A Comprehensive Guide for Al Reem Island Businesses with Incentives and Deadlines

A Comprehensive Guide for Al Reem Island Businesses with Incentives and Deadlines
by Aswani

The Abu Dhabi Global Market (ADGM) recently announced a significant expansion of its free zone jurisdiction, encompassing Al Reem Island effective April 24, 2023. This strategic move strengthens ADGM’s position as a premier global financial center and offers exciting opportunities for businesses on Al Reem Island.

To ensure a seamless transition and support existing businesses during this period, the government has introduced a series of incentive programs specifically tailored to Al Reem Island companies. This blog will provide a comprehensive overview of these incentive initiatives, outlining their benefits.

Registration Fee Waiver & Reduced Costs

As part of its overall welcome package, the ADGM Registration Authority (ADGM RA) has further revised its fees associated with registration and continuation for legal entities joining ADGM:

  • Save on Registration: ADGM RA has waived all fees associated with registration of Category B (non-financial businesses) and Category C (retail businesses) relocating to ADGM. This incentive is valid until October 31st, 2024.
  • Reduced Continuation Fees: The ADGM RA has also waived the $7,500 continuation fees for businesses continuing their operations under ADGM. This benefit applies until December 31, 2024.
    These additional incentives further reduce the financial burden on businesses transitioning to the ADGM free zone.

Who can be eligible for this incentive?

The ADGM’s commercial license fee waiver program is designed to specifically benefit established businesses on Al Reem Island. Here’s a breakdown of the eligibility criteria:

  • Location: Your business must be physically located on Al Reem Island.
  • Business Sector: Your business must operate within the non-financial or retail sectors.
  • Existing Business: You must be an established business, not a new venture seeking registration.

Al Reem Island Businesses Transition Guide

The recent inclusion of Al Reem Island within the ADGM free zone presents both challenges and opportunities for existing businesses on the island. This guide aims to clarify the key changes and provide a roadmap for a smooth transition:

  • Shifting Regulatory Landscape: Previously governed by the Abu Dhabi Department of Economic Development (ADDED), Al Reem Island businesses will now operate under the legal and regulatory framework of ADGM.
  • New Licensing Requirement: To maintain legal operation within Al Reem Island, businesses must obtain a new commercial license issued by ADGM. This ensures compliance with the free zone’s regulations.
  • Grace Period for Transition: A transitional period has been established, granting businesses until December 31, 2024, to acquire their new ADGM licenses. This time frame allows for a smooth transition and familiarization with the new regulatory environment.
  • Post-Transition Implications: As of January 1, 2025, ADDED licenses will no longer be valid for operating within Al Reem Island. Businesses failing to obtain an ADGM license by this deadline risk facing legal repercussions.
  • New Business Registration: For businesses established on Al Reem Island after November 1, 2023, registration and licensing will solely be handled by ADGM, not ADDED.

Conclusion

The ADGM commercial license fee waiver program offers a compelling incentive for established non-financial and retail businesses on Al Reem Island. This targeted initiative effectively reduces the financial burden associated with transitioning to the ADGM free zone, streamlining the process for businesses. By capitalizing on this program before the October 31st, 2024 deadline, businesses can optimize their costs and leverage the numerous advantages of operating under ADGM’s robust legal and regulatory framework.

ADGM’s Expanding Horizons: HLB Abu Dhabi Guides Your Way

HLB Abu Dhabi by your side! As the ADGM expands, we offer expert guidance for businesses of all sizes.

  • Seamless Navigation: Whether you’re setting up shop for the first time, relocating from Al Reem Island, or ensuring legal compliance, our team empowers you to navigate the ADGM landscape with ease.
  • Beyond ADGM: Our expertise extends beyond the free zone, including ADNOC compliance, auditing, corporate tax assistance, and more.
  • Unlock Your Potential: Don’t miss out on the exciting opportunities presented by ADGM’s growth. Contact us today to discuss your specific needs and leverage our comprehensive support.

Contact our experts at abudhabi@hlbhamt.com or +971 50 329 8806 to schedule a consultation.