Founded in 2015, Abu Dhabi Global Market (ADGM) is one of the MENA region’s most successful and well-structured international financial centres. Since its inception, ADGM has quickly become a vital enabler of finance and investments, connecting Abu Dhabi, MENA, South Asian and Asian economies with international markets.
Located in a free zone in the UAE on Al Maryah Island Abu Dhabi, ADGM is comprised of the Financial Services Regulatory Authority (FSRA), the Registration Authority (RA), the Courts, the ADGM Arbitration Centre (ADGMAC) and the ADGM Academy (ADGMA).
Championing innovation through digital-driven offerings
ADGM and its respective authorities provide a flexible and stable legal and business regulatory framework based entirely on English Common Law. ADGM offers a modern business infrastructure and holistic ecosystem that support established companies, startups, financial institutions and SMEs; making it easy to do business.
With more than 2,800 registered entities, ADGM’s community includes international business and financial institutions, treasury centres, professional services firms, global investors, tech startups and more. It is home to global powerhouses including Citibank, HSBC, Siemens, BNP Paribas, UniCredit, Standard Chartered, Bank Lombard Odier, the Mirabaud Group, the Intercontinental Exchange’s ICE Futures Abu Dhabi Exchange, Plug and Play, Techstars and Hub71, the global tech ecosystem powered by Mubadala Investment company.
Since its inception, ADGM has sought to embrace and advocate digitisation as a critical business enabler. The ADGM Courts are fully digital where the filing, hearing and arbitration of civil disputes and cases can be heard completely online and remotely. The ADGM RA’s processes are highly digital where licence applications and business registrations can be processes completely online. The ADGM FSRA has put in place a comprehensive suite of regulatory regimes that are conducive to a wide range of digital financial services, including digital banking and payment service providers, digital securities offerings, digital assets exchanges and intermediaries, and robo-advisors.
In early 2019, Mubadala Investment Company, Abu Dhabi Investment Office, ADGM and Microsoft set off to establish the innovative Hub71 tech start up ecosystem where experimentation and innovation are encouraged and supported.
As Derick Smith, Founder of blockchain firm AmmbrTech, says: “The UAE has been by far the easiest of the seven countries in which I’ve opened a business. Abu Dhabi in particular with Hub71 was absolutely sterling – the support, the speed at which things happen. It was so smooth. The visas, the willingness of people to talk to you, have meetings, assist you – all of that was brilliant.”
Robust regulatory frameworks as a key enabler of progress
A “regulatory body” may not seem as an obvious incubator of innovation. However, for tech firms in the financial services sector, research and development is vital to product and service development. The regulatory sandbox (“RegLab”) is a framework set up by a regulator to facilitate live experiments run by FinTech startups and other innovators in a controlled environment under a regulator’s supervision. This is crucial to ensure new ideas take consumer protection into consideration.
As Ola Doudin, Founder of FinTech company BitOasis, recalls: “ADGM was our first choice as a regulator and jurisdiction for our exchange headquarters. BitOasis wouldn’t be able to continue innovating and leading the way without the regulatory set up that ADGM offers. Having a tech ecosystem like Hub71 connected to banking and business regulators means I can focus on growing my business with the knowledge that there is a robust regulatory framework, essential for businesses like ours.”
Some of the best and most forward-thinking regulatory bodies around the world have set up sandboxes to allow tech companies to have the space and support they need to invent. While regulation and invention may seem like unlikely bedfellows, as any good engineer or inventor knows, a controlled environment is where the magic happens.
Overview, inception and evolution
Today, ADGM has the most comprehensive suite of regulatory frameworks in the region, catering to a diverse range of digital financial services spanning from venture capital, digital banking and payments, to digital assets and securities.
ADGM launched the Digital Lab in 2020, which is an enhancement of the RegLab. The Digital Lab provides a platform for financial institutions and FinTech innovators to come together to experiment on solutions in a fully digital environment. The Digital Lab also features a marketplace for open collaboration between innovators, institutions, and regulators in the financial ecosystem to facilitate testing and adoption of innovative digital financial products and services that can benefit the industry and the wider region.
Wai Lum Kwok, Senior Executive Director of Capital Markets at ADGM’s Financial Services Regulatory Authority, says: ”The Digital Lab allows regulators and the ADGM team to gain real-time insights into the success of startups through online dashboards and cloud access, which in turn gives them a more in-depth view of how the technology is used.
By providing the ecosystem with access to resources such as data, APIs, system images and reference architectures, the ADGM Digital Lab enables participants to validate their new solutions with a replication of their own technology stack more readily,” Wai Lum explains.
However, the Digital Lab is not exclusive to startups and tech companies. The platform also caters to technology entities – be it FinTechs or more established organisations – that do not need a licence from ADGM to collaborate with financial entities in a truly inclusive environment.
A safe well-regulated environment
The ADGM tech startup license is sector-agnostic and is provided by one of two international financial centres outside of the UK that operate under English Common Law, making it easy for British and Commonwealth startups to simply plug and play.
As John Hensel, Founder of FinTech business Securrency, says: “Government and industry leaders have established a remarkable set of resources to support startups and SMEs. The conditions are incredibly inviting and, as a result, attract some of the best new ventures to now call Abu Dhabi home. There are great founders and teams in the UAE to invest in. Don’t underestimate the opportunity for great returns and impactful outcomes by investing in the UAE.”
Startup founders looking for a safe, well regulated environment to test out new ideas should consider applying to join Hub71’s growing community of innovative tech startups.
Apply to be a part of this global tech community – applications for the Hub71 Incentive Programme are open now.