ADGM cuts fees for non-financial and retail licences from 2025

Abu Dhabi Global Market (ADGM), the international financial free zone in the UAE capital, is to reduce commercial licence fees for non-financial and retail licences by 50% or more to ensure a smooth and transparent transition for the expansion of the free zone beyond Al Maryah Island to Al Reem Island.

The inclusion of Al Reem Island makes for a tenfold expansion of the ADGM free zone’s geographic footprint to over 14 million square metres. The move was announced last year in response to heightened demand from a wide range of international companies choosing Abu Dhabi as their preferred destination for global business expansion.

From 1 November 2023, new businesses planning to establish their presence on Al Reem Island were required to apply for a commercial licence from ADGM Free Zone rather than the Abu Dhabi Department of Economic Development (ADDED).

ADDED licences will not be valid for operation in ADGM beyond 31 December 2024, so Mainland companies operating in Al Reem Island are required either to convert their business licence to ADGM or relocate their office to another Mainland area.

The revised fee structure, which will come into effect on 1 January 2025, will see new registrations within the non-financial category halved from USD10,000 to USD5,000, with annual licence renewal fees also reduced from USD8,000 to USD5,000. The registration fee for the retail category has been cut by more than 66% from USD6,000 to USD2,000, with renewals also halved from USD4,000 to USD2,000.

These reductions in the non-financial and retail sectors, however, are accompanied by increases for the financial and tech sectors.

In the financial category, ADGM registration fees are set to rise from USD15,000 to USD20,000, with renewals also rising from USD13,000 to USD15,000. Registration and licence renewal fees for technology and FinTech start-ups are to increase from USD1,000 to USD1,500, while registration and licence renewal fees in the special purpose vehicle category are to remain unchanged at USD1,900.

“These changes are designed to optimise the business environment for newer sectors while keeping ADGM as a top tier financial centre,” said ADGM Registration Authority CEO Hamad Sayah Al Mazrouei. “By reducing barriers for non-financial and retail sectors ADGM aims to diversify its ecosystem and bring more businesses to the jurisdiction. This is a strategic move to support long term growth and innovation across industries.”

Established in 2015, ADGM has recorded rapid growth as the UAE capital boosts its non-oil economy and focuses on attracting more international companies and investors. The ADGM registered 231 financial services companies in the first half of 2024, up 31%. Assets under management also increased by 226% in the six-month period compared to on the same period last year, with 112 fund and asset managers overseeing 141 funds by the end of June.

ADGM also issued 1,271 new licences in the first half of the year, up 20.5% on an annual basis, to reach 2,088 at the end of June.

With the deadline for current transitional fee exemptions for Al Reem Island businesses ending on 31 October 2024, businesses need to plan ahead to benefit from these changes. Using a Public Relations Officer (PRO) can be key during this transition.

Delays or misunderstandings in adapting to these changes can be costly and a PRO can handle all documentation requirements and communication with ADGM’s Registration Authority to ensure businesses are compliant with the new regulations and able to take advantage of the new fee structure without disruption.

“These fee updates are in line with reductions recently being observed regionally in Saudi Arabia and Qatar in attempts to encourage new licensed businesses,” said Sovereign Senior Sales Manager in Abu Dhabi Jade Wong. “The reduction in ADGM licence fees can only bolster the attractiveness of the UAE capital city’s financial centre for establishing businesses of various types.”

For further information on establishing a business in the ADGM or to seek assistance with the transitional fee structure, please contact Jade Wong by email below.