The financial centre in the capital of the UAE, the Abu Dhabi Global Market (ADGM), has recently announced a new initiative to significantly revise the fees for all business licence categories, effective from January 1, 2025. This update aligns with its efforts to support the seamless transition for businesses on Al Reem Island following its expansion to be included in the ADGM jurisdiction. From the beginning of next year, ADGM is set to implement reductions of over 50% to non-financial and retail business licences. The initiative to expand ADGM’s jurisdiction to include Al Reem Island is expected to extend the physical space available to the Free Zone and enhance the business ecosystem to be more attractive and accessible to a wider variety of enterprises.
A set date of January 1, 2025, when the revised fees take effect, aligns with the end of the current transitionary period that the zone is going through, to finish at the end of the year, on December 31 2024. The updated business licencing fee structure will then apply to the whole ADGM area, encompassing Al Reem Island and Al Maryah.
The notion of amending the fees associated with establishing ADGM was initially discussed in consultations last year by ADGM and a group of representative businesses from Al Reem Island, intending to ascertain insights in preparation for the expansion. These discussions focused on key topics such as the general ease of obtaining a licence and relevant fees. As a result of these deliberations, the ADGM’s Registration Authority produced a revision of its fees and processes to achieve the desired regulatory business environment for the expansion and to ensure a seamless transition for the new businesses under its remit.
With the amendments to the cost of establishing in the jurisdiction, new registrations of non-financial businesses will experience a licencing fee change, reducing 50%. Similarly, the annual renewal fees for these licences are set to decrease by $3,000. These significant licencing fee reductions are also reflected for those businesses falling under the retail category, with new registrations dropping a full two-thirds of what they were prior to the change and renewals falling 50%. Certain qualifying non-financial and retail businesses located on Al Reem Island, should they initiate their ADGM licence registrations before the cut-off date, October 31 2024, will be exempt from the initial business registration fees with the financial centre.
The fee updates for other business licence categories in ADGM include financial licences, which are increasing by $5,000, and renewals, which are increasing by $2,000. For businesses under a startup licence for technological or fintech companies, their fees are being updated, increasing by $500, which applies to both existing and new licence renewals. However, not all fees are being updated; for example, the fees for Special Purpose Vehicles (SPVs) remain the same.
The full effect and outline of these new fee updates will be implemented for new registrations and renewals within the expanded ADGM zone as of January 1, 2025, and will be made public in December of this year.
