Adgm Digital Banking License| Fsra| Category 1 License - 10 Leaves

By Author: Nitya
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The ADGM is an upcoming financial centre in the MENA region for business and fintech. The quality of ADGM’s independent regulator, the prevailing common law framework, excellent infrastructure and tax efficiencies make it the perfect base to take advantage of the rapidly growing demand for financial and business services in Abu Dhabi and the greater MENA region.

Why setup a financial services firm in the ADGM?
The ADGM is one of two onshore financial centres in the UAE. Established in 2015, it quickly rose through the rankings and is now counted as one of the top 25 financial centres in the world. ADGM’s innovative SPV regime, its initiatives in the fintech space and its issuance of the region’s first cryto-asset regulatory framework, have all contributed to its success.
Specific Advantages:
Here are some specific advantages of establishing in the Abu Dhabi Global Market.
LEGAL AND REGULATORY FRAMEWORK:
Legal framework supports cross-border activities
100% foreign ownership permitted
No restriction on foreign talent or employees
No restrictions on capital repatriation
...
... TAX BENEFITS:
Zero tax for 50 years on profits, capital or assets from 2004
Zero tax on employee income
COUNTERPARTY CONFIDENCE:
Well regarded, independent regulator
Independent, English-speaking, common law judicial system
Distinct from the UAE legal system
Risk-based regulatory approach

DIVERSE ECOSYSTEM:
Central to regional deal making
High concentration of international firms, investment funds, wealth management firms, banks, and financial institutions
World-class regional and international law and auditing firms, and other professional services
A growing fund domicile in the region
GEOGRAPHIC EPICENTRE:
Management offices, holding companies and family offices are located closer to the assets they own or manage
The Middle East, Africa and South Asia (MEASA) is increasingly the centre of gravity for the global economy
The UAE plays a central role in the growing South-South trade, principally between Asia and Africa
Well-positioned to harness the potential of emerging markets.
ADGM Digital Banking License
The ADGM recently announced its intention to accept applications for digital banking licenses. A digital bank accepts deposits, provides credit, and engages in related financial services activities. This is done primarily through online, digital or electronic means, in contrast to physical interaction with customers as in the case of conventional banks. Digital banks are financial institutions that seek to provide novel customer and transactional solutions.
The Financial Services Regulatory Authority, or FSRA, reviews applications from firms who wish to carry out financial services from the ADGM. For the ADGM digital banking license, the regulators aim to accept applications from existing banking institutions, and from firms with innovative value propositions.
Category 1 License ADGM Capital requirements
The category of licence determines the amount of base capital required. The capital requirement for a Category 1 Digital Banking License is $10 million. This is the base capital – It is likely, however, that the Risk-Based Capital Minimum will apply as the higher requirement. This is calculated on the basis of the totality of risks the digital bank will face in the course of its business and operations, and includes core Tier 1 (CET1) and Tier 1 capital adequacy ratios of 6% and 8% respectively, with a Capital Conservation Buffer of 2.5%, along with a minimum leverage ratio of 3%.
ADGM Authorisation Process
Applications for Digital Banking licenses will go through a rigorous process of authorisation. Applicants will have to demonstrate a credible, comprehensive and sustainable business plan, adequate control mechanisms and robust compliance processes.
The following are mandatory appointments:
1. Licensed Directors – the FSRA will review the composition of the Board
2. Senior Executive Officer – Must be UAE resident
3. Compliance Officer – Must be UAE resident
4. Money Laundering Reporting Officer – Must be UAE resident
5. Finance Officer
6. Senior management positions – Business Heads, Chief Risk Officer, Chief Technology Officer

Costs
1. Setting up an AGDM Digital Banking License involves the following interactions:
2. Financial Services Regulatory Authority (FSRA)
3. Application fee – from US$ 30,000
4. Annual fee – from US$ 30,000
Registration Authority (RA)
The RA helps to set up the legal structure of the ADGM Firm. In most cases, this would be a Private Company Limited by Shares. Shareholders can be individual, or corporate. The costs for setting up such a company are:
1. Application for reserving a name: US$ 200
2. Application for Incorporation of a Private Company Limited by Shares: US$ 1,500
3. Commercial License on Incorporation: US$ 4,000 (annual fee)
4. Business Activity fees: US$ 9,000 (annual fee)
Data Protection
The data protection notification is part of the process of registering a new entity in the ADGM. The costs involved are as follows:
1. Registration - US$ 300
2. Annual renewal – US$ 100
Office spaces
Every entity registered in the ADGM is required to lease a physical office. You can choose from business center options, or physical spaces within the ADGM.
Here is an indication of the prevailing rates:
1. Business Centre – from a one-desk office at US$ 19,000.
2. Fitted Offices – from US$ 55 per square foot.
Visas
1. Establishment Card Application – US$ 273
2. E-channel – US$ 1,100 (one-time)
3. E-channel deposit – US$ 1,360
4. Visas (per visa) – from US$ 1,500
Our Services:
We provide turnkey services for ADGM Digital Banking License. From fintech consulting, to assistance in authorisations, to assistance in preparation of the legal documentation, 10 Leaves helps you navigate the FSRA Rulebook and submit an application that is comprehensive, complete and compliant.

Our services include assistance in:
• Reviewing the business model and advice on the applicable regulatory framework;
• Preparation of the Regulatory Business Plan and comprehensive financial projections;
• Preparation of all policies, processes and manuals required;
• Provision of Outsourced Compliance Officer and Outsourced Finance Officer services;
• Finalising the legal structure, including holding company setup and customisation of Memorandums; and
• Finalisation of leased space, bank account opening and obtaining Financial Services Permissions.

Get in touch today!