The Situation
An asset manager needed an ADGM special purpose vehicle to sit beneath a closed-end investment fund it managed. The fund would own the SPV outright.
The complication was that the fund could not simply pay to have a company created. Under its own governing rules, the fund’s depositary would not approve the fund paying for something that was not yet fund property.
“A company that does not exist cannot be an asset of the fund.”
— The constraint that shaped the whole matter. The fund could not fund its own incorporation.
The obstacle was never the registry. It sat inside the fund’s own rules, and it had to be solved before a single form was filed.
What Made It Difficult
The paying entity and the acquiring entity were different parties. That had to be reflected correctly in the contract: the management company engaged and paid in its own capacity, and the fund appeared only as buyer under the share sale agreement. Getting this wrong would have put the depositary’s objection straight back into the structure.
The payment route did not exist in conventional form. The fund had no foreign currency account. Payment therefore had to be made in local currency, converted, and routed through a regulated payment agent — with the exchange rate mechanism, the value date and the point at which payment counted as made all specified in the contract, because each of them carried real risk to one side or the other.
The closing documents had to travel. The completed corporate documents needed attestation by the UAE foreign ministry and legalisation at the buyer’s consulate before they were of any use to the depositary. Documents that are legally perfect in ADGM are worth nothing to a foreign regulator until they have been through that chain.
None of this is administrative. Every one of them is a structuring question, settled in the contract or not settled at all.
The Circle — and How We Broke It
The vehicle had to exist before the fund could own it, and the fund could not pay for it to exist. That is a circular problem, and it is a structuring question, not an administrative one.
Cannot pay for what is not yet fund property
⟵ waits
Cannot be fund property until it exists
So the SPV needed an initial shareholder who was not the buyer — someone to hold the shares from incorporation until the transfer, who would satisfy the ADGM registry as a genuine shareholder and director, and whose subsequent sale of the shares to the fund would be a clean, registrable transaction rather than something that looked like a device.
The management company engaged and paid in its own capacity; the fund appeared only as buyer under the share sale agreement. Who pays and who owns were separated, and kept separate.
How It Was Structured
The sequence that came out of that analysis, step by step.
A new ADGM SPV was incorporated with a single initial shareholder and director, provided by the client, holding 100% from formation.
Obtained for the shares, so the holding was recognisable as an instrument in the fund’s own reporting.
Opened with a primary institution, with alternatives run in parallel rather than sequentially.
100% of the shares transferred to the fund, and the change of shareholder registered with the ADGM authority — the registration, not the signature, being the point at which the transfer became real.
Registry
A deeming provision treated silence on a circulated draft, after a defined period, as agreement — so the transaction could not be stalled indefinitely by a party simply not replying. And delivery was defined as the moment scans were sent and originals made available, so that a refusal to collect could not defer a payment obligation.
The completed corporate documents attested by the UAE foreign ministry and legalised at the buyer’s consulate, so that the closing set was of use to the depositary.
The registration, not the signature, is the point at which the transfer becomes real.
The closing set. Previews illustrative; sensitive data does not appear.
Who pays
and who owns
are separate questions.
The SPV formed, and company bank accounts opened
Agreement of the share sale documentation
Registration of the shareholder change, with the attested documents in the buyer’s hands
The engagement was staged against those milestones, with payment tied to what had actually been delivered. This case describes how the matter was structured; it reports no outcome.
What We Would Tell the Next Client
Fund rules constrain structure before regulators do. The obstacle here was not ADGM. It was the fund’s own depositary and what it would approve. That question should be asked at the first meeting, because it determines the shape of everything after.
“Who pays” and “who owns” are separate questions. Conflating them is what created the problem, and separating them cleanly in the contract is what solved it.
We attached the milestones to the registry event, not the signature. The transfer became real when the shareholder change was registered, so that is where the payment milestone sat.
We put the settlement mechanics in the agreement rather than leaving them to practice. With no conventional route available, the rate basis, the value date and the moment payment counted as made were all specified — otherwise one side would have carried currency and timing risk nobody had priced.
We reconciled both language columns before signature. Where a bilingual document is negotiated in only one column, the parties can sign believing they have agreed different deals — and one of them will be right. It is the most common serious defect we see in cross-border agreements.
Details are altered or omitted to protect the client: no client, fund or manager, no jurisdiction of the fund, no nationality of the initial shareholder, and no agreement number, fee or date appears. What is preserved is the shape of the problem and the work done. It is general information, not legal advice — each case should be assessed individually.