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DUBAI: Abu Dhabi will become “one of the world’s largest international financial districts” as the mandate of the Abu Dhabi Global Market expands. It comes with the addition of Al Reem Island, increasing ADGM’s total geographic area to almost 1,438 hectares – a whopping 14.37 million square metres.
As a result, the ADGM financial district will be 10 times its current size. It follows UAE Cabinet Resolution No. 41 of 2023 to expand the jurisdiction of Abu Dhabi Global Market as part of its economic vision. It also underscores ADGM’s 2023-27 growth strategy, which aims to “develop Abu Dhabi’s financial sector and position it as a leading global city where the sector becomes a major contributor to its GDP”.
Businesses licensed by ADGM and located on Al Reem Island will be able to charge 0% corporate tax on their qualifying income.
“As ADGM, Al Maryah and Al Reem Islands will be one of the most attractive places to live and work in the global financial center,” said Ahmed Jasim Al Zaabi, Abu Dhabi Department of Economic Development and Chairman of ADGM.
“Global financial institutions, family offices, entrepreneurs and leading fintech talent continue to choose ADGM as their location for access to substantial capital and the wide range of investment opportunities available in Abu Dhabi,” said Al Zaabi.
The new resolution extends ADGM’s jurisdiction as a “financial free zone” to Al Reem Island, next to its current base on Al Maryah Island. The decision follows increased demand from “a range of international companies choosing Abu Dhabi as their preferred destination to expand and grow their businesses globally”.
By being located within the jurisdiction of a financial free zone, qualifying business entities can benefit from a preferential corporate tax rate of 0% on qualifying income.
“Combining our common law jurisdiction with a pioneering regulatory framework that spans both islands will unlock greater economic opportunity,” said Al Zaabi. “We look forward to working with all of our strategic partners and stakeholders Engage on how we can work together to realize this great ambition.”
What happens to the existing Al Reem Island entity?
ADGM is working with key government stakeholders and other local authorities to “complete the necessary transition arrangements” covering the activities of all entities currently operating on Al Reem Island. It includes those working in the financial services industry.
“The relevant ADGM authorities will contact the Al Reem Island community in due course with regard to the transition process,” the statement said.
To date, ADGM has 1,400 operating entities, 5,500 business licenses and 11,000 employees in ADGM Plaza. Last year, ADGM saw “record” growth in AUM (assets under management) and a 30% increase in active licenses.
“Al Maryah Island is a thriving international financial center with an occupancy rate already above 95% and a high number of international companies looking to expand or establish their footprint here,” said Al Zaabi.
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