Abu Dhabi is set to become one of the world’s largest International Financial Districts following the issuance of UAE Cabinet Resolution No. 41 for 2023 to expand the jurisdiction of Abu Dhabi Global Market (ADGM) the international financial center of the capital city of the United Arab Emirates, as part of its economic vision, which lists its thriving financial sector as one of the key focus areas for its diversification strategy. It also underlines ADGM’s Growth Strategy 2023-2027, which aims to grow the financial sector of Abu Dhabi and position it as a leading global city with the sector becoming a key contributor to its GDP.
With the addition of Al Reem Island increasing the combined geographic area of ADGM to nearly 1438 hectares (~14377774.9 sqm), the ADGM financial district will be ten times greater than its current footprint.
The resolution expands ADGM’s jurisdiction as a Financial Free Zone to Al Reem Island, adjacent to its current home of Al Maryah Island, following increased demand from a wide range of international companies choosing Abu Dhabi as a preferred destination to expand and grow their businesses globally. By being based within the financial free zone’s jurisdiction, a qualifying business entity can benefit from the preferential corporate tax rate of 0 percent on their qualifying income.
Read more: ADGM’s FSRA enhances its regulatory framework to permit private credit funds
Commenting on this major milestone, H.E. Ahmed Jasim Al Zaabi, Chairman of the Abu Dhabi Department of Economic Development and ADGM said, “In line with the wise leadership vision to build our diversified future economy and the financial industry at its core, global financial institutions, family offices, entrepreneurs and leading fintech talent continue to choose ADGM as the location from which they access a deep pool of capital and a wide range of investment opportunities that are available in Abu Dhabi.”
He continued to highlight, “Al Maryah Island is a thriving international financial center, with occupancy already over 95% and a strong pipeline of international companies wanting to expand or establish their footprint here. We have prioritized our ongoing efforts to continue to grow towards accommodating this ever-increasing demand. Al Maryah’s larger next-door neighbor, Al Reem Island, also presents an abundance of opportunities with access to a wide range of office spaces and world-class residential, educational, medical, and lifestyle facilities. Together, as ADGM, Al Maryah, and Al Reem Islands will be one of the most attractive places to live and work across financial centers worldwide.”
“This expansion provides us with a unique opportunity for Abu Dhabi to reinforce its position as a world-leading international financial center and a global destination of choice. Combining our common law jurisdiction and pioneering regulatory framework across these two islands will unlock even greater economic opportunities. We look forward to engaging with all our strategic partners and stakeholders on how we can work together to realize this great ambition.”, he added.
In the short span of eight years, ADGM has grown to support 1,400 operating entities, 5,500 business licenses, and a workforce of 11,000 people in ADGM Square. Last year, ADGM achieved a record increase of 56% in Assets Under Management and a 30% increase in active licenses.
Falcon Economy
Today, Abu Dhabi is soaring as the Falcon Economy of the region and garnering attention as the ‘capital of capital’, home to the largest sovereign wealth funds with trillions of dollars in AUM and a wide network of venture capital and family offices. The expansion of ADGM’s jurisdiction stands as a testament to it being the fastest-growing IFC in the region, in addition to its recently published achievements of 2022.
ADGM and its authorities are currently working with key government stakeholders and other local authorities to finalize the necessary transitional arrangements that cover the activities of all entities presently operating on Al Reem Island, including those engaged in the financial services industry. The relevant ADGM authority will contact the Al Reem island community with the transition process in due course.
Click here for more news on banking & finance.
