By CRYPTOVERSE Legal Consultancy | September 2026
A sponsor wants its investment team and fund manager in ADGM, but investors have asked for the fund itself to be established elsewhere. The proposed structure sounds straightforward: an FSRA-licensed ADGM manager, a Foreign Fund, and investors across several countries.
Then three questions surface:
Does the manager’s ADGM licence cover the fund? What must be notified to the FSRA before management begins? And where can the fund’s units actually be marketed?
Each question has a different answer. Treating them as one “fund approval” question is where cross-border launches often become difficult.
First, what is a Foreign Fund?
Under FUNDS Rule 3.1.1, a fund established or domiciled in ADGM is a Domestic Fund. A fund that does not meet that description is a Foreign Fund.
An ADGM-based manager can therefore manage a fund established outside ADGM. The structure has two regulatory centres:
- ADGM, where the manager conducts its regulated activity and answers to the FSRA; and
- The fund’s home jurisdiction, whose laws govern the fund’s establishment and operation.
Add investors in other countries, and the sponsor must also consider the rules of each place where it offers fund interests. An ADGM licence does not make those distribution rules disappear.
Does an ADGM manager need FSRA permission to manage the Foreign Fund?
Yes. The firm must hold an appropriate Financial Services Permission (FSP) for the regulated activity of Managing a Collective Investment Fund. The proposed Foreign Fund must fit the scope and any restrictions of that permission for obtaining a fund manager licence in ADGM.
This matters particularly for specialised managers. A Sub-Threshold Fund Manager (STFM), Venture Capital Fund Manager (VCFM) or Institutional Fund Manager (IFM) operates under framework-specific conditions. A manager cannot assume that every Foreign Fund it might establish will fit its restricted permission. For example, a fund’s investor eligibility, whether it is closed-ended, its investment strategy and its committed capital may matter to the manager’s chosen route.
The useful question at the start of a launch is therefore:
Can this particular ADGM manager, under its actual FSP, manage this particular Foreign Fund?
If the answer requires a variation of the manager’s permission, the sponsor should identify that before forming the fund or circulating its offering document.
What does the manager notify to the FSRA?
Under FUNDS Rule 7.2.1, an FSRA-authorised manager intending to manage a Foreign Fund must notify the FSRA as soon as reasonably practicable before launch. The rule’s guidance sets a minimum of seven calendar days before the manager commences its management functions.
The notification must follow the FSRA’s prescribed form and include the latest versions of:
- The Foreign Fund’s constitution;
- Its offering document or equivalent; and
- Any other information the FSRA requires.
The manager must also evidence that the arrangements specified in FUNDS Rules 7.2.3 and 10.1.6 have been met or will be met before it starts managing the fund. The manager must submit a Periodic Fund Return for each Foreign Fund it manages under the applicable FUNDS rules. (Rulebook)
The seven-day guidance is a minimum notification period, not a promise that every structure will be ready to launch seven days after documents are filed. The fund must still be properly established under its home law, the manager must be authorised for its proposed role, and the operating arrangements must be in place.
The fund’s home law remains part of the manager’s job
FUNDS Rule 7.2.2 requires the ADGM manager to have systems and controls adequate to ensure compliance with the requirements that apply to the Foreign Fund in its place of establishment or domicile.
That has practical consequences. The manager needs to understand, for example:
- What the fund’s home law permits it to invest in;
- Who may serve as manager, general partner, director, administrator or depositary;
- What approvals, registrations or filings are required locally;
- How the fund must value assets, report to investors and prepare accounts; and
- Whether an ADGM entity is permitted to carry out the proposed management role under that jurisdiction’s rules.
An FSRA permission establishes the manager’s position in ADGM. It is not a substitute for checking the fund domicile’s requirements.
Administration, custody and records: what must be ready?
Under FUNDS Rule 7.2.3, the ADGM manager must ensure that the Foreign Fund has an administrator or trustee before management begins. It must also appoint an Eligible Custodian unless doing so is both impractical and disproportionate. The manager must be able to obtain access to the fund’s books and records for the FSRA and those performing oversight functions as mentioned in ADGM Rulebook .
Our Virtual Asset funds advisory services arrangements are designed alongside the fund, rather than added at the end of the licensing process. In particular, the custody exception should be assessed against the fund’s assets and documented; “the fund invests in private assets” is not, on its own, a complete analysis.
FUNDS Rule 7.2.4 also applies the relevant ADGM AML requirements to the authorised manager in relation to the Foreign Fund’s unitholders and prospective unitholders. Outsourcing administration or onboarding does not remove the manager’s need to understand and oversee its responsibilities.
Managing the fund and marketing its units are different activities
This is the distinction sponsors most often need to make.
Managing a Foreign Fund from ADGM concerns the manager’s permission and FUNDS Chapter 7. Offering the fund’s units in or from ADGM raises the separate marketing and prospectus requirements in FUNDS Chapter 10, as well as the scope of the firm’s FSP and applicable financial promotion rules.
An authorised manager or another appropriately authorised person may offer units of a Foreign Fund in or from ADGM subject to those rules. Among the key requirements:
- A Foreign Fund must not be offered to an ADGM Retail Client unless it may be offered to retail investors under the rules of its home jurisdiction (FUNDS Rule 10.1.1).
- A person offered units in ADGM must receive a current prospectus or equivalent offering document at the time of the offer (FUNDS Rule 10.1.2).
- The document must be available in English and include prominent information about the fund’s home jurisdiction, applicable legislation, regulator and regulatory status, together with the prescribed FSRA warning (FUNDS Rule 10.1.3).
- It must adequately explain matters including the investment strategy and risks, fees, exits, valuation, leverage and relevant counterparties (FUNDS Rule 10.1.4) as mentioned in ADGM Rulebook.
A sponsor should review the offering document for ADGM marketing compliance, even if that document was originally prepared to satisfy the fund domicile’s rules.
What if investors are outside ADGM?
Suppose the manager is in ADGM, the fund is established overseas, and prospective investors are in the UAE mainland, Europe and Singapore so they can use cross-border legal support for crypto and Web3 expansion.
The FSRA management route answers only part of the question. The sponsor must examine the offer and distribution rules applicable in each investor jurisdiction. Depending on the country and the way investors are approached, those rules may address private placements, local registrations, licensed intermediaries, investor categories and permitted marketing communications.
The sponsor should also identify who is doing the marketing. An ADGM manager, an overseas placement agent and a group company may each face different regulatory questions. A website, conference presentation or targeted email campaign can create distribution issues even if subscriptions are ultimately signed elsewhere.
“Private fund” is a description of the intended investor base. It is not a worldwide marketing permission.
A practical example
Imagine an FSRA-authorised ADGM manager plans a closed-ended Foreign Fund investing in private technology companies. Its first investors will be professional investors in ADGM and institutions in three other countries by using crypto VC fund legal structure in ADGM.
The launch team should work through four workstreams together:
| Workstream | Question to resolve |
| Manager permission | Does the ADGM firm’s FSP and manager category permit it to manage this Foreign Fund and conduct its proposed marketing activities? |
| Fund domicile | Is the fund validly established, and may the ADGM firm act as its manager under home-jurisdiction law? |
| FSRA requirements | Have the Chapter 7 notification, administrator or trustee, custody, records and AML arrangements been addressed? |
| Distribution | Are the offering documents and marketing arrangements lawful for each intended investor location? |
A favourable answer in one column does not answer the others. That is why a cross-border fund launch needs a coordinated legal and operational plan.
The launch sequence that avoids expensive rework
Before committing to a fund domicile or a first-close date, a sponsor should:
- Map the manager’s FSP against the proposed fund and every activity it intends to perform.
- Confirm the fund domicile’s rules, including the ADGM manager’s eligibility to act.
- Appoint and document the service providers required under FUNDS Rule 7.2.3.
- Prepare the constitution and offering document for the home jurisdiction and review the document against ADGM requirements where units will be offered in ADGM.
- Build a country-by-country distribution plan identifying investors, marketers and available offering routes.
- Submit the FUNDS Rule 7.2.1 notification in time and complete the required arrangements before management starts.
The takeaway
An ADGM-authorised fund manager can manage a Foreign Fund, but an FSRA licence is only one part of the structure. The manager needs the right permission, must notify the FSRA before commencing management, and must meet the Foreign Fund operating requirements. Marketing the units in ADGM and offering them abroad raise separate questions.
The best structure is the one that works in all three places that matter: where the manager is authorised, where the fund is established, and where its investors are approached.
CRYPTOVERSE Legal Consultancy advises sponsors on ADGM fund setup and licensing services, Foreign Fund management, fund documentation and cross-border regulatory scoping.
Disclaimer: This article is general information based on the ADGM FSRA rules available in September 2026. Fund domicile and distribution requirements vary by jurisdiction and transaction. It is not a substitute for legal advice on a specific launch.
FAQs
1. What’s the difference between a Domestic Fund and a Foreign Fund in ADGM?
A Domestic Fund is established or domiciled in ADGM. A Foreign Fund is any fund that doesn’t meet that description — meaning it’s established elsewhere, even if managed by an ADGM-based manager.
2. Can an ADGM-licensed fund manager manage a fund established outside ADGM?
Yes, but the manager’s Financial Services Permission must cover the activity, and the proposed Foreign Fund must fit within any restrictions on that permission — particularly for specialised managers like STFMs or VCFMs.
3. How much notice must an ADGM manager give the FSRA before managing a Foreign Fund?
A minimum of seven calendar days before commencing management functions, along with the fund’s constitution, offering document, and other required information.
4. Does an ADGM licence allow a fund manager to market fund units anywhere in the world?
No. Managing a Foreign Fund and marketing its units are treated as separate activities. Marketing outside ADGM requires compliance with the distribution and offer rules of each investor’s jurisdiction.
5. Does managing a Foreign Fund from ADGM mean the manager can ignore the fund’s home-jurisdiction rules?
No. The ADGM manager must have systems and controls to ensure compliance with the fund’s home-jurisdiction requirements — an FSRA permission doesn’t substitute for meeting local law where the fund is established.