Abu Dhabi Global Market (ADGM) is considered one of the largest financial districts in the world, after issuance of the UAE Cabinet Resolution No. 41 of 2023 that stipulates the expansion the International Financial Centre of Abu Dhabi into Al Reem Island alongside its previous existence on Al Maryah Island, covering a total area of 14.38 million square meters. This expansion will enhance ADGM’s role in driving continuous change, and improving its business environment that contributes to Abu Dhabi’s strategic goal of economic diversification.

Frequently Asked Questions

If you are planning to establish your company in ADGM, you might have questions regarding the latest expansion in Al Reem Island.  At CorpLex, we created a list of Frequently Asked Questions (FAQs) that will provide more detailed information about Al Reem Island Expansion.

Expansion into Al Reem Island

What is the expansion of ADGM to Al Reem Island?

ADGM, since it was established in 2013, has been operating within the borders of Al Maryah Island in Abu Dhabi. In 2023, the Cabinet Resolution No. (41) of 2023 was issued and it expanded the jurisdiction of ADGM to Al Reem island which is located 600 meters off the northeastern coast of Abu Dhabi Island. ADGM Board has given all business at Al Reem Island a transitional period until December 2024, to make sure they meet all requirements for ADGM’s legal framework.

Which businesses located on Al Reem Island will be governed by ADGM regulations?

All businesses on Al Reem island are governed by ADGM regulations.

What will the businesses in Al Reem Island benefit from this expansion?

ADGM offers a variety of benefits for businesses within its jurisdiction, including:

• An internationally recognized application of English Common Law Regulations.
• Providing several services such as license registration, immigration services and business support and services.
• Access to business events that are hosted by ADGM such as Abu Dhabi Finance Week.
• Financial Sustainability.
• Developed regulations that evolve alongside changes and advancements.
• Digital registration.
• Access to leading law firms and advisors, digital companies, global funds, family offices, asset managers, etc.

What are some legal differences between ADGM and the rest of Abu Dhabi?

ADGM has its own regulations based on English common laws that are different from the rest of the Emirate. Additionally, it has its own courts which are the ADGM Courts that are regulated by ADGM Courts Regulations.

License and Registration

Are there any effects of the expansion on the Trade License?

Businesses in Al Reem Island can still operate and continue their business as before, only they need to register a company and obtain a license from ADGM authority before the end of 31 December 2024.

How does this expansion affect my residential tenancy in Al Reem Island?

The registration and processing of the residential tenancies will not be affected by the expansion and will remain the same until further notice.

Do companies in Al Reem Island have the choice to not comply with the ADGM regulatory framework?

No, complying with ADGM’s framework is mandatory to all the companies that exist in Al Reem Island. Companies must obtain an ADGM license, either by replacing their current license or obtaining a new one.

Can an ADGM company obtain a dual commercial license?

New and existing ADGM registered companies can apply for an onshore license through Abu Dhabi Department of Economic Development (DED) with the same physical office inside ADGM. (some businesses may be required to obtain permits from other authorities depending on the activity)

Can the company maintain the same license Number?

No, ADGM follows a different licensing regime than mainland, so it needs to be changed to a new ADGM license with a new number.

Can an ADGM entity conduct business outside of ADGM jurisdiction (outside of Al Maryah Island and Al Reem Island)?

No, the ADGM license only allows the company to conduct activities within ADGM, and if the company wishes to conduct activities outside of ADGM, the company needs to obtain a separate license from Abu Dhabi Department of Economic Development (ADDED).

Employment contracts and Employees

What will happen to the employees whose visas are registered under ADDED license when it is converted to ADGM license?

All visas of the employees who are registered under ADDED licenses will remain valid until its expiry date without any additional cost, after the visa expires the renewed visas should be under ADGM Authority.

Will the employment contracts be affected by the expansion?

Yes, all labor contracts should align with ADGM Employment Regulations. (There is a labor contract template for ADGM)

Do former employees under the ADDED license need to receive their end-of-service gratuity before transitioning to new ADGM contracts?

Before transitioning the employment contracts to ADGM, the Ministry of Human Resources and Emiratisation (MoHRE) will request the company to provide an undertaking letter confirming mutual agreement between the business and employees regarding the recognition of end-of-service entitlements.

Can a non-ADGM employee be seconded or outsourced to an ADGM registered business?

Yes, but if the duration exceeds 30 days, the individual must obtain a temporary work permit under the ADGM Employment Regulations Engaging Non-Employees Rules 2023.

Real Property

Are companies allowed to obtain multiple licenses using the same office address?

ADGM allows for multiple commercial licenses at a single office address under specific conditions:

• The landlord must provide a No Objection Certificate (NoC) allowing sub-leasing.
• Sub-lease agreements must be signed between the lessee and the sub-lessee entity.

Financial entities must also obtain approval from the Financial Services Regulatory Authority (FSRA) of ADGM in addition to the above requirements

Are companies allowed to have several offices for one license?

 No, ADGM does not allow several offices under one license.

Dispute Resolution

Over which matters does ADGM Courts have exclusive jurisdiction?

According to Articles 13 (7) and (8) of Abu Dhabi Law No. 12 of 2020, ADGM has exclusive jurisdiction over:

• Civil or commercial claims and disputes involving ADGM, an ADGM authority or an ADGM licensed entity.
• Civil or commercial claims and disputes arising out of:
  • a contract entered into, executed or performed in whole or in part in ADGM;
  • a transaction entered into or performed in whole or in part in ADGM; or
  • an incident that occurred in whole or in part in ADGM.

How is the ADGM Courts affected by the expansion in Al Reem Island?

This expansion means that ADGM Courts have exclusive jurisdiction to decide on matters not only in Al Maryah Island but also in Al Reem Island.

Are parties allowed to choose arbitration or another court to resolve their claims or disputes?

Yes, parties are permitted to opt for arbitration or to submit their civil or commercial claims and disputes to the jurisdiction of a court other than ADGM Courts.

If the contract states (Courts of Abu Dhabi), does it also include ADGM Courts?

Yes, the phrase “Courts of Abu Dhabi” includes the Courts of ADGM.

Where do employees on Al Reem Island file claims against their employers?

It is depending on the employment contract: if it is previously registered with MoHRE and still is not expired, then the Federal Decree Law No. 33 of 2021 will apply which requires any individual employment dispute to be submitted to MoHRE, following which Abu Dhabi Courts. But if the contract is not registered with MoHRE, or lacks a jurisdiction clause, the ADGM courts will have jurisdiction to resolve the dispute.

Where should tenants in Al Reem Island file a claim against the landlords?

Depending on the terms of the tenancy contract: if it is registered with the Department of Municipalities and Transport (DMT), any tenancy claim should be directed to the Rental Dispute Settlement Committee in Abu Dhabi. However, if the contract is not registered with DMT or lacks a jurisdiction clause, ADGM will have exclusive jurisdiction over the dispute or claim.

What is ADGM Courts Pro Bono Scheme?

It is a free-of-charge scheme that provides legal assistance to individuals who have limited financial means, that helps them to understand their rights and obligations regarding any legal issue that falls within the jurisdiction of ADGM Courts.

Where does filing a claim with ADGM Courts take place?

All claims must be submitted digitally through ADGM eCourts Platform, it is free of charge and also has a user guide.

Is there any way to resolve disputes without filing a claim?

ADGM Courts provide mediation services, it is a no-cost internationally accredited mediator that is provided to the parties to resolve their disputes.