Off the coast of Abu Dhabi, the thriving urban hub of Al Reem Island has become a center for diverse commercial, residential, and retail developments, attracting business and residents alike. In April 2023, following the issuance of UAE Cabinet Resolution No. 41, the island was officially brought under the jurisdiction of Abu Dhabi Global Market (ADGM), the capital’s premier international financial center. This decision has further positioned Al Reem Island as a key player in Abu Dhabi’s economic and financial landscape, transforming it into a future hub for global investments and cutting-edge business ventures.
With this resolution, ADGM’s jurisdiction has expanded tenfold, now encompassing both Al Maryah Island and Al Reem Island, further elevating ADGM’s status on the global stage.
“This expansion marks a significant milestone in ADGM’s rapid growth trajectory, achieved within just eight years since its establishment. Post expansion, ADGM has become one of the largest financial districts in the world, covering a total of 14.38 million square meters,” said Hamad Al Mazrouei, chief executive officer of ADGM Registration Authority.
Seamless expansion and transition
ADGM commits to making its services more accessible and responsive to the evolving needs of the business communities, according to Al Mazrouei. “The expansion aligns with Abu Dhabi’s diversification strategy, where the financial sector will continue to play a pivotal role in the UAE’s economy and vision for the future,” he added, emphasizing that the move “serves as compelling evidence of ADGM’s evolution into a premier destination for local, regional, and global entities.”
As part of this expansion, a new mandate requires that starting November 1, 2023, all new businesses intending to establish operations on Al Reem Island must secure a commercial license from ADGM instead of the Abu Dhabi Department of Economic Development (ADDED).
To ensure a smooth transition for existing businesses on Al Reem Island, ADGM and ADDED have agreed on a transitional arrangement. This allows these businesses to continue operating under their current ADDED licenses until December 31, 2024, after which, all ADDED licenses for businesses on Al Reem-located will be invalid.
Collaboration with key government stakeholders
In preparation for this significant transition, ADGM has been collaborating closely with key government stakeholders, including the Ministry of Human Resources and Emiratization (MoHRE), ADDED and Abu Dhabi City Municipality (ADM). “We have successfully completed 10 agreements to facilitate a seamless transition, allowing business operations to continue with minimal to no disruptions” Al Mazrouei stated.
Commenting on this transition, Nawras Assaf, group HR operations and admin manager at Ghassan Aboud Group (GAG), shared his positive experience: “Our transition to the ADGM License was remarkably smooth, thanks to the well-structured process and support we received from ADGM.”
“The clear guidance provided at each step made the migration from the Mainland to ADGM on Al Reem Island straightforward and hassle-free,” he added. His remarks highlight not only the efficiency of the process but also the comprehensive support offered by ADGM to ensure the business faces minimal disruption during the transition process.
Echoing this sentiment, Said Abu Laila, chairman of Property Shop Investment praised ADGM’s regulatory framework for its clarity and structure. “The transition was facilitated by ADGM’s comprehensive and transparent regulatory framework, which provided us with clear legal guidelines. This structured approach allowed us to efficiently align our operations with ADGM’s compliance standards, ensuring a smooth transition”. His comments further underscore the confidence that businesses have in ADGM’s meticulous approach to supporting this large-scale migration of businesses on Al Reem Island.
Benefits for Al Reem businesses
The expansion of ADGM brings several notable benefits to businesses on Al Reem Island. One of the most significant is the ability to operate under the only jurisdiction in the region that directly applies the English Common Law. This legal framework is particularly appealing to international companies, offering them a familiar and trusted legal environment, which can help mitigate the risks and provide greater confidence in business operations.
Additionally, businesses on Al Reem Island will benefit from seamless transactions and streamlined operations through ADGM’s comprehensive range of easy-to-access services. These include a unified digital and physical platform for license registration, immigration services, and other business support functions, designed to simplify and accelerate processes.
Al Mazrouei emphasized that “with the inclusion of Al Reem Island into its geographical domain, ADGM is solidifying its status as a comprehensive and cohesive ecosystem.”
Growing ecosystem’s advantages
ADGM’s vibrant ecosystem now provides access to over 1,800 operational businesses, including asset managers, global funds, financial institutions, leading advisors, law firms, capital providers, tech and digital companies, and family offices.
Said Abu Laila further highlighted the advantages of being part of this growing ecosystem. “The benefits of obtaining an ADGM license have been substantial, providing us with enhanced legal credibility, access to a tax-efficient environment, and greater opportunities for strategic partnerships. Additionally, being part of the ADGM network has positioned us alongside leading global investors and corporations, further strengthening our market presence and facilitating our long-term growth objectives in the real estate sector.”
Al Reem Island’s inclusion in ADGM is a natural fit, given its wide array of commercial and residential structures, shopping centers, top-tier educational institutes, advanced healthcare facilities, hospitality venues, luxury amenities, and entertainment options.
“The attributes of Al Reem Island perfectly complement ADGM’s stable and robust legal and regulatory environment, which includes the direct application of English Common Law, flexible and progressive regulatory frameworks, ease of doing business, access to talent and expertise, and access to capital through diverse financial instruments and funding options,” said Al Mazrouei.
Initiatives post-expansion
Following the expansion, ADGM introduced several regulatory amendments to facilitate a smooth transition for existing businesses on Al Reem Island.
To further support these businesses, ADGM launched an information center in Shams Boutik Mall, Al Reem Island. This center is designed to foster direct engagement with the island’s business community and offer essential assistance.
In March, ADGM hosted the inaugural Al Reem Island community gathering, which saw the participation of over 500 representatives. This event aimed to strengthen connections with the local businesses. A second gathering took place in July, focusing on critical updates on licensing, registration fees, and transition processes.
To encourage more existing businesses operating in the non-financial and retail sectors to obtain their ADGM commercial license, ADGM also introduced an incentive program. Under this initiative program, businesses can secure their ADGM license without incurring any fees if they complete the process by October 31, 2024.
“This proactive measure is designed to facilitate a seamless transition for these businesses, allowing them to sustain their operations without additional financial obligations as they transition from being an ADDED licensed entity to an ADGM one,” said Al Mazrouei.
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ADGM’s Al Reem Island expansion fuels real estate sector
Since the announcement of ADGM’s expansion in April 2023, Al Reem Island has witnessed substantial growth, with the introduction of 1,266 new residential units, raising the total to 21,335 units. Additionally, commercial space occupancy is expanding to meet a growing demand, increasing by 5 percent.
The expansion has also influenced the residential choices of many employees from newly established companies within ADGM’s jurisdiction, with an increasing number opting to live and work in Al Reem Island.
Furthermore, ADGM has announced a 50 percent or more reduction on registration and renewal fees for non-financial and retail licenses within its jurisdiction, including Al Maryah and Al Reem Island. These revised fees will take effect from January 1, 2025, after the current transition period ends on December 31.
The expansion of ADGM to Al Reem Island highlights the evolving landscape of Abu Dhabi’s financial sector. This growth extends beyond the geographical expansion to encompass enhanced legal frameworks, improved incentives, and more robust support systems. As ADGM establishes itself as a premier global financial hub, businesses and investors alike can anticipate new opportunities for innovation, strategic partnerships, and sustained success.
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