Dubai: Abu Dhabi is to become 'one of the world’s largest international financial districts' as the mandate of the Abu Dhabi Global Market is expanded. It comes with the addition of Al Reem Island, which increases the combined geographic area of ADGM to nearly 1,438 hectares - that's a whopping 14.37 million square metres.
The ADGM financial district will thus be 10 times greater than its current size. It follows the UAE Cabinet Resolution No. 41 for 2023 to expand the jurisdiction of Abu Dhabi Global Market as part of its economic vision. This also underlines ADGM’s Growth Strategy 2023-27, which aims to 'grow the financial sector of Abu Dhabi and position it as a leading global city with the sector becoming a key contributor to its GDP'.
Businesses licensed by ADGM and based at Al Reem Island will be able to tap 0 per cent 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 across financial centres worldwide," said Ahmed Jasim Al Zaabi, Chairman of the Abu Dhabi Department of Economic Development and ADGM.
"Global financial institutions, family offices, entrepreneurs and leading fintech talent continue to choose ADGM as the location from which they access a deep pool of capital and a wide range of investment opportunities that are available in Abu Dhabi," said Al Zaabi.
The new resolution expands ADGM’s jurisdiction as a 'financial free zone' to Al Reem Island, which is right next to its current base on Al Maryah Island. The decision follows increased demand from a 'range of international companies choosing Abu Dhabi as a preferred destination to expand and grow their businesses globally'.
By being based within the financial free zone’s jurisdiction, a qualifying business entity can benefit from the preferential corporate tax rate of 0 per cent on qualifying income.
"Combining our common law jurisdiction and pioneering regulatory framework across these two islands will unlock even greater economic opportunities," said Al Zaabi. "We look forward to engaging with all our strategic partners and stakeholders on how we can work together to realise this great ambition."
What happens to existing Al Reem Island entities?
ADGM is working with key government stakeholders and other local authorities to 'finalise the necessary transitional arrangements' that cover the activities of all entities now operating on Al Reem Island. It includes those engaged in the financial services industry.
"The relevant ADGM authority will contact the Al Reem island community with the transition process in due course," said the statement.
ADGM has to date 1,400 operating entities, 5,500 business licences and a workforce of 11,000 people in ADGM Square. Last year, ADGM had a 'record' increase of 56 per cent in AUM (assets under management) and a 30 per cent increase in active licences.
“Al Maryah Island is a thriving international financial centre, with occupancy already over 95 per cent and a strong pipeline of international companies wanting to expand or establish their footprint here," said Al Zaabi.
