Abu Dhabi Global Market Strengthens Legal and Corporate Services Framework

The Abu Dhabi Global Market (ADGM) recently introduced a set of new regulations to streamline and enhance business operations in the financial free zone. This update underlines ADGM’s commitment to a transparent, efficient, and globally competitive business environment. The new framework includes two rule sets (i) the Commercial Licensing Regulations (Conditions of License and Branch Registration) Rules 2025 and (ii) the Commercial Licensing Regulations (Controlled Activities) Rules 2025, which together raise the standards for legal, tax, and corporate service providers operating in ADGM. According to ADGM’s Registration Authority (RA), the changes strengthen the regulatory environment by:

1. Introducing a new regulated (“controlled”) activity for tax services
2. Updating licensing requirements for providers of legal and tax service
3. Defining ongoing compliance obligations for licensed legal and tax firms
4. Enhancing governance for corporate service providers through mandatory conflict-of-interest policies

 

I. Legal Service Providers – Higher Bar for Licensing

Under the new rules, “providing legal services” in ADGM is explicitly deemed a controlled activity when carried out as a business. In simple terms, any firm offering legal advice, drafting legal documents, representing clients in proceedings, or negotiating legal rights on someone’s behalf must be licensed by ADGM. (Activities like serving as a judge, mediator, arbitrator, or other neutral role are not considered “providing legal services” in this context).

 

To obtain and maintain a legal services license in ADGM, law firms now face several new requirements. Every licensed firm must appoint a managing partner (or equivalent senior lawyer) with at least eight years of post-qualification experience. Firms also must maintain a registered office within ADGM, carry professional indemnity insurance, and file an annual return to the RA. Additionally, legal service providers are expected to adhere to prescribed principles of conduct set by the regulator.

 

II. Tax Service Providers – New “Controlled” Activity

A new controlled activity for tax services has been introduced. This means companies offering tax consulting or advisory services in ADGM now require a specific license, similar to legal service providers. To qualify, at least half of the firm’s senior management must be suitably qualified tax professionals (e.g. holding recognized tax or accounting qualifications). Tax advisory firms must also obtain and maintain professional indemnity insurance and comply with defined conduct principles to ensure independent and ethical advice. By raising the bar for expertise and accountability in tax services, ADGM aims to boost confidence in the quality of tax advisors operating in the free zone.

 

III. Corporate Service Providers – Stronger Governance

Corporate service providers – companies that assist with entity formation, registered office services, and related corporate administration – are also impacted. The new rules require these providers to implement robust governance policies, specifically to manage conflicts of interest. In practice, a licensed company service provider in ADGM must have clear procedures to identify and address any conflicts between its duties to clients and its own interests. This addition helps ensure that corporate service firms act with integrity and put client interests first, further aligning ADGM with international best practices in governance.

 

IV. Transitional Periods and Compliance

Notably, the updated regulations took immediate effect for new applicants and newly licensed providers as of their enactment. However, ADGM has provided transitional periods for existing license holders. In other words, businesses already licensed in ADGM have a grace period to meet the new requirements before full compliance is expected. The RA has not publicly specified the exact timeline in this announcement, but it has assured that sufficient time will be given for firms to align with the updated rules. All affected service providers are encouraged to begin implementing the necessary changes as soon as possible, since regulators expect prompt progress toward compliance.

 

V. Conclusion

Overall, ADGM’s 2025 regulatory enhancements significantly raise the bar for professional service firms in the jurisdiction. By tightening licensing criteria, mandating experienced leadership, and enforcing insurance and governance standards, ADGM is reinforcing its reputation as a well-regulated and trusted business hub. These changes not only protect clients and stakeholders but also promote greater market confidence in the services offered within ADGM. For legal, tax, and corporate service providers, the message is clear: higher standards of professionalism and accountability are the new normal.

 

By the Galadari Corporate Practice Team. For more information about these regulatory updates or assistance with ADGM compliance and licensing, please feel free to reach out to our team.

 

	Ahmed Ziad Galadari Director & Advocate ahmed.ziad@galadarilaw.com
	Khaled Mehdi Senior Associate khaledmehdi@galadarilaw.com