ADGM has announced amendments to various regulations to provide transitional arrangements to support existing Al Reem Island businesses. These businesses will receive an exemption from compliance with ADGM’s registration and licensing requirements and certain regulations up to December 31, 2024. This is to allow them time to obtain the ADGM licences and permits necessary to operate after that date.
During this transitional period, existing businesses on Al Reem Island may choose to renew their Abu Dhabi Department of Economic Development (ADDED) licence or instead apply for an ADGM licence or permit. However, ADDED licences will not be valid for operation in ADGM beyond December 31, 2024.
ADGM is the financial district in Abu Dhabi. However, the free zone is not exclusive to the financial services business. Therefore, those companies whose business activities are for other services related to financial services and technology companies may also benefit from registering within the ADGM jurisdiction. Existing businesses, not financial services companies based on Al Reem Island, are not necessarily required to vacate the island, should they decide that remaining is the best option for their business and successfully register for a new licence.
The current rates for a new business license inside ADGM are comparable to other relative jurisdictions. However, expanding the ADGM free zone to encompass Al Reem Island could be expected to further normalise the ADGM licensing rate as the free zone will experience an increase in available space and availability, which will likely make the licensing fees increasingly accessible, noting that nothing official has been announced by ADGM in relation to that yet. Similarly, the licensing fees for a company outside of the ADGM free zone, in the Abu Dhabi mainland with ADDED, are like those of other relevant available jurisdictions in the wider UAE.
There is a particularly incentivised rate available for certain technology company licences in the ADGM, so it is a reasonably popular jurisdiction for companies in the technology industry to register with. In Abu Dhabi, several government-led incentives for start-up companies, or even specific industries, are available for eligible businesses that can further help reduce certain set up costs.
The ideal jurisdiction in Abu Dhabi for a company can depend on the needs and goals of the particular company, their business activity, or its target audience. Some businesses looking to establish in the UAE’s capital city may find they are best suited to register under a mainland licence, an ADGM licence, or both, or set up as a branch office. All businesses are therefore encouraged to assess their business activity, service, clientele, and whether registering for a mainland licence or ADGM free zone licence would be best suited.
