its legal framework directly applies English common law principles within its civil and commercial jurisdiction and is supported by ADGM’s own court system.

For international shareholders accustomed to English legal concepts, this can be particularly relevant when structuring shareholder rights, governance arrangements and commercial contracts.

An ADGM SPV may also offer flexibility in areas such as share classes and corporate governance, allowing a structure to be designed around the economic and decision-making arrangements of its stakeholders where the applicable rules permit.

For both BVI and ADGM entities, however, the quality of the underlying documentation matters. The jurisdiction itself cannot compensate for poorly drafted articles, inadequate shareholders’ agreements or governance arrangements that do not reflect the commercial intentions of the parties.

For sophisticated structures, constitutional documents should therefore be considered alongside shareholder agreements, reserved matters, transfer restrictions, board arrangements, funding obligations, distribution policies and exit provisions.

BVI Company vs ADGM SPV: Corporate Tax Considerations

Tax is often one of the first questions raised in a jurisdictional comparison, but it is also an area in which simplistic comparisons can be particularly misleading.

The appropriate analysis is not simply whether one jurisdiction advertises a low or zero headline rate. The tax treatment of the entity, its income, shareholders and underlying assets may involve several jurisdictions simultaneously.

UAE Corporate Tax and an ADGM SPV

An ADGM SPV should not automatically be described as a “0% tax company”.

Under the UAE Corporate Tax framework, a Qualifying Free Zone Person (QFZP) may benefit from a 0% Corporate Tax rate on Qualifying Income where the relevant statutory requirements are satisfied. Taxable income that does not meet the applicable Qualifying Income requirements may instead be subject to the relevant UAE Corporate Tax rate.

The Federal Tax Authority has also made clear that Free Zone Persons remain subject to Corporate Tax registration requirements. Accordingly, incorporation in ADGM does not by itself establish that all income of an SPV will be taxed at 0%.

The analysis may require consideration of the nature and source of the company’s income, its activities, applicable substance requirements, transfer pricing and the other statutory conditions governing QFZP treatment.

Importantly, removal of the ADGM nexus requirement does not change this analysis. The nexus requirement concerns eligibility to establish and use the SPV; it should not be confused with the separate requirements governing UAE Corporate Tax treatment.

BVI Tax Considerations

BVI structures likewise should not be assessed solely by reference to a headline domestic tax position.

Even where a particular category of income is not subject to a conventional BVI corporate income tax charge, the company, its shareholders or its underlying investments may have tax obligations elsewhere.

A BVI company managed from another country, for example, may require analysis under that country’s corporate residence or management-and-control rules. Similarly, income generated by an underlying asset may be subject to withholding tax, capital gains tax, property tax or other charges in the source jurisdiction.

Shareholders may also be affected by controlled foreign company rules, anti-deferral regimes, beneficial ownership rules or other provisions in their countries of residence.

The same principle applies to an ADGM SPV.

The relevant question is therefore not simply “Which company has the lower tax rate?” It is “How will the complete structure be taxed across every relevant jurisdiction?”

Economic Substance and International Tax Residence

Substance is another area where the comparison requires careful analysis.

International tax frameworks increasingly examine where an entity is genuinely managed, what activities it undertakes, where relevant decisions are made and whether the economic reality of a structure corresponds with its legal form.

BVI entities may be subject to the BVI’s economic substance framework depending on the activities conducted and the applicable statutory criteria. Other BVI corporate and reporting requirements may also apply irrespective of whether a particular company falls within a specific economic-substance category.

For an ADGM SPV, substance considerations can arise under the UAE Corporate Tax framework, particularly where the entity seeks to satisfy the conditions associated with Qualifying Free Zone Person status.

There is also a broader cross-border issue. A company incorporated in one jurisdiction but substantively managed from another may potentially be treated as tax resident in the latter jurisdiction under its domestic rules.

For example, incorporating an ADGM SPV while making all substantive strategic decisions from another country does not necessarily prevent that country from asserting taxing rights. The same principle can apply to a BVI company.

Place of incorporation and place of tax residence are related concepts, but they are not always the same thing.

This distinction becomes even more important following removal of the ADGM nexus requirement. The ability to establish an ADGM SPV for globally located assets without the former regional nexus does not mean that the company can be managed from any jurisdiction without potential tax consequences.

This is particularly relevant for international families and entrepreneurs who may themselves be mobile between several jurisdictions.

Banking: BVI Company vs ADGM SPV

Banking is frequently treated as though incorporation automatically determines where an entity can open an account. In practice, the position is considerably more nuanced.

A BVI company can establish banking relationships internationally, subject to the policies and onboarding requirements of the relevant financial institution. BVI entities are familiar to many international banks, but acceptance will depend on the nature of the business or investments, ownership, source of wealth, source of funds, transaction profile and countries involved.

An ADGM SPV may potentially establish banking relationships within the UAE or internationally. Its location within Abu Dhabi’s financial ecosystem can be commercially relevant where the shareholders, investments or wider family or corporate arrangements have a UAE dimension.

Following removal of the nexus requirement, an ADGM SPV may also be considered by international clients whose underlying assets and stakeholders are located outside the UAE. This does not mean that UAE banking is automatic, however, or that the absence of a UAE commercial connection will be irrelevant to a bank’s onboarding assessment.

Neither structure comes with a guaranteed bank account.

Banks conduct their own KYC, AML, sanctions and commercial-purpose assessments. A newly incorporated company with a complicated ownership chain, unclear source of funds or no coherent explanation for its choice of jurisdiction may face significant onboarding questions irrespective of whether it is incorporated in BVI or ADGM.

For that reason, banking should be considered before incorporation, rather than after the corporate structure has already been established.

Regulation, Transparency and Ongoing Compliance

Modern international holding structures operate in an environment of substantially greater transparency and reporting than existed historically.

In the BVI, a Business Company must have a registered agent, and BVI corporate legislation imposes ongoing record-keeping and filing requirements. BVI companies are also required, subject to applicable exemptions, to file an annual financial return with their registered agent. The BVI Financial Services Commission has confirmed that this annual return requirement forms part of the current corporate framework.

The BVI has also developed its beneficial ownership and corporate-information framework over time. International clients should therefore avoid assuming that establishing a BVI company means ownership and corporate information are outside regulatory reporting requirements.

In ADGM, non-exempt SPVs must appoint and maintain an ADGM-licensed Company Service Provider (CSP). The CSP’s role includes managing the incorporation process, providing the registered office and completing applicable ongoing statutory filings on behalf of the SPV.

ADGM entities are also subject to applicable corporate-record, beneficial-ownership and compliance requirements. UAE Corporate Tax registration, filing and record-keeping obligations may apply separately.

The removal of the nexus requirement does not remove or dilute these ongoing obligations. It broadens the circumstances in which an ADGM SPV can be considered, while the applicable corporate, regulatory, beneficial ownership and tax compliance requirements continue to apply.

Consequently, neither a BVI company nor an ADGM SPV should be viewed as a structure that can simply be incorporated and forgotten. Appropriate administration, accounting, tax review and corporate governance should continue throughout the life of the entity.

Privacy and Beneficial Ownership

Privacy is sometimes raised when comparing BVI and ADGM structures, but it is important to distinguish legitimate commercial confidentiality from regulatory transparency.

Both jurisdictions operate within modern frameworks addressing beneficial ownership, anti-money laundering and financial crime. Corporate-service providers, registered agents, regulators, banks and other regulated institutions may therefore require detailed information about shareholders and ultimate beneficial owners.

The extent to which particular corporate information is publicly accessible differs between jurisdictions and may also change as legislation evolves. Clients should therefore assess the current disclosure rules applicable at the time a structure is established rather than relying on historic assumptions about either jurisdiction.

For family offices and private clients, the objective should generally be appropriate confidentiality within a compliant structure rather than secrecy.

Costs and Administration

Cost inevitably forms part of the BVI Company vs ADGM SPV comparison, but the cheapest incorporation fee does not necessarily produce the most efficient long-term structure.

A BVI company will ordinarily involve government fees together with registered-agent and registered-office costs. Additional expenses may arise for accounting, legal advice, economic substance analysis, corporate administration and other services depending on the structure.

An ADGM SPV involves ADGM registration and licensing costs together with the cost of an ADGM-licensed CSP where the SPV is non-exempt. Legal, tax, accounting and other professional fees may also arise.

The correct comparison should therefore consider the total annual cost of maintaining the structure, not merely the headline incorporation fee.

More importantly, cost should be considered alongside the purpose of the structure. Saving a relatively modest amount in annual corporate costs can be a false economy if the selected jurisdiction creates difficulties with banking, financing, investors, tax treatment or future transactions.

When Might a BVI Company Be Considered?

A BVI Business Company may be considered where the parties want an established international corporate vehicle and the structure is consistent with the legal, tax, banking and commercial requirements of the transaction.

It may be particularly relevant where BVI entities are already embedded within an existing corporate or investment structure, where transaction documents or counterparties are familiar with BVI companies, or where the flexibility of a general corporate vehicle is required rather than a passive SPV.

BVI also has an extensive professional-services infrastructure built around international corporate structures and a longstanding body of corporate law and practice.

None of these factors means that BVI is automatically appropriate. Tax residence, economic substance, beneficial ownership, regulatory requirements, banking and the laws applicable to the underlying assets still require consideration.

The removal of ADGM’s nexus requirement also does not mean that existing BVI structures have become inappropriate. It simply broadens the range of circumstances in which ADGM can now be considered as another international structuring option.

When Might an ADGM SPV Be Considered?

An ADGM SPV may be considered where the principal objective is to establish a dedicated passive vehicle to hold or ring-fence assets, investments or liabilities within ADGM’s legal and institutional environment.

It may be particularly relevant to family offices, private clients, entrepreneurs, investment groups and corporate organisations that value ADGM’s English common law-based framework and its location within Abu Dhabi and the wider UAE financial ecosystem.

The removal of the nexus requirement materially broadens these circumstances. International clients can now, in principle, consider an ADGM SPV for globally located assets without needing to demonstrate the former connection to ADGM, the UAE or the GCC solely for SPV eligibility purposes.

This is particularly significant for international investors whose shareholders, directors and underlying assets are located outside the region. The absence of a UAE or GCC connection no longer, in itself, prevents the structure from being considered from an ADGM SPV eligibility perspective.

For clients already using UAE banks, investment managers, family-office services or professional advisers, there may also be practical benefits to having a holding vehicle within the same wider financial environment.

However, an ADGM SPV remains a special-purpose vehicle. Where an active operating business is required, a different corporate structure may be more appropriate.

Removal of the nexus requirement should also be distinguished from tax residence, management and control, substance and other cross-border tax considerations, which require separate analysis.

BVI Company vs ADGM SPV for a Family Office

For a family office, jurisdiction selection usually forms only one part of a much larger wealth-structuring exercise.

A family may hold operating businesses, securities, private equity investments, real estate, intellectual property and other assets across several countries. It may also have family members resident in different tax jurisdictions and succession objectives spanning multiple generations.

A BVI company may be appropriate within some family structures, particularly where existing trusts, companies or investments already use BVI entities.

An ADGM SPV may be attractive where the family wants to consolidate particular investments within the ADGM environment or use SPVs alongside an ADGM Foundation or other appropriate ownership arrangements.

The removal of the nexus requirement makes that option relevant to a broader range of international families. An ADGM SPV can now, in principle, be considered for internationally located assets without those assets, shareholders or directors having to establish the former regional nexus solely for SPV eligibility purposes.

This may be particularly relevant to internationally mobile families whose investment portfolios span several jurisdictions but who wish to use ADGM’s legal and institutional environment for their holding structure.

The appropriate answer ultimately depends on the family’s residence, domicile, citizenship where relevant, asset location, succession plan, governance objectives, tax exposure and banking requirements.

Is an ADGM SPV Better Than a BVI Company?

There is no universal answer because the two vehicles have different characteristics and can serve different purposes.

An ADGM SPV may be particularly relevant where a passive holding structure is required and the parties value ADGM’s English common law-based framework, institutional environment and position within the UAE financial ecosystem.

The removal of the nexus requirement has strengthened the international relevance of that proposition because an applicant no longer needs the former UAE or GCC connection solely to satisfy ADGM SPV eligibility requirements.

A BVI Business Company may be particularly relevant where a flexible general corporate vehicle is required, where BVI is already familiar to the parties and counterparties, or where it integrates efficiently with an existing international structure.

The appropriate decision therefore requires analysis of the purpose of the entity, assets, shareholders, tax position, governance, banking, financing and wider commercial circumstances rather than a generic ranking of jurisdictions.

Conclusion

The BVI Company vs ADGM SPV comparison is increasingly relevant for international private clients, entrepreneurs, family offices and corporate groups considering how and where to hold global investments.

Both jurisdictions provide established legal and corporate frameworks, but the vehicles should not be treated as identical. A BVI Business Company is a flexible corporate form capable of serving a broad range of international corporate purposes, subject to applicable legal and regulatory requirements. An ADGM SPV is principally a passive special-purpose vehicle intended to hold and ring-fence specified assets, investments or liabilities.

The removal of the previous ADGM SPV nexus requirement is an important development for international investors. An international client can now, in principle, consider an ADGM SPV for globally located assets without needing to demonstrate the former connection to ADGM, the UAE or the wider GCC region solely for SPV eligibility purposes.

This materially broadens the international relevance of the ADGM SPV regime. For family offices, private clients and corporate groups with assets across several jurisdictions, ADGM can now be considered on the basis of its legal, regulatory, tax, governance, banking and commercial characteristics rather than the existence of the former regional nexus.

ADGM also provides an English common law-based civil and commercial legal framework and operates within Abu Dhabi’s substantial financial and professional-services environment. Depending on the facts, a Qualifying Free Zone Person may benefit from a 0% UAE Corporate Tax rate on Qualifying Income where all applicable statutory requirements are met.

BVI, meanwhile, remains an established international corporate jurisdiction with a longstanding legal and professional-services infrastructure. Its companies continue to feature prominently in international investment, ownership and corporate structures, and the removal of ADGM’s nexus requirement does not mean that ADGM is automatically preferable to BVI.

The correct choice cannot be determined by a headline tax rate, incorporation fee or generic claim that one jurisdiction is “better” than another. The purpose of the entity, nature and location of the assets, residence of shareholders, place of management, tax position, substance, banking, governance, financing and expectations of investors and counterparties should all form part of the analysis.

For some structures, those considerations may support the use of a BVI Business Company. For others, an ADGM SPV may provide an appropriate institutional and corporate framework. The removal of the nexus requirement simply means that the absence of a UAE or GCC connection is no longer, in itself, an obstacle to considering an ADGM SPV for an international holding structure.

The most effective international holding structure is ultimately one designed around the assets, stakeholders and commercial objectives it is intended to serve, while remaining legally robust, tax-compliant and administratively sustainable over the long term.

FAQs

What is the main difference between a BVI company and an ADGM SPV?

A BVI Business Company is a general corporate vehicle incorporated under BVI company legislation, while an ADGM SPV is principally a passive special-purpose vehicle designed to hold and ring-fence specified assets, investments or liabilities. An ADGM SPV cannot be used to conduct an operational business or hire staff, making the intended activity of the entity a fundamental part of the comparison.

Can an ADGM SPV hold international assets?

Yes. Following the removal of the previous nexus requirement, an ADGM SPV can, in principle, be considered for internationally located assets without needing to demonstrate the former connection to ADGM, the UAE or the wider GCC region solely for SPV eligibility purposes.

The removal of the nexus requirement should not, however, be confused with the tax or legal treatment of the underlying assets. The laws of the jurisdictions in which those assets are located, together with applicable tax residence, substance, reporting, withholding tax and other cross-border requirements, should still be considered separately.

Does an ADGM SPV still need a UAE or GCC nexus?

No – the ownership, asset and economic nexus requirement has been removed. However, an ADGM SPV must still maintain an authorized signatory who is a UAE resident or GCC national for statutory administration, which is a narrower requirement than the former nexus test.

This does not remove other ADGM incorporation, compliance, beneficial ownership, CSP or regulatory requirements, nor does it determine the tax residence of the company.

Can a BVI company hold assets outside the BVI?

BVI Business Companies are widely used within international ownership and investment structures. Whether a BVI company can hold a particular asset, and the consequences of doing so, will also depend on the law of the jurisdiction in which that asset is located.

Which structure is better for international banking?

Neither structure guarantees easier banking. Banks assess companies individually according to ownership, business or investment purpose, source of funds, source of wealth, expected transactions and jurisdictional exposure.

An ADGM SPV’s location within the UAE financial environment may be relevant for some clients, while BVI companies are familiar to many international institutions. The appropriate banking strategy should therefore be considered before incorporation.

Which structure is better for a family office?

The appropriate structure depends on the family’s assets, residence, succession objectives, governance, tax position and banking requirements.

An ADGM SPV may integrate with wider ADGM private wealth structures, while BVI companies may fit efficiently within established international trust or corporate arrangements. The removal of the ADGM nexus requirement means that an international family no longer needs the former UAE or GCC connection solely to consider an ADGM SPV from an eligibility perspective.

Neither structure is universally preferable.

Does a BVI company require a registered agent?

Yes. Formation and maintenance of a BVI Business Company involves a BVI registered agent in accordance with the applicable BVI corporate framework.

Does an ADGM SPV require a Company Service Provider?

A non-exempt ADGM SPV must appoint an ADGM-licensed Company Service Provider. Certain SPVs may fall within prescribed exemptions, so the status of the particular entity should be determined against the current ADGM rules.

Does removal of the ADGM nexus requirement remove substance requirements?

No. The nexus requirement and substance or tax-residence considerations are separate issues.

Removal of the nexus requirement means that an applicant no longer needs to demonstrate the former ADGM, UAE or GCC connection solely for SPV eligibility purposes. It does not remove applicable UAE Corporate Tax requirements, foreign tax-residence rules, management-and-control considerations, substance requirements, transfer-pricing rules or other cross-border tax obligations.

Can I move an existing BVI structure to ADGM?

Potential restructuring options may exist depending on the particular entities and circumstances, but moving an existing structure should not be treated as a simple administrative exercise.

Corporate-law requirements, tax consequences, asset transfers, contracts, financing arrangements, banking and potential exit or entry charges should be reviewed before implementing any migration or restructuring. The removal of ADGM’s nexus requirement may broaden the circumstances in which ADGM can be considered, but it does not mean that transferring an existing BVI structure will necessarily be appropriate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about specific circumstances.

While this article is accurate as of the date of publication, laws and regulatory requirements may change.