Understanding the ADGM’s Expansion Journey to Al Reem Island

HLB HAMT Management Consultancy (HHMC) Team

The United Arab Emirates (UAE) has taken a significant step in expanding UAE global market (ADGM) by including Al Reem Island into its jurisdiction through Cabinet Resolution No. 41 of 2023.

The UAE Global Market (ADGM), previously confined to Al Maryah Island, has expanded its reach to encompass Al Reem Island as well.

This strategic move aligns perfectly with UAE’s economic diversification goals, transforming ADGM into a potential frontrunner for the title of the world’s largest financial hub. In the following sections, we’ll delve deeper into the critical updates surrounding this exciting expansion.

ADGM’s Strategic Expansion to Al Reem Island

UAE Global Market (ADGM), the emirate’s thriving free zone established in 2015 on Al Maryah Island, has marked a significant milestone. Since then, ADGM has been evolving in an excellent manner by attracting many international businesses and making the place a highly renowned financial hub in UAE.

In this case, on April 24, 2023, the cabinet decided to include Al Reem as a part of the ADGM free zone area. Hence, Al Reem Island now falls under the legal jurisdiction of ADGM.

This expansion decision was made as part of ADGM’s Growth Strategy for 2023–2027, which aims to strengthen ADGM as a world-class financial hub and make ADGM a perfect place for doing global business.

By attracting a multitude of international businesses and fostering a renowned financial ecosystem, ADGM has flourished on Al Maryah Island. Now, with Al Reem Island joining the fold, ADGM’s territorial reach has expanded to a staggering 14.3 million square meters.

Post-Expansion of ADGM

The inclusion of Al Reem Island in the ADGM free zone area invited lots of changes for the island. With Al Reem Island becoming part of the ADGM free zone, existing businesses previously registered under the UAE Department of Economic Development (ADDED) face a period of change. Here’s what you need to know:

Shifting Jurisdictions: The legal and regulatory landscape for Al Reem Island businesses is transforming because The Al Reem businesses were previously operating under the UAE Department of Economic Development (ADDED), but these businesses will fall under the purview of ADGM post expansion.
New Licences Required: To continue operating legally within Al Reem Island, businesses must obtain a new license from ADGM. This ensures they comply with the ADGM-free zone’s regulations and legal framework.
Transitional Period: According to the transitional agreement, authorities have provided a grace period. Businesses have until December 31, 2024, to acquire their new ADGM licences.
Post-Transition Implications: Come January 1, 2025, ADDED licenses will no longer be valid for operating within Al Reem Island. Businesses that fail to obtain an ADGM license by the deadline will face potential legal ramifications.
New business: A person who wants to start a new business in Al Reem after November 1, 2023. They have to get their license and registration work from ADGM only, not ADDED.

ADGM’s All-in-One Services Benefit Al Reem Businesses

The recent expansion of the UAE Global Market (ADGM) to encompass Al Reem Island unlocks a treasure of benefits for businesses and investors. Here’s how:

Strong legal foundation: ADGM operates based on the internationally recognized English common law. Hence, Al Reem Island’s jurisdiction also follows the same English law, which is more renowned for its transparent and flexible nature. Therefore, it promotes a healthy business environment in Al Reem.
All-in-one services: Al Reem businesses can get licenses, business registration, set-up services, and immigration services in one portal alone because ADGM regulations host all these services on one platform, simplifying multiple set-up processes.
Digitalization:All the services can be registered online. There is no need for hefty paperwork in Al-Reem businesses as well.
The ADGM community: Because of the ADGM expansion announcement, Now Al Reem has also become part of the ADGM community so that they gain access to a network of over 1600 established businesses within ADGM and get connections with asset managers, global funds, financial institutions, legal experts, and tech companies. They can also participate in renowned events like UAE Finance Week, which fosters valuable connections.
Global reach: As ADGM Free Zone is located in a strategic position, it offers a gateway for the business to a more significant marketplace, and in addition to that, they can get the utmost infrastructure and tools to elevate their business more globally.

Bottom line

The integration of Al Reem Island into the UAE Global Market (ADGM) marks a transformative chapter, propelling the free zone towards becoming a more significant international financial hub to attain the Falcon economy. This strategic move not only empowers ADGM but also unlocks tremendous development potential for Al Reem Island, attracting a wave of global investors.

The meticulously planned transition ensures a smooth adaptation process. Businesses on Al Reem Island are welcomed into a world of opportunities, as evidenced by ADGM’s first community event specifically designed for them.

ADGM Expansion: HLB HAMT Management Consultancy (HHMC) by Your Side!

HLB HAMT Management Consultancy (HHMC) Management Consultants, a trusted advisor to financial institutions, is here to help you navigate the ADGM expansion. We offer expertise in:

Establishing or continuing your business within the ADGM
Setting up on the UAE mainland
Relocating from Al Reem Island
Understanding the legal implications
Drafting ADGM employment contracts

Moreover, Our expertise extends to ADNOC compliance, auditing, navigating NPCC requirements, corporate tax assistance, handling PRO services, and vendor registration. Don’t hesitate to reach out!