What’s next for ADGM’s Law Firms, CSPs & Tax Advisers

What comes next and how to prepare

Author’s Update (22nd October 2025)

ADGM has now finalised and implemented the framework referenced in this article through the Conditions of Licence & Branch Registration Rules 2025(A) and the Controlled Activities Rules 2025, both issued on 16 October 2025.

Compared with the earlier consultation (CP No. 5 of 2025, issued 16 May 2025 – closed 15 June 2025), the final framework confirms Tax Services as a standalone controlled activity, formalises Professional Indemnity Insurance (PII) thresholds, adjusts qualification and presence requirements for legal practices, and strengthens governance and conflict-management standards for Company Service Providers (CSPs).

What Changed vs the Consultation

•  Tax Services confirmed as a distinct controlled activity under the Controlled Activities Rules 2025.

•  Professional Indemnity Insurance (PII) limits finalised:

o Legal & Tax Services – USD 1,000,000 per claim.

o Company Service Providers – USD 1,000,000 per claim / USD 1,500,000 aggregate.

•   Managing Partner experience threshold reduced to ≥ 8 years PQE (previously 10).

•   On-Island Presence (LSPs): each licensed practice must maintain an ADGM office and employ at least one full-time, qualified staff member holding an ADGM visa/work permit, generally physically present during ordinary business hours.

•   CSP Governance: reinforced “fit and proper” criteria, prudent operations, and formalised conflict-of-interest controls.

Professional Indemnity Insurance at a Glance

Transitional Notes

•   The 2025(A) framework applies immediately to new applicants.

•   Existing licensees benefit from 6-month transitional windows for certain conditions, including staffing and PII.

•   Annual LSP Return reporting begins 1 January 2027, due by end of April each year.

Source References

•    ADGM Registration Authority announcement (16 Oct 2025):

https://www.adgm.com/media/announcements/adgm-registration-authority-publishes-enhanced-controls-for-legal-tax-and-company-service-providers

•   Conditions of Licence & Branch Registration Rules 2025(A):

https://en.adgm.thomsonreuters.com/rulebook/commercial-licensing-regulations-conditions-licence-and-branch-registration-rules-2025a

•   Controlled Activities Rules 2025:

https://en.adgm.thomsonreuters.com/rulebook/commercial-licensing-regulations-controlled-activities-rules-2025

ADGM has developed itself into a one of a kind global hub. Solid reputation, 100% foreign ownership, a tax-friendly environment and access to the UAE’s double-tax treaty network, plus fast, modern licensing through a dedicated Registration Authority. Its courts apply English common law directly and run on world-class e-courts infrastructure. International investors and professional firms enjoy legal certainty and enforceability they expect and more.

I’ve witnessed personally a wave of Law Firms and Corporate Service Providers wave of M&A shoppers collecting info about law firms and CSPs from ADGM. It is really something remarkable how it is highly looked at. This is why ADGM has become a natural base for international law firms, corporate services groups, and specialist tax shops aiming to serve the UAE and the wider region from Abu Dhabi into the GCC, Africa and South Asia.

This is for “The gatekeepers”

Lawyers, Company Service Providers (CSPs), auditors and tax advisers are the gatekeepers of any business society and here, in the UAE, the businessmen rely a lot on their advisors to follow their lead when it comes to where to register and how to do business. They should also advice on ADGM’s standards. At Elnaggar & Partners, we’ve built a niche in helping Entrepreneurs and professional firms establish and scale in the UAE. Having recently secured the latest Legal Services licence issued in ADGM in 2025 – which is one of the large Indian Law Firms, we’re publishing this guidance so every current and aspiring ADGM professional understands what is changing and how to get ahead.

What new comers and dual-licence firms must know about ADGM is that it is always evolving and developing. So, today, many market players operate with a dual activity licenses – at least - as Legal Consultancy firms & Corproate Service Provider at the same time. OR Auditor and Corporate Service Provider under one roof.

In the future, ADGM is expected to tighten this. The Registration Authority (RA) plans to restrict combining CSP activity with legal or audit services within the same entity, planning to to eliminate conflicts and to ensure high confidentiality; the RA may still allow  sister entities to operate separately while sharing the same offices and admin support.

What we do when we get an inquiry for a new firm to be established, we premtively aim for the high standards by informing our clients to prepare themselves for the future. It makes no sense to start with lower standards and be forced to update and upgrade in few months. Also, to make sure the ADGM authority when reviewing the file and application to be submit for a new entity, it makes much more sense to approve the ones who are prepared for the future. So, this is your signal about where the regulator is heading.

For reference, the circulated consultation paper no. 5 of 2025 closed by the 15th of June 2025. The final rules shall be published by ADGM for the new applicants to follow the rules on publication immediately while the existing licensees get 18 months to comply.

The new benchmark for ADGM Law Firms

For the Legal Service Providers “Law Firms”. The applicants must be either a company or a partnership operating for more than 5 years and providing legal services in another jurisdiction at least. Meaning that completely new or UAE born firms will not be eligible to register with ADGM. While the Managing Partner should have at least 10 years of Post Qualification Experiance in his pocket, supported by a team of at least 10 qualified legal professionals across the group where at least three of them should have not be of less than eight years PQE.

Such requirements above will ensure that the ADGM Legal Service Provider is lead by and operating with enough legal professionals and enough support across jurisdictions. This in my humble opinion in itself is quiet the assurance that whoever holds the bagde of ADGM will be recognized as one of the trustworthy and qualified firms to be trusted and relied on.

In addition to the personnel qualifications, ADGM raised the Professional Indemnity Insurance coverage requirement to USD 2 millions, it might sound a bit high compared to other jurisdictions but I would personally argue that it goes hand in hand with the values of the claims and investments flocking into the UAE in general. It makes sense to raise the bar. Also, all firms must be governed and to comply with Client Money Rules and make sure they are followed.

In terms of the staffing and the presence on the Islands, All ADGM registered legal services providers will have to have physically one qualified lawyer present in the ADGM office while at least two qualified lawyers should be sponsored through the ADGM entity. The office facility should be big enough to cover both or more members of the ADGM entity.

And the most interesting change would be that Legal Service activities cannot be stacked or combined with any other controlled activities – like CSP for example – except with Tax Services and Compliance Consultancy. It might sound like a nig change for a lot of companies but existing combined activities licenses would have at about 18 month to rectify and find a suitable solution for them. Whether to establish a new entity and regulate the separation internally in a way that compliment without conflict or they would have to choose a lane!

The new benchmark for Corporate Service Providers

As well, all CSP licence holders will face some changes in the future. They will have to be kept separate from any other controlled activity, like legal and auditing firms. However, there is not much material change worth mentioning in terms of regulatory requirements that would enhance CSP operations. They are regulated by the CSP framework issued on 30 March 2021 (effective 12 April 2021), as amended on 23 February 2023, and it still governs them a regime that is extremely relevant and sophisticated. In my opinion, it is one of the strictest yet strongest frameworks in the UAE, if not the most. All of it remains in scope, and of course we should expect a round of inspection once the future regulations come into play.

The future for “Tax Services” will probably by controlled

ADGM is most likely to enhance it’s regulations by considering “providing tax services” as a controlled activity. Which is perfectly in line with the practical developments on ground.

In practice, this captures two streams of businesslines. One is advising on Non UAE tax. Like for example tax planning, compliance, structuring, and risk management to help clients optimise positions and meet international obligations, and the second is by representing and advising clients on UAE tax, which is more of advising on the tax compliance matters, handling filings, or advisory and communications with local tax authorities.

This is the first time tax would have its own controlled activity track in ADGM, clearly separating specialist tax work. That should definatly revamp the professional standards.

And of course, by introducing the activity to the “controlled environment” it comes with some standards. The majority of senior management at a tax service provider must hold recognised professional qualifications and should have at least three years of relevant PQE.

Once authorised, Tax Service Providers will be subject to their set of ongoing obligations like maintaining professional indemnity insurance of USD 2 Millions per claim, complying with Client Money Rules, and adhering to core principles that all professional services providers in ADGM has to abide to (integrity; due care and diligence; confidentiality; transparency; cooperation with the RA; and managing conflicts of interest).

This is a forward-looking framework that formalises tax advisory and representation in ADGM and sets a clear benchmark for competence, protection, and conduct.

Elnaggar & Partners playbook on how to prepare for the future.

There are many ways to get yourself in trouble and survive and non of them is to get yourself in trouble with ADGM. If you are here to stay, then I will summarize below the things you should make sure you have and maintain to secure your practice in this great jurisdiction

For law firms (LSPs)

-    Confirm that your firm meet the five years entity experience.

-    Make sure your maintain your practice in at least one more “other” jurisdiction.

-    Make sure you always have at least One Qualified lawyer available 5 days a week, full working hours physically from the ADGM office.

-    Make sure you have at least Two Qualified lawyers sponsored through the ADGM entity.

-    Make sure within your firm you have at least ten (10) qualified lawyers

o     At least three of the above ten should be of 8 years PQE

o     The Managing Partner to be at least more than 10 years PQE

-    Uplift your Professional Indemnity Insurance to cover USD 2 millions

-    Make sure you have apply adequate internal Client Money Rules

-    In case you have additional CSP activity in your license you should separate the activities.

For CSPs (including legal/audit groups with CSP arms)

-    In case the CSP is not a solo activity then you should plan to restructure early.

-    Controls: refresh by:

o     Uplift your Professional Indemnity Insurance to cover USD 2 millions

o     Check your share capital requirements with the latest CSP regulations.

o     Health check your Compliance Regulations and Staff training.

o     Health check your annual CSP Return processes.

For tax advisers

You have no chance than to upgrade to prepare yourself to be a “controlled activity”:

-    Align service scope to the higher standards in everything

-    Ensure majority of senior management hold recognised tax / accounting qualifications with at least 3 years PQE.

-    Secure a Professional Indemnity Insurance cover of USD 2 millions at least

-    Adopt Client Money protocols. 

What Elnaggar & Partners can do for you

ADGM started officially operating in 2015. We exist in ADGM since 2017. One of the first Sevrice Providers to step into this amazing jurisdictions. And by time, we helped so many Entrepreeneurs and business run and establish here.

We specialise in building professional services companies in ADGM. Basically from A to Z. Our way of work is to start with a readiness scan that maps your objectives, your entity structure, people, premises, governance, processes and reporting against the rulebook. From there, we design the roadmap, we help you do the activity selection based on your bsuienss model and, where relevant, add group structuring, inter-company agreements and shared services guardrails.

In parallel, we are capable of crafting the documents needed for any application, define gaps in your existing formats that you might be using in other jurisdictions or even just draft them from scratch. We can deliver the operational kit: policies, procedures, protocols for all services as well as helping your for the first periods to aligned to the regulatory authority requirements. We’ve just done it for many of our clients and of course enhancing our own year after year. That’s why we are a long term partner of ADGM operating with integrity and lots of good learning and experiences. So, if you’re setting up or reshaping your ADGM presence, let’s do it right.