On 10 April 2025 the Abu Dhabi Global Market (ADGM) Board published the Commercial Licensing Regulations (Exemptions) Order 2025 (“2025 Order”), issued under section 8(1) of the Commercial Licensing Regulations 2015. The new instrument revokes and replaces the 2024 order, tightening the criteria for who may operate in ADGM without holding a commercial licence (en.adgm.thomsonreuters.com).
Legislative Setting
Section 8 of the Commercial Licensing Regulations 2015 authorises the ADGM Board to designate “exempt persons” who may carry on activities in the free zone without a Commercial Licence. The 2025 Order is the latest exercise of that power and must be read alongside the core Regulations (en.adgm.thomsonreuters.com).
Who Qualifies as an “Exempt Person” Under the 2025 Order?
Pre-ADGM Government-Related Bodies
A body corporate created by a Ruler’s decree or other UAE federal legislation and already physically located on Al Maryah Island before ADGM was founded remains exempt, together with any wholly-owned subsidiary of that body.
Multilateral Development Banks
The International Bank for Reconstruction and Development and the International Development Association (together, the “World Bank”), plus the Asian Infrastructure Investment Bank, are expressly exempt.
Insolvency Practitioners
A natural person registered as an insolvency practitioner under the ADGM Insolvency Regulations (Insolvency Practitioner Rules 2022) is exempt for the purposes of acting in that capacity (en.adgm.thomsonreuters.com).
Transitional Relief for Al Reem Island Licensees
Any person already licensed by the Abu Dhabi Department of Economic Development (ADDED) to conduct business from premises on Al Reem Island may continue to do so without an ADGM license, provided the activity stays within the scope of the existing ADDED license. Once an ADGM license is granted, the exemption ends.
“Exempt Persons” Under the Financial Services and Markets Regulations
Entities that the FSRA has deemed exempt under Schedule 3, paragraph 2 of the Financial Services and Markets Regulations 2015 can rely on that status inside ADGM if they also hold a valid ADDED license for their activities. Loss of the FSRA exemption automatically ends the commercial-licensing exemption en.adgm.thomsonreuters.com).
Specified Class – Mobility & Delivery Providers
UAE-mainland licensees that rent electric bikes or scooters, rent manual bicycles, provide courier/delivery services, or offer ride-hailing or other land/water passenger transport inside ADGM without setting up a permanent establishment are exempt. Any permanent-establishment presence, or provision of a controlled activity through someone else’s ADGM premises, voids the exemption (en.adgm.thomsonreuters.com).
Conditions, Limits and Fallout
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- No blanket waiver of other laws. Exempt status removes only the obligation to hold a Commercial License. Entities must still comply with other directly applicable ADGM legislation—e.g., data-protection, employment, economic-substance or beneficial-ownership rules.
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- Ongoing location and activity tests. Several exemptions hinge on the entity’s physical location, scope of activity and continued possession of a valid mainland license. If any element lapses, the exemption falls away automatically.
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- Interaction with Controlled-Activity Rules. An exempt person is still barred from conducting any activity classified as “controlled” under the Commercial Licensing Regulations unless another legal basis applies.
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- Due-diligence duty for counterparties. Businesses contracting with an exempt person should verify (i) that the exemption category genuinely applies and (ii) that no permanent establishment arises that might require ADGM licensing.
Practical Action Points
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- Map Counterparties: Screen existing suppliers, tenants and customers against the new Schedules 1 and 2 to confirm whether they remain exempt.
- Monitor Transitional Deadlines: Al Reem Island licensees have a clear sunset date; flag 31 December 2024 in compliance calendars.
- Review Group-Structure Footprint: Multinationals with mobility-service arms or insolvency-practice units operating in ADGM need to ensure they do not accidentally create a permanent establishment.
- Update Contract Language: Where relevant, insert representations that the counterparty qualifies as—and will remain—an exempt person under the 2025 Order.
The 2025 Order clarifies and narrows ADGM’s exemption landscape, embedding stricter conditions and clearer sunset provisions. In-house counsel and compliance teams should revisit licences, service agreements and location footprints now to confirm that business lines still meet the new thresholds.
