Establishing and operating a business in Al Reem Island involves navigating through various categories and licensing requirements. As the transition to ADGM is ongoing, knowing your business category and the pre-application steps is crucial. Simplifying this process ensures compliance and sets the stage for smooth growth and success in the vibrant Al Reem Island business scene. Plus, it paves the way for an easy license conversion process before the deadline, ensuring a seamless transition to ADGM.
The Activities are classified into 3 categories by the ADGM authorities:
- FINANCIAL – CATEGORY A
- NON-FINANCIAL – CATEGORY B
- RETAIL – CATEGORY C
i)Category A: Financial Businesses
Financial businesses fall under Category A and are required to obtain an Investment Promotion Approval (IPA) from the Financial Services Regulatory Authority (FSRA) of ADGM before proceeding with the commercial license registration. The FSRA oversees financial activities and ensures compliance with regulatory standards. For more information and contact details, applicants can refer to the FSRA’s official resources and rulebook.
ii)Category B: Non-Financial Businesses
Non-financial businesses, categorized under Category B, contain a range of activities subject to additional regulations and license conditions, particularly Controlled Activities. One sub-category within this group is the Designated Non-Financial Businesses and Professions (DNFBPs), which includes:
- Real estate agencies
- Dealers in precious metals or stones
- High-value item dealers
- Accounting, audit, insolvency, or taxation consulting firms
- Law firms, Notary firms
- Company Service Providers (CSPs)
Each sub-category from (a to f) has specific requirements and may require the appointment of a Money Laundering Reporting Officer (MLRO) and adherence to Anti-Money Laundering (AML) rules.
Additional Criteria for DNFBPs Under Sub-Categories (d to f)
- Audit firms:
They need to comply with the ADGM audit regime.
- Law firms:
- Be a registered company or a branch/subsidiary of an existing legal entity.
- Operate for at least 8 years.
- Maintain at least two offices, either in different jurisdictions or within the same country.
- Each managing partner must have a minimum of 10 years of post-qualification experience.
- Employ at least 8 partners and 25 qualified legal professionals.
- Possess professional indemnity insurance covering activities in Al Reem Island upon registration.
- CSPs:
Although currently under moratorium until June 30, 2024, CSPs facilitate business incorporation and serve as the main contact for ADGM. Eligible entities may explore the dual licensing regime, enabling them to operate in mainland Abu Dhabi without physical office presence, subject to regulatory requirements.
iii)Category C: Retail Businesses
Retail businesses fall under Category C and operate in the retail sector. These businesses may need to adhere to general commercial licensing regulations and any specific requirements for retail operations in Al Reem Island.
Dual Licensing
Additionally, Al Reem Island businesses have the opportunity for dual licensing, allowing eligible entities holding ADGM commercial licenses to operate in mainland Abu Dhabi without needing a physical presence on the mainland. This arrangement aims to promote business activity between ADGM and mainland Abu Dhabi, enhancing competitiveness in the region.
However, it’s essential to ensure compliance with both ADGM regulations and those imposed by mainland authorities, such as the UAE Central Bank or Securities and Commodities Authority. Depending on your business activities, you may need further licenses from onshore authorities.