Crypto
Jun 29, 2025
Starting a business in the ADGM can be overwhelming, especially if you're unsure about obtaining the necessary licenses. For crypto professionals, the stakes are high, as choosing the proper license can make or break your operations. The good news is that this guide UAE crypto will help you find valuable insights on ADGM license categories for crypto firms, enabling you to achieve your goals, such as obtaining expert legal solutions.
Ape Law's web3 legal experts can help you achieve your goals, including obtaining expert legal solutions tailored to your needs. This groundbreaking tool connects you with experienced legal professionals who understand the intricacies of crypto regulations in the UAE.
Table of Content
5 ADGM License Categories and Their Advantages
Category 1 – Full Banking: The King of ADGM License Categories
The ADGM Category 1 license is the most comprehensive option for firms looking to establish a banking operation in the UAE. Also known as a full banking license, it enables institutions to accept deposits, provide lending services, offer unrestricted profit-sharing investment accounts, and conduct comprehensive banking operations.
Minimum capital requirement
AED 36,727,150
Advantages
The Category 1 license provides the most comprehensive range of banking services. It is ideal for establishing a conventional or digital bank in the UAE. Institutions under this category can attract retail or institutional depositors, offer credit facilities, and scale to become a full-service financial entity. The broad scope and high market trust make this category suitable for those seeking long-term, wide-ranging financial operations.
Category 2 – Market Making & Credit: The Go-To License for Active Traders
The ADGM Category 2 license is designed for firms that want to engage in active financial market participation without taking deposits. Also known as the market-making and credit license, it allows for the creation of credit products and direct trading strategies.
Minimum capital requirement
AED 7,345,430
Advantages
This category is suitable for institutions focused on active financial market participation, excluding those that accept deposits. It allows for the creation of credit products and direct trading strategies. The capital requirement is lower than that of full banking, making it attractive to trading firms, credit platforms, and market intermediaries seeking to operate with flexibility in the capital markets.
Category 3 – Brokerage, Custody & Asset/Fund Management: The Hub for Financial Services
The ADGM Category 3 license is particularly suited for firms looking to operate in the financial services sector. It allows for a range of activities, including brokerage, custody, and asset management.
Minimum capital requirement
AED 1,836,358 (for brokerage activities)
Advantages
The Category 3 license contains three subcategories, each with distinct objectives. The broad scope of activities under this category provides firms with the flexibility to establish themselves in the market and expand their operations over time.
3A – Brokerage (Dealing in Investments)
Permitted activities
Execution of trades as an agent or matched principal on behalf of clients.
Minimum capital requirement
AED 1,836,358
Advantages
Ideal for brokerage firms that want to buy or sell securities on behalf of clients. This license enables businesses to begin with core trading services and later expand into portfolio or asset management.
3B – Custody & Trustee Services
Permitted activities
Safeguarding client assets and acting as a trustee for funds and investments.
Minimum capital requirement
AED 14,690,860
Advantages
This license is suited for entities that need to provide secure custody or trustee services. With a high capital threshold, it ensures strong operational governance, asset protection, and regulatory scrutiny, appealing to institutional clients and fund platforms.
3C – Asset & Fund Management
Permitted activities
Discretionary asset management and the management of collective investment funds, with optional advisory services.
Minimum capital requirement
AED 918,179 (or AED 183,636 for Exempt or Qualified Investor Funds with no client money handling)
Advantages
This is a popular category for asset managers, fund administrators, and investment firms. It enables the management of client portfolios and the operation of private or public funds under the oversight of the FSRA. For those dealing with professional or exempt clients, the reduced capital requirement offers easier market entry.
Category 4 – Advisory & Arranging (Fintech Sandbox): The Best License for Startups
The ADGM Category 4 license is a unique option that allows for a range of advisory and arranging activities within a regulatory sandbox. It offers the lowest entry barrier of all the categories and is ideal for fintech startups, advisory firms, insurance agents, and investment introducers.
Minimum capital requirement
AED 36,727 (can range up to AED 183,636–550,907 if handling client funds or accounts)
Advantages
This category offers the lowest entry barrier and is ideal for fintech startups, advisory firms, insurance agents, and investment introducers. It supports innovation through a regulatory sandbox, making it easier to test new business models without facing high capital or compliance costs. Businesses benefit from full foreign ownership, 0% corporate tax for 50 years, and an English common law framework, which makes it highly appealing to global investors and digital-first financial service providers. Governance standards still apply, including the need for resident senior officers and professional indemnity insurance.
Category 5 – Islamic Finance Institutions: The Sharia-Compliant Finance License
The ADGM Category 5 license is designed for firms that want to operate Sharia-compliant financial services in Abu Dhabi. It allows institutions to conduct all conventional financial activities—such as advising, arranging, custody, and fund administration—under Sharia-compliant models.
Minimum capital requirement
AED 36,727,150
Requirements
Firms must establish a Sharia Supervisory Committee, perform annual Sharia audits, and implement purification procedures to handle any non-compliant income.
Advantages
This license enables firms to offer fully Sharia-compliant financial services, from investments to banking. It is aligned with Abu Dhabi’s strategic goal to become a regional hub for Islamic finance. Institutions under this category enjoy the same regulatory confidence and market trust as conventional banks, making it a powerful tool for firms looking to serve the Islamic finance market both locally and internationally.
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How to Choose an ADGM License
1. Use Ape Law to Choose Your ADGM Category
Establishing a cryptocurrency enterprise in the UAE can be convoluted, but Ape Law makes the process smooth. As experts in Web3 law, we handle crypto licensing, business structuring, and compliance to help you focus on growth. Whether you’re launching a new coin, token, or NFT, expanding operations, or optimizing for tax efficiency, our team ensures a smooth and legally sound setup. Ready to establish your business in the UAE? Book a free consultation today to navigate the legalities of setting up a Web3 business in the UAE with ease!
2. Clarify Your Business Activities and Objectives
First, determine whether your business operates in the financial services sector (banking, trading, asset management, fintech) or non-financial/professional services (tech, consulting, special purpose vehicles, legal, accounting). ADGM categorizes licenses based on your core activities. This categorization ensures you apply for the permit that aligns with your intended operations.
3. Choose the Right Legal Structure
ADGM supports a range of entity types: limited liability companies, limited liability partnerships, public limited companies, branches of foreign firms, and special purpose vehicles. Limited liability partnerships are suitable for professional or advisory services, while special purpose vehicles are ideal for structured finance or isolated transactions. A branch structure can be used by established foreign entities. Your selected structure affects your regulatory obligations and eligibility for specific license categories.
4. Map Activities to FSRA License Categories
Use the FSRA’s activity-based framework to match your services to a license category. Each category corresponds to increasing levels of capital, supervision, and permissible activities.
Category 1 involves full banking, where a firm is expected to take deposits or manage unrestricted investment accounts. Category 2 includes market making, proprietary trading, or credit issuance. Categories 3A/B/C involve brokerage, custody/trust services, or discretionary asset/fund management. Category 4 includes advisory or arranging deals; fintech startups can use the RegLab sandbox. Category 5 encompasses Islamic finance activities that adhere to full Sharia compliance.
5. Assess Capital, Governance, and Compliance Requirements
Distinct capital thresholds and regulatory obligations accompany each license category. Category 4 is the most accessible, starting at USD 10,000 and designed for low-risk fintech or advisory services. Moving up, Categories 3A–3C involve mid-range capital and oversight for handling client assets or managing funds. Categories 1, 2, and 5 require more substantial capital, a robust governance framework (e.g., senior management roles, risk, MLO, and CO appointments), and significant prudential measures, such as internal capital adequacy and recovery plans.
6. Anticipate Scaling and Category Transitions
ADGM allows for license upgrades or category changes, but the process requires updating your business plan and financials, as well as obtaining FSRA approval. If you anticipate evolving into related areas—like starting with advisory and later adding asset management—consider whether initially choosing a higher category would simplify future growth.
7. Consider Governance, Innovation, and Ecosystem Integration
Category 4 (Advisory & RegLab) is tailored for innovation, offering fast product testing and lean governance models under sandbox conditions. For fund managers (Category 3C), ADGM provides robust infrastructure, a clear regulatory framework, and geographically friendly time zones for global investors. Categories 1 and 5 require experienced senior executives (CEO, CRO, CFO), comprehensive risk frameworks, and, for Islamic finance, Sharia boards and annual audits.
Real-world examples: a fintech advisory or platform that doesn’t hold client funds fits squarely into Category 4, benefitting from lower capital needs and sandbox support. A robo-advisor or discretionary asset manager should consider Category 3C, particularly if it deals with professional or exempt clients, where capital and governance are moderate. Firms offering custody or trustee services should reference Category 3B, as it has higher capital and operational standards. Entities planning to operate as a retail or Islamic bank would typically look to Category 1 or Category 5, which require substantial capital and prudential controls.
Benefits of Setting Up in ADGM
Who Can Benefit from an ADGM License?
The Abu Dhabi Global Market (ADGM) offers a robust regulatory framework for businesses looking to operate in the MENA region. The ADGM has established itself as a prominent global hub for fintech and virtual assets. In 2021, the ADGM issued its first set of regulations for cryptocurrencies and digital assets, allowing firms to apply for a license to operate in the financial free zone.
The legal framework supports cross-border activities. 100% foreign ownership is permitted, with no restrictions on capital repatriation or the employment of foreign nationals. An example of a firm that benefited from an ADGM license is Anglo-Gulf Trade Bank (AGTB). This digital trade finance bank was launched as a joint venture between Mubadala and Anglo-Gulf Trade Bank Limited, choosing ADGM for its legal clarity and global integration.
Why ADGM? It leveraged the English standard law system, essential for cross-border trade financing and the enforceability of international contracts. The result? Quick launch, compliant structure, and strong investor confidence.
Tax efficiencies for businesses operating in ADGM
Businesses operating in the ADGM benefit from significant tax efficiencies, making the free zone an attractive prospect for firms looking to establish a presence in the region. There is zero tax for 50 years on profits, capital, or assets. There is also zero tax on personal income. An example of a firm that set up in ADGM to take advantage of the tax benefits is a multinational fund manager.
International hedge funds and asset managers—such as Dalma Capital—chose ADGM due to its zero-tax regime for 50 years on profits and capital gains. The result? They could offer tax-neutral structures to investors, helping them compete globally with financial hubs like Luxembourg or the Cayman Islands.
Well-regulated with a focus on innovation
The ADGM is a well-regarded, independent regulator. It has an English-speaking, standard law judicial system that is distinct from the UAE civil courts. The risk-based regulatory approach is both flexible and robust, enabling innovation in FinTech and professional services. Global firms, such as KPMG and PwC, as well as other major players, have chosen ADGM due to its risk-based regulatory framework. The Financial Services Regulatory Authority (FSRA) is well-respected for its independence and transparency.
The ADGM ecosystem supports growth.
The ADGM offers a dynamic ecosystem that supports the growth of businesses operating in the region. The free zone has a high prominence in deal-making in the area, with a concentration of international financial institutions, world-class regional and international professional services, and a growing fund domicile.
An example of this is Hub71, Abu Dhabi’s tech ecosystem, hosted in ADGM, which supports over 200 startups. These startups benefit from access to investors, legal support, tax benefits, and proximity to regional deal-making. Global players, including Microsoft, SoftBank, and Mubadala, are active partners.
Strategic geographic location
The ADGM is strategically positioned to serve markets worldwide. 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 center of gravity for the global economy. The UAE plays a central role in the growing South-South trade, principally between Asia and Africa, and is well-positioned to equip the potential of emerging markets.
An example of this includes holding companies and family offices from India, KSA, and Africa. Many Indian and African HNWIs and conglomerates are setting up holding companies in ADGM to be geographically closer to MEASA markets, benefiting from time zone overlap, trade connectivity (Asia-Africa corridor), and regulatory trust and global reach.
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Types of Entities in ADGM
1. Public Company Limited by Shares
A Public Limited Company, or PLC, has the right to offer its shares to the general public. A PLC formation requires at least two shareholders (one of whom must be an individual), a minimum share capital of USD 50,000. Additionally, a company secretary is required. Significantly, shareholder liability is limited to the amount of their shareholding.
2. Private Company Limited by Shares
A Private Limited Company (LTD) is privately owned and cannot offer shares to the public. An LTD requires at least one individual shareholder and one director (who can be either an individual or a corporate entity). There is no minimum capital requirement, and a company secretary is optional. The liability of the shareholder is limited to the amount paid or unpaid on the shares held by the shareholder.
3. Private Company Limited by Guarantee
A Private Company Limited by Guarantee is ideal for member associations. This structure does not distribute profits or divide assets into shares. It requires one guarantor and one director, with no minimum share capital or secretary requirement.
4. Restricted Scope Company
A Restricted Scope Company is designed for entities prioritizing confidentiality and lighter compliance (e.g., family offices). This entity allows limited public disclosure. It can only be formed under specific conditions, such as being a subsidiary of a publicly listed group or as a subsidiary of a company formed by Emiri decree or by an individual or members of the same family.
5. Private Company Unlimited with or without Shares
Unlimited companies carry no restriction on shareholder liability. While not requiring a minimum share capital, they demand one shareholder and one director. Secretary service is optional.
6. Branch of a Foreign Company
Foreign companies can establish a small presence in ADGM through a branch. This requires one authorized signatory.
Setting up a crypto business in the UAE can be complex, but Ape Law makes it smooth. As Web3-native legal experts, we handle crypto licensing, business structuring, and compliance so you can focus on growth. Whether you’re launching a new coin, token, and/or NFT, expanding operations, or optimizing for tax efficiency, our team ensures a smooth and legally sound setup. Ready to establish your business in the UAE? Book a free consultation today to navigate the legalities of setting up a Web3 business in the UAE with ease!
Book a Free Consultation to Navigate the Legalities of Setting up a Web3 Business in the UAE
The UAE has emerged as a leading destination for crypto and blockchain companies. Establishing a crypto business in the UAE provides access to a thriving crypto ecosystem, state-of-the-art infrastructure, and a robust regulatory framework. The ADGM, one of the UAE’s top crypto authorities, has created an attractive licensing regime for crypto businesses, enabling them to operate in a secure and regulated environment.
Learn About the Benefits of Obtaining an ADGM Crypto License
There are various benefits to obtaining an ADGM crypto license. For one, it helps businesses establish credibility and build trust with customers and partners. This is especially important in the crypto sector, which has faced significant scrutiny due to the prevalence of scams and fraudulent schemes. An ADGM crypto license signals to the world that your business is operating legally and adhering to the highest regulatory standards.
Explore the Different ADGM License Categories
The ADGM offers three distinct license categories for crypto businesses, including:
Financial Services Permission
Operating a Crypto Business
Crypto Asset Activities License
Each of these license categories has a different focus. For instance, the Financial Services Permission is for businesses that wish to provide financial services related to virtual assets, such as trading, investments, and custody. The Operating a Crypto Business license is for firms that want to establish a crypto business in the ADGM. Ultimately, the Crypto Asset Activities License is designed for companies seeking to engage in specific activities related to crypto assets.
Setting up a crypto business in the UAE can be complex, but Ape Law makes it smooth. As Web3-native legal experts, we handle crypto licensing, business structuring, and compliance so you can focus on growth. Whether you’re launching a new coin, token, and/or NFT, expanding operations, or optimizing for tax efficiency, our team ensures a smooth and legally sound setup. Ready to establish your business in the UAE? Book a free consultation today to navigate the legalities of setting up a Web3 business in the UAE with ease!
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