ADGM completes integration of Al Reem Island into its jurisdiction

In recent years, Abu Dhabi, the capital of the United Arab Emirates (UAE), has been strengthening its status as a global financial powerhouse. The successful integration of Al Reem Island into ADGM’s jurisdiction represents another important milestone in Abu Dhabi’s vision to be a destination of choice for regional and global financial institutions and other business entities.

The expansion was a directive of the UAE Cabinet Resolution No. 41 for 2023, expanding ADGM’s jurisdiction to including the neighboring Al Reem Island in addition to existing Al Maryah Island, increasing its footprint by tenfold.

The expansion’s impact

ADGM’s expansion is designed to further strengthen Abu Dhabi’s financial ecosystem, providing a more dynamic and competitive platform for businesses and investors. This expansion meets the rising demand from global entities seeking to establish and scale their presence within ADGM, leveraging its strategic location, business-friendly environment, robust regulatory framework, and state-of-the-art infrastructure.

Since the expansion was announced in April 2023, more than 600 new businesses have set up on Al Reem Island and over 500 Al Reem Island-based companies have migrated to an ADGM license, adding a total of 1,100 new entities operating under the jurisdiction of ADGM, and further strengthening ADGM’s role as a premier business hub.

This achievement reflects both the confidence businesses place in ADGM’s governance and the strength of its value proposition. Additionally, Al Reem Island adds 500,000 square meters of prime office space, tailored to modern business needs, backed by top-notch digital infrastructure, dedicated client support teams, and access to an extensive global network. This expansion has stimulated investments and new employment opportunities, with over 600 first-time registrations in Al Reem Island since November 2023.

Read: ADGM achieves record growth in 2024 with 245 percent surge in AUMs

Why businesses choose ADGM

ADGM has gained global recognition for its investor-friendly environment through a combination of robust regulatory frameworks, transparency, and legal certainty with the direct application of the English Common Law.

With easy-to-comprehend legal principles and flexible policies, companies can operate with confidence within ADGM. Aligning with global standards, ADGM has been successful in attracting global enterprises and startups alike, fostering a vibrant business hub.

Today, ADGM continues to drive change by building a world-class business district that fuels growth and innovation. It’s at the forefront of supporting Abu Dhabi’s vision for economic diversification, and the Al Reem Island expansion has been a key step in the IFC’s journey.

Seamless transition

Since November 1, 2023, new businesses on Al Reem Island have been required to obtain an ADGM commercial license instead of an ADDED license. To facilitate a seamless transition, ADGM implemented several initiatives to support businesses during the transition. Additionally, ADGM and ADDED agreed to continue business as usual for existing Al Reem Island businesses until year-end 2024.

In January 2024, ADGM launched an information center in Shams Boutik Mall dedicated to facilitating engagement with the Al Reem Island business community, providing them with comprehensive support on licensing, documentation, and compliance matters. ADGM also established information booths in ADDAX and Tamouh towers providing similar services.

To create wider awareness across Al Reem Island businesses, ADGM hosted several community events. The first event was held in March 2024, at Sorbonne University with over 500 business representatives attending the event. ADGM conducted the second one in July 2024, attracting over 150 representatives and continued to hold several targeted outreach sessions throughout the year 2024. The topics included updates on licensing, registration fees, visas, and the overall transition process.

ADGM also held focus group meetings of Al Reem Island businesses to better understand their needs and challenges. In response to their feedback, ADGM launched a special incentive for non-financial and retail businesses on the island, with qualifying businesses getting exempted from paying any fees for obtaining an ADGM commercial license until October 31 last year. This initiative was further extended till December 31, 2024, to support Al Reem Island businesses.

“To facilitate a seamless transition, ADGM and its Registration Authority have proactively introduced various initiatives, prioritizing our business community at the core of every decision,” Hamad Sayah Al Mazrouei, CEO of ADGM Registration Authority, said.

As attested by Hana Saad Mohammad, managing director at Federal Properties — one of the Al Reem-based businesses that obtained an ADGM license — ADGM has been supportive of their transition.

“From the initial consultation to the final transition, their commitment and expertise made the entire process seamless and effortless. We are thrilled to now be part of ADGM’s vibrant community and look forward to the opportunities and resources it will bring to our company,” Mohammad said.

Boosting real estate

In September 2024, as part of the IFC’s efforts to support businesses during the transition, ADGM signed a Memorandum of Understanding (MoU) with the Department of Municipalities and Transport (DMT) to transfer real estate services on Al Reem Island to ADGM.

Since the announcement of the Al Reem Island expansion, there has been a surge in residential units, adding 1,266 new residential units added by mid-2024, bringing the total to 21,335. Occupancy rates have surged from 85 percent in March 2023 to 93 percent by June 2024.

A month after the signing of the MoU, ADGM introduced enhancements to its Real Property Regulations, launched new off-plan development rules, and unveiled AccessRP -a unified digital platform to streamline real estate transactions. These initiatives were aimed at driving growth, innovation, and investments in ADGM’s real estate sector.

The updated regulatory framework includes provisions for short-term residential leases, off-plan development and sales, escrow arrangements, and a new registration system for real estate professionals, such as brokers, valuers, and property managers.

Commenting on the significance of these new developments, Al Mazrouei said: “These enhancements will attract local and foreign investments to ADGM as the preferred destination to live, work and invest, and will pave the way for a new phase of growth, prosperity, and development in the real estate sector not just for ADGM but for Abu Dhabi as well.”

What’s next for ADGM?

In January 2025, ADGM introduced a revised fee schedule significantly reducing costs for obtaining and renewing an ADGM commercial license for non-financial and retail businesses within its jurisdiction.

Under the updated fee structure, non-financial businesses saw their initial registration fees drop from $10,000 to $5,500, while annual renewal fees decreased from $8,000 to $5,000. Similarly, retail businesses saw a reduction in initial registration fees from $6,000 to $2,500, with renewals lowered from $4,000 to $2,000.

As part of the updated fee structure, adjustments have also been made to other business categories. For financial businesses, the initial registration fee has increased from $15,000 to $16,700, while annual renewal fees have risen from $13,000 to $16,200. Tech startups will see their registration and renewal fees adjusted from $1,000 to $1,500.

Additionally, a $300 data protection fee will continue to apply to all business categories at the time of new registration and annual renewal under the revised fee schedule. The new schedule coincided with the completion of the Al Reem Island transition period on December 31, 2024.

With the integration of Al Reem Island complete, ADGM is poised to play a pivotal role in Abu Dhabi’s economic diversification journey, driving growth in business, real estate, and tourism. As one of the world’s largest financial districts, it continues to shape the future of global finance.

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