Published: Feb 2, 2024

Further Updates to ADGM’s Expansion into Al Reem Island

Abu Dhabi Global Market (“ADGM“) is an international financial centre in the Emirate of Abu Dhabi. As a Financial Free Zone formed under a federal decree, it is allowed to enact its own legislation. The original jurisdiction and territory of the ADGM was restricted to Al Maryah Island, Abu Dhabi. This is no longer the case.

What has changed?

The UAE Cabinet Resolution No. 41 of 2023 was enacted on 24 April 2023 and expands the jurisdiction and territory of the ADGM to Al Reem Island, Abu Dhabi.

Previously governed by UAE federal and Abu Dhabi local laws, Al Reem Island now forms part of the ADGM and falls under its legal system.

How does it impact you?

Al Maryah Island:

This development does not affect existing ADGM establishments.

Al Reem Island:

  • New Applicants: The Abu Dhabi Department of Economic Development (“DED“) has stopped issuing new commercial licenses for Al Reem Island addresses from 30 October 2023. New applicants in Al Reem Island must obtain a commercial license from ADGM.
  • Existing Entities: The following options are available:
  1. Continuance into ADGM: The DED entity may initiate a continuation application with the ADGM Registration Authority in order to obtain a commercial license from the ADGM on or before 31 December 2024. The entity will no longer be registered with the DED and will be governed by the regulatory framework of ADGM. The entity will be required to obtain ADGM visas for its employees and issue new employment contracts pursuant to the ADGM Employment Regulations.
  2. Migrate to Abu Dhabi mainland: The DED entity may continue to be registered with the DED. In this case, it is mandatory for the DED entity to obtain a physical office in the Abu Dhabi mainland. The entity may no longer hold the Al Reem premises and must relocate outside the ADGM Free Zone no later than 31 December 2024.

Please note that branches (as opposed to limited liability companies) existing in Al Reem Island and registered with the DED may not initiate a continuation application with the ADGM Registration Authority. They must register a new branch in ADGM under the same premise in Al Reem Island and proceed with cancellation of their branch license registered with the DED.

Dual Licensing Regime

In order to address concerns of conducting business in the Abu Dhabi mainland while holding an ADGM license, ADGM and the DED have in place an agreement to facilitate a dual licensing regime for entities registered with ADGM. Under this agreement, certain ADGM entities are eligible for mutual license recognition with the DED, provided they satisfy the respective licensing and regulatory requirements of each jurisdiction. This means that eligible ADGM entities may be permitted to service businesses in onshore Abu Dhabi without having an office presence on the mainland.

How can we help?

At Al Tamimi & Company, we regularly advise local, regional, and global financial institutions on matters concerning the ADGM. We would be delighted to assist you in better understanding this new development, as well as in relation to our services, which include assisting with the establishment within the ADGM, continuance into the ADGM, establishment in the Abu Dhabi mainland, business relocation from Al Reem Island, general advice on the implications of this resolution for your legal entity, and drafting ADGM employment contracts. We are fully committed to providing comprehensive support to HR/legal during the transition.