ADGM Announces Fee Waiver for Al Reem Businesses Until October 2024

November 12, 2023by Aparna T Nambissan0

ADGM Abu Dhabi Global Market-Al Reem Island. Al Maryah Island. Source ADGM.com

Updated on April 5, 2024

MoHRE-ADGM MoU Streamlines Work Permit and Licence Transfer

In a major boost to Al Reem Island businesses, the Ministry of Human Resources and Emiratisation (MoHRE) and the Abu Dhabi Global Market (ADGM) have entered into a new agreement aimed at simplifying the transfer of work permits and business licences to ADGM. This initiative is set to significantly ease the process for companies, promoting a more attractive and supportive business environment in the UAE’s capital.

Signed on Friday, the memorandum of understanding between MoHRE and ADGM is designed to enhance the ease of doing business in the region. According to MoHRE undersecretary Khalil Al Khoori, this collaboration will “boost the efficiency, attractiveness, and competitiveness of the UAE labour market” and ensure the provision of services with utmost ease and efficiency.

Abu Dhabi Global Market (ADGM) has designed an incentive to facilitate the transition of Al Reem Island businesses from the Abu Dhabi Department of Economic Development (ADDED) license to ADGM license. Qualifying businesses on the island will benefit from a fee waiver, exempting them from any charges associated with obtaining an ADGM commercial licence until the 31st of October, 2024.

Following a series of insightful focus group discussions with Al Reem Island businesses, ADGM recognized the need for additional support during this transition phase. This strategic initiative aims to alleviate financial pressures on businesses during their transition, ensuring a smooth and uninterrupted operation. ADGM’s decision reflects its commitment to fostering a supportive and business-friendly environment in Abu Dhabi’s premier international financial centre.

Hamad Sayah Al Mazrouei, CEO of ADGM Registration Authority said, “The seamless transition of existing businesses on Al Reem Island remains a top priority for ADGM. Our alignment with this objective has led to the introduction of the new incentive initiative aimed at assisting existing non-financial and retail businesses in Al Reem to obtain an ADGM commercial licence without incurring the fees attached to it. This will help mitigate any potential disruptions that these businesses might encounter when moving from an ADDED licence to an ADGM licence, enabling them to operate within ADGM’s jurisdiction, swiftly.”

  • Expands ADGM’s jurisdiction to Al Reem island in addition to Al Maryah island
  • With 1438 hectares, ADGM becomes one of the largest concentrated Financial Districts in the world
  • Existing Al Reem Island businesses must obtain an ADGM license before 31st December 2024, or when their ADDED license expires
  • A fee waiver exempts them from any charges for obtaining an ADGM licence until the 31st October, 2024.
  • ADGM businesses work under English common law and an independent court

Updated on February 10, 2024

The UAE Cabinet has recently announced a significant expansion of the jurisdiction of the Abu Dhabi Global Market (ADGM) to include Al Reem Island, aligning with the nation’s economic vision and ADGM’s strategic growth plan for 2023-2027. This pivotal move is anticipated to reinforce Abu Dhabi’s financial sector and solidify its standing as a prominent global financial center. The issuance of UAE Cabinet Resolution No. 41 of 2023, amending the Cabinet Decision No. 4 of 2013 regarding the Determination of the Location and Space of Global Marketplace Abu Dhabi, enhances the Emirate’s appeal to international businesses and underscores the government’s commitment to fostering a dynamic and globally competitive business environment in the Emirate.

Expansion Details

ADGM has officially declared the commencement of its operations on Al Reem Island, making it one of the largest financial districts globally.

Existing businesses on Al Reem Island are encouraged to obtain an ADGM license upon the expiration of their current Abu Dhabi Department of Economic Development (ADDED) license. They have until 31st December 2024 to do so. During this transition period, they are exempt from certain compliance requirements, allowing a smooth transition while ensuring legal compliance.

From 1st November 2023, all new businesses intending to establish their presence on Al Reem Island must secure a commercial license directly from ADGM. ADGM offers a business-friendly environment, direct application of English common law, and access to a robust ecosystem, making it an attractive destination for global businesses.

Key Advantages of Operating within ADGM

  • ADGM businesses benefit from the direct application of English common law and an independent court, ensuring a transparent and efficient legal framework.
  • ADGM’s strategic location provides access to global markets, capital, and talent, making it an ideal choice for international businesses.
  • ADGM is home to 1,590 entities and a workforce of 12,080 talented individuals, fostering collaboration, innovation, and business growth. The expansion project extends ADGM’s geographic footprint substantially, covering an area spanning nearly 14.3 million square meters.

Important Points to Note

Other Licenses: Apart from ADDED licenses, businesses must ensure compliance with any additional permits or licenses required under applicable federal or Abu Dhabi laws. ADGM recommends approaching the appropriate authorities for specific guidance.
Commercial Licenses: While commercial licenses are essential, they do not substitute for other necessary licenses. Businesses are urged to adhere to all legal requirements.

Step-by-step guide for a smooth transition into the ADGM

Here is a quick check list and step-by-step action guide for Al Reem businesses to ensure a smooth transition into the ADGM free zone jurisdiction:

Preliminary Check: Check to ensure your business activities are compliant with ADGM regulations. If you are not sure, consult a professional.

NOC from ADDED: Apply for an NOC from ADDED Mainland licensing authority for the transition.

Application to ADGM: Fill out the transfer application form, make necessary payments, and produce all the required documents to ADGM. Seek professional assistance if necessary.

Finalization with ADGM: Keep in touch with ADGM to finalize your license transfer and update your details accordingly.

Why Convert?
The transition to ADGM is not just a regulatory mandate but an opportunity for businesses on Al Reem Island to capitalize on the free zone’s advanced infrastructure, strategic location, and investor-friendly policies. ADGM’s legal and operational framework is designed to support business growth, innovation, and international competitiveness.

The mandate for Al Reem Island businesses to convert to an ADGM license represents a significant shift in Abu Dhabi’s economic landscape. It underscores the emirate’s commitment to fostering a dynamic, integrated business environment. By adhering to the outlined steps and deadlines, businesses can ensure a smooth transition to ADGM, positioning themselves for sustainable growth and success in the global marketplace.

REFERENCES

About ATB Legal

ATB Legal is a full-service legal consultancy in the UAE providing services in dispute resolution (DIFC Courts, ADGM Courts, mainland litigation management and Arbitrations), corporate and commercial matters, IP, business set up and UAE taxation. We also have a personal law department providing advice on marriage, divorce and wills & estate planning for expats. Please feel free to reach out to us at office@atblegal.com for a non-obligatory initial consultation.

by Aparna T Nambissan

Aparna is a legal consultant at ATB legal. She holds a Bachelor’s degree in Law and Commerce from Karnataka State Law University. She is enrolled with the Bar Council of Karnataka.

Leave a Reply

Your email address will not be published. Required fields are marked *

ten + 7 =