Abu Dhabi Global Market (ADGM), the international financial Free Zone, officially commenced operations on Al Reem Island on 1 November 2023. The move followed the expansion of ADGM's jurisdiction beyond Al Maryah Island under UAE Cabinet Resolution No. 41 of 2023, which was issued last April.
The inclusion of Al Reem Island makes for a tenfold expansion of the ADGM Free Zone's geographic footprint to over 14 million square metres and comes in response to heightened demand from a wide range of international companies choosing Abu Dhabi as their preferred destination for global business expansion. It aligns with Abu Dhabi's economic vision, which emphasises the pivotal role of the financial sector in its diversification strategy.
New businesses on Al Reem Island
From 1 November 2023, new businesses planning to establish their presence on Al Reem Island are required to apply for a commercial licence from ADGM Free Zone rather than the Abu Dhabi Department of Economic Development (ADDED).
Following the issuance of an ADGM commercial licence, holders will become subject to the laws, regulations and administrative requirements of the ADGM Free Zone, which are different to those applicable to Mainland ADDED-registered entities.
Existing businesses on Al Reem Island
To ensure a smooth and transparent transition, ADGM has announced various arrangements to support existing Al Reem Island businesses, which will generally be exempt from compliance with ADGM's registration and licensing requirements up to 31 December 2024. During this transitional period, existing Mainland businesses on Al Reem Island can choose either to renew their ADDED licence or apply for an ADGM licence or permit.
ADDED licences will not be valid for operation in ADGM beyond 31 December 2024, so Mainland companies operating in Al Reem Island are required either to convert their business licence to ADGM or relocate their office to another Mainland area.
ADGM has amended the scope of its business activities to accommodate the transfer of most ADDED Mainland businesses into ADGM free zone. If any other permits or licences are required to be obtained or renewed under the relevant laws, including licences from federal or Abu Dhabi authorities, then businesses are advised to approach the appropriate authority.
Existing retail businesses on Al Reem Island
There is also a separate timetable for retail businesses in Al Reem Island, which are required to convert from an ADDED Mainland licence to an ADGM free zone licence by 30 March 2024.
All retailers and retail businesses can be accommodated in ADGM Free Zone, which has amended the scope of retail business activities to enable all retail businesses in Al Reem Island to convert to an ADGM licence.
Retailers and retail businesses should first apply to the ADDED Mainland licencing authority for a No Objection Certificate (NOC),
ADGM incentives for businesses on Al Reem Island
The ADGM Authority is incentivising swift action in converting ADDED business licences to ADGM licences. It will waive the government transfer fee for businesses on Al Reem Island that transfer their licence from ADDED to ADGM before 31 March 2024.
Benefits of the ADGM Free Zone
Operating within the ADGM free zone offers several advantages. It is the only jurisdiction in the region to apply English Common Law and enables access to markets, capital and talent, along with tax benefits and progressive regulations, within a strategically located international financial centre.
New businesses setting up on Al Reem Island will benefit from a robust network of over 1,500 entities and an existing workforce of over 12,000 talented individuals. This dynamic ecosystem not only fosters synergies but also provides a rich pool of resources and expertise that can accelerate business success.
Sovereign and PRO Partner Group Transfer Services
Sovereign and PRO Partner Group (SOV PPG) can assist all companies to convert their ADDED licence to an ADGM licence. We are a registered Corporate Service Provider (CSP) in the ADGM Free Zone, and we also have a Mainland ADDED licence in Al Reem Island – Addax Tower, so we have in-depth knowledge of the steps that need to be taken to convert to an ADGM licence.
SOV PPG will conduct an initial pre-check to ensure that your business activities can be accommodated in the ADGM. Most business activities will align with your current ADDED Mainland licence. We will then be able to assist with the full licence transfer process using our close connections with the ADDED and ADGM authorities.
First, we can assist you to apply to the ADDED mainland licencing authority for a No Objection Certificate (NOC) to transfer to ADGM.
Second, we can assist you to file an application to ADGM to request a licence and commercial registry transfer. We will also follow up with ADGM to ensure that the licence transfer and update is finalised successfully.
If an existing Al Reem Island-based business does not wish to, or cannot, convert to an ADGM free zone licence, then it will need to relocate to another mainland location. SOV PPG can further help with guidance on where to relocate and assist in all licence applications and updates.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
