Abu Dhabi will soon be among the world's largest International Financial Districts. The UAE Cabinet has issued a resolution expanding the jurisdiction of the Abu Dhabi Global Market (ADGM), the international financial centre of the capital city of the United Arab Emirates. This expansion is part of Abu Dhabi's economic vision. It thus highlights its thriving financial sector as one of the key focus areas for its diversification strategy. The addition of Al Reem Island will also make the ADGM financial district ten times larger than its current size.
ADGM EXPANSION
The UAE Cabinet passed a resolution that extends ADGM's jurisdiction as a Financial Free Zone to Al Reem Island. This is next to its current location on Al Maryah Island.
The expansion is due to increased demand from many international companies. These are companies that prefer Abu Dhabi as a place to grow their businesses globally. By operating within the financial free zone's jurisdiction, a qualifying business entity can enjoy a preferential corporate tax rate of 0% on their qualifying income.
AL REEM ISLAND OPPORTUNITIES
Al Maryah Island is doing well as an international financial center with more than 95% occupancy and lots of international companies looking to expand or set up their business there. ADGM prioritises accommodating this increasing demand. Al Reem Island provides many opportunities with access to various office spaces, as well as high-quality residential, educational, medical, and lifestyle facilities. With both islands together, ADGM will become one of the most attractive places to work and live among financial centers globally.
ABU DHABI'S POSITIONING
Today, Abu Dhabi is soaring as the key economy of the region and garnering attention as the 'capital of capital,' home to the largest sovereign wealth funds with trillions of dollars in AUM and a wide network of venture capital and family offices. The expansion of ADGM's jurisdiction stands as a testament to it being the fastest-growing IFC in the region, besides its recently published achievements of 2022.
ACHIEVEMENTS OF ADGM
In only eight years, ADGM has grown to support 1,400 operating entities, 5,500 business licences, and a workforce of 11,000 people in ADGM Square. Last year, ADGM achieved a record increase of 56% in Assets Under Management and a 30% increase in active licences.
FINAL THOUGHTS
ADGM is working with government stakeholders and local authorities. They are doing so to complete transitional arrangements for all entities currently operating on Al Reem Island, including those in the financial services industry. ADGM will contact the Al Reem Island community with the transition process soon.
The expansion presents a chance for Abu Dhabi to strengthen its position as a world-leading international financial center and global destination. Combining common law jurisdiction and a pioneering regulatory framework across the two islands will create even more economic opportunities. So, Abu Dhabi is eager to work with its partners and stakeholders to achieve this ambition.
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