Federal Decree-Law No. (41) of 2024 Regarding the Issuance of the Personal Status Law
January 23, 2025
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ME-ALLIANCE BUSINESS INSIGHT
ADGM Expansion to Al Reem Island
Expansion Overview
UAE Cabinet Resolution No. 41 of 2023 has expanded ADGM’s jurisdiction to include Al Reem Island, in addition to its existing presence on Al Maryah Island.
The total area under ADGM’s jurisdiction now spans 14.38 million square meters. This expansion aligns with Abu Dhabi’s economic diversification strategy and strengthens ADGM’s position as a global financial hub.
Businesses located on Al Reem Island must transition to the ADGM legal framework and complete their registration by December 31, 2024.
► Regulatory Framework
• ADGM operates under English Common Law, distinct from the rest of Abu Dhabi, offering businesses a familiar and internationally recognized legal system.
• This legal environment is attractive for companies seeking stability, predictability, and alignment with global business practices.
• ADGM has its own court system, known as ADGM Courts, which handles civil, commercial, and employment disputes within ADGM’s jurisdiction. These courts operate based on ADGM-specific regulations.
► Licensing and Business Registration
• All businesses operating on Al Reem Island must obtain an ADGM license by the deadline of December 31, 2024. This includes new businesses as well as existing companies that were previously registered with ADDED or another licensing authority.
• Companies will need to obtain a new license number from ADGM, as the licensing regime in ADGM is separate from the mainland.
• Dual licensing: Companies registered in ADGM can also apply for an additional onshore license with the Abu Dhabi Department of Economic Development (DED) if they plan to operate outside ADGM’s jurisdiction. Certain activities may require additional permits from other local authorities.
► Benefits of Operating in ADGM
• Internationally recognized legal framework: ADGM’s English Common Law-based regulations provide businesses with a secure legal environment that is familiar to international investors.
• Business services: ADGM offers a range of services, including business registration, immigration services, and corporate governance support to assist companies in establishing and running their operations efficiently.
• Businesses within ADGM also benefit from exposure to key industry events like Abu Dhabi Finance Week, which attracts global financial leaders.
• Sustainable financial system: ADGM’s regulatory framework evolves to meet the needs of a dynamic and rapidly changing business environment.
• Digital registration: The process of registering a business in ADGM is streamlined through digital services, making it easier for companies to set up operations.
• Access to a strong network of legal firms, financial institutions, global funds, family offices, and asset managers, enhancing opportunities for business development.
► Employment and Employee Matters
• Businesses transitioning to ADGM must align their employment contracts with ADGM Employment Regulations, which are different from those enforced by MoHRE (Ministry of Human Resources and Emiratisation) or ADDED (Abu Dhabi Department of Economic Development) in mainland Abu Dhabi.
• ADGM provides a standardized labor contract template to ensure consistency and compliance with its regulations.
• For employees whose visas are currently registered under ADDED, these visas will remain valid until their expiry date. When visas are renewed, they must be transferred to the ADGM Authority.
• Companies transitioning from ADDED to ADGM will need to ensure that end-of-service benefits are accounted for, and both employers and employees must sign an undertaking confirming the treatment of these entitlements before transitioning to new ADGM contracts.
► Real Estate and Office Arrangements
• In general, ADGM does not permit multiple office locations for a single license. Each office must be tied to a separate license, and businesses cannot operate in multiple offices under a single ADGM license.
• But, ADGM allows businesses to register multiple commercial licenses at a single office address, only under specific conditions. For instance, the landlord must provide a No Objection Certificate (NoC) allowing sub-leasing, and a formal sub-lease agreement must be signed between the lessee and the sub-lease.
• For financial entities, additional approval from ADGM’s Financial Services Regulatory Authority (FSRA) is required before sub-leasing can take place.
► Dispute Resolution and Jurisdiction
ADGM Courts have exclusive jurisdiction over disputes involving ADGM-licensed entities, including:
• Civil or commercial claims involving ADGM, its authorities, or ADGM-licensed entities.
• Disputes arising from contracts, transactions, or incidents that occurred within ADGM or were performed within ADGM’s jurisdiction.
• With the expansion to Al Reem Island, ADGM Courts now handle disputes that arise within both Al Maryah Island and Al Reem Island.
• Arbitration: Parties involved in a dispute can agree to resolve matters through arbitration, but if no agreement is made, ADGM Courts will have exclusive jurisdiction.
• Pro Bono Scheme: ADGM Courts offer a free legal assistance program for individuals with limited financial means, helping them understand their legal rights and navigate disputes under ADGM’s jurisdiction.
► Filing Claims and Mediation
• Claims must be filed digitally through ADGM’s eCourts platform, which is available at no cost. The platform also includes a user guide to assist businesses and individuals in submitting claims.
• Mediation services are available through ADGM Courts at no cost. The mediation process is conducted by internationally accredited mediators and serves as a cost-effective alternative to formal litigation.
► Tenancy Disputes
• For tenancy-related disputes on Al Reem Island, claims should be filed with the Rental Dispute Settlement Committee if the tenancy agreement is registered with the Department of Municipalities and Transport (DMT).
• If the tenancy contract is not registered with DMT or lacks a jurisdiction clause, ADGM Courts will have exclusive jurisdiction over the dispute.
Legal Assistance from Middle East Alliance Legal Consultancy
As ADGM continues to expand, Middle East Alliance Legal Consultancy is ready to assist businesses in navigating the legal and regulatory landscape within ADGM, particularly about dispute resolution, licensing, and employment matters. If your business needs support in ADGM Courts, whether for litigation, arbitration, or compliance with ADGM’s legal framework, our team of experienced professionals can guide you through the process.
For more information or legal assistance, don’t hesitate to contact us. We offer tailored advice and expert legal services to ensure that your business operates smoothly within ADGM’s expanding jurisdiction.
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