Accounting Services in ADGM: A Guide to Accounting and Compliance

When setting up a business in the Abu Dhabi Global Market (ADGM), founders must understand the accounting and reporting responsibilities that come with it.

Whether you’re starting a new company, managing an established one, or seeking accounting services in ADGM, it helps to know what the Registration Authority (RA) requires, when to prepare annual accounts, and whether your business needs statutory audits by an ADGM-registered auditor.

The guide outlines ADGM accounting requirements, the role of the Registration Authority, and key points on International Accounting Standards (IAS) and Company Service Providers (CSPs), so founders, finance team members, and business owners can make informed decisions about their compliance obligations.

Accounting & Compliance Obligations in ADGM

ADGM companies must maintain adequate accounting records even when they are dormant or not trading. Annual accounts filing requirements depend on the entity’s legal form and any applicable exemptions.

However, all accounting records must explain the company’s transactions and show its financial compliance. It must cover:

• Money received and spent, including transfers and payments
• Invoices, contracts and supporting evidence for transactions
• Assets and liabilities
• Stock records and relevant purchases and sales for businesses dealing in goods

The Registration Authority (RA) has specific rules on how companies maintain their financial records. Getting these basics right also makes it easier to work with auditors, track business growth, and make decisions based on reliable numbers.

Here’s what companies need to know:

• Retain records for at least 10 years ADGM companies must keep accounting records for at least 10 years from the date they are made. That includes the documents behind your transactions, such as invoices and bank statements.
• Know where your records are kept
  • Accounting records must be kept at the company’s registered office or another location chosen by its directors.If accounting records are maintained outside ADGM, accounts and returns relating to those records must also be sent to and kept at a location within ADGM.
  • These documents must provide a reasonably accurate picture of the business’s financial position at intervals of no more than six months and allow the directors to verify that the company’s annual accounts comply with ADGM requirements.
• Check whether group accounts are required Parent companies may need to prepare consolidated accounts covering their wider group, unless an exemption applies. This is particularly relevant to holding companies and businesses with subsidiaries in different jurisdictions.
• Present accounts in US dollars ADGM annual accounts must be presented in USD. If your accounts are prepared in another currency, you’ll need to provide a USD-translated copy when submitting them to the Registrar. The conversion must use the exchange rate on the balance sheet date, with that rate disclosed in the notes.
• Don’t leave record-keeping until the deadline Annual accounts must include:
  • Profit and loss account or income statement
  • Balance sheet
  • Notes to the accounts
  • Directors’ report and auditor’s report, where required.
• File on time Late filing can lead to a penalty, so keep track of your reporting deadlines and give your accountant enough time to prepare the accounts.

Directors are responsible for making sure the records are sufficient to prepare the required accounts. A folder of invoices and bank statements may be a starting point, but it still needs to support complete and accurate financial reporting.

An accountant familiar with ADGM’s regulatory framework can help you set up processes that fit the way your business actually operates.

What happens during annual accounts filing?

ADGM entities must prepare their financial statements in accordance with the applicable International Accounting Standards (IAS) requirements under ADGM rules. The International Accounting Standards Board is the body that issues the International Financial Reporting Standards (IFRS).

IFRS compliant financial statements are submitted and filed through the ADGM Registration Authority Online Registry Solution.

Annual accounts are usually prepared after the end of the financial year and report the company’s or LLP’s financial position and performance for that period.

Accounting reference date and annual accounts filing deadlines

The ARD determines the end of the accounting reference period and is selected during incorporation. The first accounting period must generally be longer than six months and no longer than 18 months.

A company can generally prepare accounts to its ARD or a date within seven days either side.

It may change its ARD, subject to statutory restrictions. Extensions are generally limited to once every five years, and the accounting period cannot exceed 18 months, subject to exceptions.

An ARD change normally affects the accounts filing deadline.

ADGM Company Formation: Quick Overview

The ADGM (or Abu Dhabi Global Market) specializes as an international financial center and financial free zone in Abu Dhabi. ADGM offers different structures depending on a business’s purpose and activities.

Businesses may establish Special Purpose Vehicles (SPVs) to hold assets or ownership interests, or use foundations for asset holding and wealth or business structuring.

An SPV is generally used as a passive holding company to hold assets, investments or ownership interests and separate specific financial and legal risks.

Its permitted activities are subject to its ADGM licence and applicable regulatory requirements. It should not be treated as a substitute for an operating company carrying out day-to-day commercial activities.

The ADGM framework is heavily regulated by the Registration Authority and the Financial Services Regulatory Authority (FSRA).

• The Registration Authority handles company registration and corporate obligations relevant to annual accounts and auditor registration.
• The FSRA sets and enforces additional regulatory requirements for financial institutions and other entities it regulates.

ACCESS ADGM provides a route for eligible businesses to set up and register.

Will companies operating in ADGM need to lease a physical office?

ADGM generally requires registered entities to maintain a physical presence on Al Maryah Island or Al Reem Island. SPVs are the exception and must meet the applicable registered-office requirements.

However, certain requirements apply based on your company type:

• Operating companies: Generally require physical office space or a business-centre address, depending on the arrangement.
• Tech startups: Must have at least one dedicated desk or office space; hot desks are not accepted. Eligible tech startup license holders can apply for up to three visas per dedicated desk.
• Special Purpose Vehicles (SPVs): SPVs may qualify for an exemption from conventional physical office requirements. However, non-exempt SPVs must appoint an ADGM-licensed Company Service Provider (CSP), which provides the registered office address and handles the relevant incorporation and ongoing filing requirements. Exempt SPVs are not required to appoint a CSP under the general CSP framework, subject to meeting the applicable exemption criteria.
• Holding companies: Generally require physical office space or an eligible business-centre workspace in ADGM.

If your operating company or tech startup plans to sponsor employment visas, your visa allowance is tied directly to your physical workspace:

Visa allocations are subject to ADGM’s applicable eligibility and licensing requirements. Refer to the ADGM Visas and Government Services guidance for current quotas.

Abu Dhabi Accounting Services: Corporate Tax Readiness, Accounting Firms and Advisory Services

Outsourced accounting services help ensure compliance with ADGM regulations. Note that bookkeeping and statutory audits are often separate services.

Most accounting firms supply a wide range of services, typically managed as tailored services to ADGM companies.

Corporate Tax Compliance

UAE Corporate Tax was introduced under Federal Decree-Law No. 47 of 2022. All taxable persons must register for Corporate Tax and obtain a Corporate Tax Registration Number.

ADGM companies must assess their UAE Corporate Tax registration and filing corporate tax returns based on their status. Being incorporated in a free zone does not automatically exempt a company from registration.

However, certain companies falling under exempt person categories, including non-resident persons deriving only state sourced income without a PE, do not need to register for corporate tax. Other categories of Exempt Persons may still need to register with the Federal Tax Authority or apply for recognition of their exempt status.

Businesses should therefore assess their specific classification rather than assume that an exemption from Corporate Tax automatically removes the registration requirement

A Free Zone Person may qualify for the 0% Corporate Tax rate on qualifying income if it meets the statutory conditions for QFZP status. The treatment does not apply automatically to every free zone company or every category of income. Accounting records should specify qualifying and non-qualifying income.

UAE VAT Compliance

VAT is a separate tax from Corporate Tax. ADGM companies must assess their VAT obligations based on their activities and transactions.

UAE-resident businesses must generally register for VAT when their taxable supplies and imports exceed, or are expected to exceed, AED 375,000 over the applicable period. Voluntary VAT registration may be available where the applicable threshold of AED 187,500 is met.

Non-resident businesses making taxable supplies in the UAE may have registration obligations regardless of the value of supplies where no other person is required to account for the tax.

Accounting records should allow businesses to reconcile transactions and support the VAT treatment applied to purchases and sales.

ADGM Entities: Audit Requirements

Most companies in ADGM have to have their accounts audited by an auditor who is registered with ADGM, but companies that qualify as small companies or dormant companies may be entitled to exemptions.

The result can be affected by changes in regulatory status and UAE Corporate Tax requirements.

Who generally needs an audit?

• Companies whose annual accounts are not covered by a valid audit exemption.
• Companies that cannot use the small-company or dormant-company exemption.
• Financial institutions regulated by the FSRA, subject to the applicable requirements.
• Public-interest entities, which cannot claim the general small-company or dormant-company audit exemptions described in the RA guidance.
• QFZPs where audited financial statements are required under UAE Corporate Tax Law, even if an ADGM company-law exemption would otherwise be available.

Who may qualify for an exemption?

• Small standalone companies: May qualify under section 449 of the Companies Regulations 2020.
• Small companies belonging to a small group: May qualify under section 451, depending on the size and eligibility of the entire group.
• Dormant companies: May qualify under section 455 if they satisfy the conditions, including the relevant small-company eligibility requirements and not being required to prepare group accounts.
• Micro-entities: May access the relevant small-company exemptions if they meet the applicable criteria.

Small company thresholds under the 2026 Guidance

ADGM classifies companies as micro-entities, small, medium-sized or large based on turnover and average employee numbers. Both thresholds must be met to fall within a classification. (i.e. a company is micro, small or medium only if it meets both limits. Anything that fails either threshold is considered as a large company.)

Additional rules apply to parent companies and groups, and eligibility for simplified reporting or audit exemptions depends on the applicable conditions and exclusions.

Additionally, turnover thresholds must be adjusted proportionately for financial periods shorter than 12 months. For subsequent financial years, a two-year rule generally affects whether a company continues to qualify for a size classification.

Parent companies must also assess the size of their group.

Regulatory compliance for ADGM

ADGM companies must meet the regulatory requirements that apply to their legal structure and activities.

For firms handling client funds, the Client Money Rules require compliance in handling client funds under specialized regulations.

While some companies may qualify for an audit exemption, this does not remove their obligation to maintain adequate accounting records or automatically exempt them from preparing and filing annual accounts.

ADGM Approved (Registered) Auditors: How It Works

If your ADGM company needs a statutory audit, check that your chosen auditor is authorized to carry out the work. The Registration Authority (RA) oversees auditor registration and recognition, so it’s worth checking the official register rather than relying on a firm’s website or its claim to be one of the ADGM approved auditors.

ADGM’s current auditor framework distinguishes between registered audit firms and registered audit principals.

A Registered Auditor is an audit firm registered with the ADGM Registration Authority and authorized to conduct statutory audit work within its permitted scope.

A Registered Audit Principal is an individual registered with the RA who is authorized to sign audit reports on behalf of a registered audit firm.

Under the Companies Regulations 2020 and the Companies Regulations (Auditors) Rules 2023, statutory audits of ADGM entities must be conducted by appropriately registered auditors.

Additional permits apply to certain engagements:

• Public Audit Permit is required for audits of Public Interest Entities (PIEs).
• Financial Institution (FI) Audit Permit is required for audits of Financial Institutions. The auditor must also hold a Public Audit Permit as a prerequisite.

Before appointing an auditor, verify the firm’s registration, the relevant audit principal’s status, and whether the required additional permits are in place.

The current list of registered audit firms and registered audit principals can be searched through ADGM’s Public Register under the Auditors section of the Online Registry Solution.

Company Service Providers (CSP): When You Must Appoint One

A Company Service Provider (CSP) is a firm licensed by the ADGM Registration Authority (RA) to provide specified corporate services within ADGM.

Under the ADGM CSP framework, licensed providers can support company incorporation, provide registered office services, act as a primary point of contact for the Registrar, and handle statutory filings on behalf of their clients.

The role is particularly important for non-exempt Special Purpose Vehicles (SPVs) and foundations, which must appoint and maintain an ADGM-licensed CSP.

Core functions may include:

• Incorporation applications: Submitting applications to establish eligible ADGM companies, SPVs and foundations.
• Registered office provision: Providing the registered office address required under the applicable ADGM regulations.
• Corporate administration: Supporting statutory registers, corporate records and other required company administration.
• Registrar liaison: Acting as the primary point of contact for the ADGM Registration Authority.
• Ongoing statutory filings: Preparing and submitting relevant corporate filings and notifications on behalf of the entity.

The nature of a CSP lies in its purpose and appointment rules.

• Mandatory appointment Non-exempt SPVs and non-exempt foundations must appoint and maintain an ADGM-licensed CSP under the applicable regulations.
• CSP appointment is not universal Other ADGM entities are not automatically required to appoint a CSP. Exempt SPVs and foundations may also qualify for an exemption, subject to the Registrar’s applicable criteria.
• Typical responsibilities A CSP may submit incorporation applications, provide a registered office, act as the Registrar’s primary point of contact, and handle ongoing statutory filings.
• Notification to the Registrar Existing non-exempt SPVs must notify the Registrar of the appointment or cessation of a CSP within 14 days.
• Non-compliance Failure to maintain a required CSP can expose the entity and its defaulting officers to regulatory consequences, including potential penalties and strike-off.

What is the difference between a CSP and an accountant?

A CSP’s corporate-services role is not the same as bookkeeping or statutory audit. There may be some overlaps as one provider may offer several services, but the difference lies in the relevant licensing and authorization requirements.

ADGM vs DIFC: Which Financial Free Zone fits your business?

ADGM and DIFC are both UAE financial free zones, but they are not interchangeable when it comes to company setup, accounting, and ongoing compliance.

The right choice depends on what you plan to do through the entity, whether you need a regulated financial services license, and how much administration your structure will require.

For founders choosing between the two, these are the differences worth looking at.

Businesses comparing the two jurisdictions should also consider their respective accounting and reporting requirements. For a closer look at the latter, see our guide to Accounting Services in DIFC.

What does this mean for your business?

1. If you’re setting up a straightforward operating company, compare the permitted business activities, license requirements, office arrangements, and recurring compliance costs before deciding. Don’t base the choice on incorporation fees alone.
2. If you’re establishing a holding company or SPV, pay closer attention to each jurisdiction’s eligibility criteria and CSP rules. Both ADGM and DIFC have exemptions, but they are conditional. A structure that qualifies in one jurisdiction should not be assumed to qualify in the other.
3. For financial services businesses, the regulatory question comes first. Work out whether your intended activity requires FSRA or DFSA authorization, then assess the associated reporting and audit obligations.

One important point on accounting: don’t assume that choosing a free zone means your company automatically receives a corporate tax benefit or an audit exemption.

UAE Corporate Tax obligations must be assessed separately, and qualifying for a particular tax treatment depends on meeting the applicable conditions.

How to Choose an ADGM Accounting & Audit Partner

Outsourcing accounting services in ADGM can support your firm’s strategic planning and create operational efficiency with fewer in-house resources. However, choosing the right partner can be difficult given the range of available providers.

Founders can assess potential partners against the following checklist:

• ADGM experience Experience with the relevant company structure, reporting rules and Registration Authority filings
• Accounting standards Ability to prepare accounts under the applicable IAS requirements and support the reporting format required for the entity.
• Audit authorization Verify registration, independence and any additional permits required for the proposed audit.
• Corporate Tax expertise Ability to assess QFZP conditions, tax planning and strategy, corporate tax filings and compliance
• VAT expertise Experience with VAT registration, reconciliations, return preparation and supporting documentation
• Service scope Confirm whether the engagement covers bookkeeping, annual accounts, tax returns, audit preparation, statutory audit or CSP services. These are not interchangeable.
• Industry experience Consider whether the provider understands the company’s activities, such as investment holding, fintech, trading or professional services
• Reporting and communication Establish who prepares the reports, who reviews them, how frequently management receives updates and who is responsible for filing
• Technology and document management Check how invoices, bank statements, contracts and other supporting records are collected, stored and reconciled
• Professional indemnity insurance Verify that appropriate cover exists for the services being offered
• Pricing and scalability Compare the recurring fee, additional charges, reporting deliverables and how the engagement can accommodate business growth.

Choosing the right accounting partner can make it easier to manage financial reporting, maintain accurate records and stay on top of UAE tax obligations.

Skrooge provides AI-assisted accounting and tax support for UAE businesses, combining automation for routine accounting tasks with support from an experienced chartered accountant. We offer businesses practical finance support, including monthly accounting and bookkeeping, VAT and Corporate Tax support, financial reporting and audit preparation.

Whether you’re setting up in ADGM or managing an already established company, Skrooge provides practical accounting and tax support tailored to your business, giving you more time to focus on your core operations and sustainable growth.

Frequently Asked Questions (FAQs) for Businesses Operating in Abu Dhabi Global Market (ADGM)