Today's Edition
KHALED AL KHAWALDEH (ABU DHABI)
Since its inception eight years ago, Abu Dhabi Global Market (ADGM) has rapidly emerged as a leading international financial centre.
Built on a robust legal framework based on the direct implementation of English Common Law and progressive regulations, the special economic zone in the heart of the capital has seen its prominence grow, with 211 percent increase in Assets Under Management (AUM) in the first quarter of 2024 alone.
Since a government directive last year, the special economic zone has seen its geography grow too, with the incorporation of nearby Al Reem Island into the global market umbrella.
This has been largely ushered in by a surge in demand from companies moving to open new bases at ADGM, which has seen occupancy rates exceed 95 percent.
Officials say the incorporation of the commercial and business zones of Reem Island will allow this success to continue.
CEO of ADGM Registration Authority, Hamad Sayah Al Mazrouei, told Aletihad, "ADGM has recognised the intrinsic potential of Abu Dhabi by strategically aligning its initiatives to position the UAE's capital as a premier destination of choice for international firms. These strategies and initiatives led to a surge in demand from companies and businesses seeking to establish a presence in Abu Dhabi, resulting in the occupancy rate surpassing the 95% mark in 2022."
"Recognising the need for expanded physical space, ADGM prioritised the growth of its infrastructure to accommodate the increasing demand adding Al Maryah Tower to its existing four towers on Al Maryah Island. Subsequently, in April 2023, the UAE government spearheaded ADGM's expansion by issuing the UAE Cabinet Resolution No. 41 for 2023. This resolution amended the geographic area of ADGM to include Al Reem Island alongside ADGM's existing territory expanding ADGM's jurisdiction ten-fold, now encompassing 14.38 million sq.m., positioning ADGM as one of the largest financial districts globally."
Al Mazrouei says the expansion of ADGM to include Al Reem Island represents a strategic move to enhance Abu Dhabi's financial ecosystem and its continued growth as a destination of choice for global finance.
The centre has already hosted 107 asset managers overseeing 137 funds and hosts several high-profile firms including Morgan Stanley and Barrenjoey which have recently received their full licensing.
Moving forward, the centre hopes to become a global centre for digital assets through the formulation of a robust and progressive regulatory framework.
Passed in 2023, ADGM's Distributed Ledger Technology (DLT) Foundations legislation became one of the first to take on the complicated challenges associated with regulating digital assets.
The recently implemented structure is specifically designed to provide a comprehensive framework for both DLT Foundations and Decentralised Autonomous Organisations (DAOs), facilitating their operations and token issuances while acknowledging the distinctive requirements of the Blockchain industry.
"Our primary objective is to enhance ADGM's local and cross-border engagements through strategic partnerships, providing entities and entrepreneurs with a dynamic, innovative, business-friendly and globally connected ecosystem," Hamad said.
"The Registration Authorities dedication to a proactive approach, founded on extensive cross-industry dialogue and collaboration with diverse stakeholders, positions our innovative regulations at the forefront of realising this vision. By shaping the landscape of blockchain and Web3 technologies, we are progressing towards a future characterised by establishing global standards, fostering enhanced transparency and maximising operational efficiency."
Registration and Regulation
As the head of the Registration Authority, Hamad has overseen the tumultuous task of integrating Reem Island's extensive business and commercial venues into the ADGM framework.
Under the 2023 Decree, practitioners on Al Reem Island are required obtain a licence with ADGM, a task that Hamad says his team at the RA have worked tirelessly to overcome.
"Integrating Al Reem Island's business and commercial sector into ADGM's jurisdiction poses a challenge that ADGM is actively addressing by facilitating a seamless and efficient transition for Al Reem Island businesses into ADGM. To tackle this challenge, ADGM has implemented flexible measures and established reasonable deadlines, working closely with key government stakeholders, mainland regulators, and other local authorities," Hamad said.
As part of the transition, ADGM has granted existing companies and businesses on Al Reem Island provisional exemptions from complying with ADGM's registration and licensing requirements, as well as specific regulations, until December 31, 2024, giving them ample time to transition to the new requirements.
Furthermore, ADGM has recently introduced an incentive initiative aimed at eligible businesses on Reem Island, exempting them from any fees associated with obtaining an ADGM commercial licence until October 31, 2024.
"ADGM has initiated the process of addressing inquiries regarding the impact and outcomes of its jurisdiction expansion, with all regulatory, administrative, and logistical transitional arrangements established and awaiting execution," he said.
