by EASTERN SANDS 
Abu Dhabi Extends Financial Free Zone to Al Reem Island
Abu Dhabi is on track to establish itself as one of the world’s largest and most influential international financial districts, bolstered by the recent issuance of UAE Cabinet Resolution No. 41 for 2023. This critical resolution expands the jurisdiction of the Abu Dhabi Global Market (ADGM), the capital city’s prestigious international financial center, in line with the UAE’s economic vision. This strategy places a thriving financial sector at the heart of Abu Dhabi’s diversification goals, ensuring the emirate remains a global financial powerhouse.
The expansion, which now includes Al Reem Island, brings ADGM’s total geographical footprint to nearly 1438 hectares (~14.3 million sqm), making it ten times larger than its previous boundaries. This article will explore how the expansion of ADGM’s jurisdiction to Al Reem Island strengthens Abu Dhabi’s position in the global financial landscape, the opportunities this presents for businesses, and what this means for Abu Dhabi’s broader economic growth strategy.
ADGM Expansion: Why Al Reem Island?
The inclusion of Al Reem Island under ADGM’s jurisdiction is a strategic move, driven by increasing demand from global companies choosing Abu Dhabi as a base to expand and grow their international operations. Al Reem Island is adjacent to ADGM’s current home on Al Maryah Island, and its addition provides a vital extension to accommodate the growing pipeline of international businesses seeking to establish a presence in Abu Dhabi.
Al Maryah Island is currently operating at over 95% occupancy, with strong demand from companies looking to enter or expand in the region. This expansion allows ADGM to offer more space, which is critical as more companies recognize Abu Dhabi’s potential as a global financial hub. The larger neighboring Al Reem Island presents an abundance of opportunities, offering access to a wide range of office spaces, as well as world-class residential, educational, medical, and lifestyle facilities.
Why Abu Dhabi? The Strategic Vision
This expansion aligns perfectly with **Abu Dhabi’s Economic Vision 2030**, a long-term roadmap designed to reduce reliance on the oil sector and diversify into areas such as finance, technology, and other knowledge-based industries. ADGM plays a pivotal role in this vision, particularly through its Growth Strategy 2023-2027, which aims to grow Abu Dhabi’s financial sector and position the city as one of the world’s leading international financial centers. A thriving financial industry is set to become one of the key contributors to the emirate’s GDP, enhancing Abu Dhabi’s standing on the global stage.
Abu Dhabi has garnered attention as the “capital of capital,” home to some of the world’s largest sovereign wealth funds, such as Mubadala and the Abu Dhabi Investment Authority (ADIA). The expansion of ADGM supports the city’s ability to leverage its deep pool of capital, a network of venture capitalists, family offices, and a diverse array of investment opportunities. By expanding into Al Reem Island, Abu Dhabi is strategically positioning itself to meet growing international demand for its unique business environment.
Key Benefits of the Al Reem Island Expansion for Businesses
The expansion of ADGM’s jurisdiction to Al Reem Island introduces a host of benefits for companies that choose to establish operations within this world-class financial district. These benefits include:
1. 0% Corporate Tax on Qualifying Income
Businesses operating within ADGM’s jurisdiction, including the newly added Al Reem Island, can benefit from a 0% corporate tax rate on qualifying income. This preferential tax rate is a key factor in attracting international businesses, especially financial services companies, startups, and multinational corporations looking to optimize their tax exposure.
2. Full Foreign Ownership
In ADGM’s free zone, companies are allowed 100% foreign ownership, meaning that international investors and entrepreneurs can retain full control of their businesses without the need for local partners or sponsors. This is a significant advantage, as it allows companies to operate with greater autonomy and flexibility.
3. Business-Friendly Regulatory Environment
ADGM is recognized globally for its pioneering regulatory framework, which is based on English common law. This transparent and business-friendly legal environment ensures that companies operating within ADGM enjoy a high level of confidence in their legal and financial dealings. The financial free zone is well-regarded for its regulatory clarity, making it easier for businesses to navigate complex compliance requirements.
4. Flexible Office Spaces and World-Class Infrastructure
Al Reem Island offers a wide range of office spaces that cater to companies of all sizes, from startups to large multinationals. The island is equipped with world-class infrastructure, making it an ideal environment for business operations. The presence of high-quality residential, educational, and healthcare facilities further enhances the appeal of Al Reem Island as a place where employees and their families can enjoy a high quality of life.
A Growing Financial Hub: ADGM’s Achievements and Future Prospects
In just eight years, ADGM has become one of the fastest-growing international financial centers (IFCs) in the region. As of 2022, ADGM supported 1,400 operating entities, issued 5,500 business licenses, and housed a workforce of **11,000 people**. ADGM’s growth is reflected in a 56% increase in Assets Under Management (AUM) last year, as well as a 30% increase in active licenses.
With these impressive milestones, ADGM continues to attract global financial institutions, fintech companies, family offices, and venture capitalists. By expanding into Al Reem Island, ADGM is preparing to accommodate even more businesses, further cementing Abu Dhabi’s status as a global financial hub.
ADGM and Al Reem Island: Unlocking Greater Economic Opportunities
The expansion of ADGM to Al Reem Island is not just about increasing the physical size of the financial district; it’s about unlocking greater economic opportunities for both businesses and the wider Abu Dhabi economy. As the financial sector continues to grow, so too will its contribution to Abu Dhabi’s GDP, driving economic diversification and creating a more resilient and sustainable future for the emirate.
According to Ahmed Jasim Al Zaabi, Chairman of the Abu Dhabi Department of Economic Development and ADGM, “This expansion provides us with a unique opportunity for Abu Dhabi to reinforce its position as a world-leading international financial center and a global destination of choice.
” By combining ADGM’s common law jurisdiction and pioneering regulatory framework across Al Maryah and Al Reem Islands, the emirate is creating a financial ecosystem that will attract more international companies, investors, and talent.
Transition Process for Al Reem Island Businesses
With the expansion of ADGM’s jurisdiction, businesses already operating on Al Reem Island will need to transition into the financial free zone. ADGM and its authorities are currently working closely with key government stakeholders and local authorities to finalize the necessary arrangements. Businesses engaged in financial services on Al Reem Island will be contacted by ADGM authorities regarding the transition process, ensuring a smooth and seamless integration into ADGM’s regulatory framework.
Conclusion: Abu Dhabi’s Financial Future is Bright
The expansion of ADGM’s jurisdiction to include Al Reem Island is a monumental step in Abu Dhabi’s journey to becoming one of the world’s largest and most influential financial centers. This move aligns perfectly with the emirate’s long-term economic goals, offering international businesses a unique combination of tax incentives, a business-friendly regulatory environment, and access to some of the largest pools of capital in the world.
At Eastern Sands Real Estate, we are ready to assist businesses and investors looking to capitalize on the opportunities presented by this expansion. Whether you are seeking premium office space, residential properties, or guidance on setting up your business in ADGM’s free zone, we are here to help you navigate this exciting new chapter in Abu Dhabi’s financial landscape.
Contact Us :
WhatsApp: https://wa.link/l3lp9b
WebSite: EASTERN SANDS REAL ESTATE (esandsproperty.com)
Reference :
