ADGM vs. DIFC
For entrepreneurs looking to register new companies in the UAE, the ADGM and DIFC offer attractive options as financial free zones with separate jurisdictions. Founded in 2002, DIFC has a strong track record and is highly ranked on the Global Financial Centers Index. ADGM is new, but still attractive for startup funding.
Both jurisdictions are considered major financial centers and are home to large financial institutions and venture capital organizations. They are the preferred choice for founders as they provide access to capital and a safe regulatory environment.
Application of English law: ADGM tends to assume application of English law, whereas DIFC relies on its own laws and incorporates English law as a last resort.
Court system: ADGM can directly apply English law and take English case law into account, while DIFC has a strong reputation for extensive case law but does not strictly adhere to English case law .
Company Law: ADGM is based on the more recent UK Companies Act 2006, while DIFC is based in part on his UK Companies Act 1985.
Arbitration: ADGM cooperates with the International Chamber of Commerce on arbitration, while DIFC has its own arbitration rules based on his UNCITRAL model. Bankruptcy Law: ADGM’s bankruptcy rules are based on English law, and DIFC’s law mirrors English bankruptcy law.
Cost: ADGM is often more cost-effective for startups due to its lower setup costs and greater flexibility compared to DIFC.
In summary, choosing between ADGM and DIFC depends on your company’s specific needs and long-term vision. If English law assumptions, cost effectiveness and ICC arbitration are your business priorities, ADGM may be your best option. On the other hand, if you value an extensive litigation history, an established financial center, and a jurisdiction that allows parties to comply with the law, the DIFC may be a better option.
