When a foreign company is making the decision to expand its business into the UAE, one of the first decisions you will need to make is whether to establish a branch of a foreign company or to incorporate a subsidiary Limited Liability Company (LLC) in Dubai, Abu Dhabi or one of the UAE’s free zones.

Both structures will enable your company to trade from the UAE, but there are some distinct differences to consider in respect of regulations, tax, compliance and strategic business planning. Either option has its own benefits and considerations, and the right choice will depend on your specific business needs and goals.

However your choice between a branch or a subsidiary can have a significant impact on your risk, tax profile and how your group does business in the UAE. One of the questions we are often asked by multinational groups is: “Can we convert our foreign branch into a Limited Liability Company (LLC)?”

The short answer is yes, but it’s not always straightforward.

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The global economic landscape has shifted eastward in recent years as the growing partnership between the Gulf Cooperation Council (GCC) and dynamic Asian economies gains momentum. What started as a straightforward exchange of oil for labour has been transformed into a complex web of collaboration spanning construction, renewables, finance, tourism and technology.

This is reflected in the growth of trade between the two regions. In 2022, GCC trade with Emerging Asia surged to USD516 billion and is projected to reach over USD750 billion by 2030, almost twice the figure in 2021, according to research by London-based think tank Asia House.

Notably, this eastward shift is outstripping the GCC’s trade with traditional Western partners. Trade with the US, UK and EU also grew over the same period, but at a more modest 32%, and Emerging Asia is set to become the GCC’s primary trading partner by 2026. This article looks at what’s changing, and why it matters.

Shifting trade patterns

China is a key driver. GCC-China trade has risen by around 50% over the last decade and now almost matches the GCC’s combined trade with the US, UK, and Western Europe. Saudi Arabia and the UAE’s accession into the Brazil, Russia, India, China and South Africa (BRICS) bloc in 2024 will place them closer to Chinese decision-making.

The GCC’s bilateral ties with other Asian nations are also strengthening. Assisted by the UAE-India Comprehensive Economic Partnership Agreement (CEPA), non-oil trade reached AED240 billion last year, showing what’s possible when shifts in trade policy, private capital and regional logistics align.

The UAE’s drive to broker CEPAs with ASEAN’s main powers could boost trade further. Hong Kong has further sought to deepen ties with the Gulf, becoming an increasingly important link for capital flows and business between the Gulf and Asia.

Trade between the GCC and Asia is becoming more diversified, more sector-driven and more strategically aligned. Under CEPA, the UAE and India have removed tariffs on key goods and streamlined customs procedures. Since implementation, UAE non-oil exports to India have grown by more than 75%, with significant gains in jewellery, food, machinery and electronics.

The same pattern is playing out elsewhere. Gulf states are reducing reliance on hydrocarbons, while Asian partners are building out new import sources and production networks. Agreements like CEPA are part of that, but so is long-term policy direction. India’s ‘Look West’ initiative and the UAE’s ‘We the UAE 2031’ vision both prioritise trade expansion beyond traditional sectors.

Strategic capital and cross-investment

Capital is moving both ways and it is doing so with more purpose. GCC sovereign wealth funds are no longer just passive investors in global assets. They are shaping long-term positions in Asian infrastructure, logistics and technology, often through joint ventures.

Mubadala Capital, a unit of the USD330 billion Abu Dhabi wealth fund ADQ, signed a memorandum of understanding for a partnership aimed at co-investments and other opportunities with Seviora, a subsidiary of Singapore state investment firm Temasek. Mubadala and another Singapore state investment firm GIC are also part of a USD7.3 billion deal to acquire German energy efficiency provider Techem, along with Switzerland’s Partners Group and TPG Rise Climate, the climate investing platform of US global alternative asset management firm TPG.

At the same time, Asian investors are looking outward. Banks, family offices and corporates from India, Singapore and South Korea are growing their presence in Gulf markets, whether through new funds, regional offices or joint developments.

The change is also institutional. Bilateral platforms and government-backed funds are now being set up not only to deploy capital, but to support shared strategic goals. Many are focused on sectors tied to long-term resilience, including supply chains, health, clean energy and agritech. The investments are structured to support long-term positioning in areas that matter to both sides.

New growth sectors reshaping trade

Trade is expanding well beyond traditional hydrocarbons, with new momentum in sectors tied to consumer demand, supply chain security and capital diversification. Gold is one of the standout examples. Under CEPA, gold jewellery exports from the UAE to India have more than doubled, driven by reduced tariffs and a more streamlined route through Dubai. That shift is also influencing logistics patterns, with more trade now routed through the Gulf’s customs hubs rather than older indirect corridors.

Food and pharma are also gaining ground, supported by investment in regional processing and cold chain infrastructure. Several Gulf-based conglomerates have moved into packaged foods and health products, often in partnership with Asian manufacturers and distributors.

Real estate and digital infrastructure are seeing a similar trend, especially in markets like Singapore, Vietnam and southern India, where Gulf investors are teaming up with local developers or tech funds. The model is evolving from export-only to embedded capital, with each deal reinforcing a more stable, sector-specific commercial relationship.

Talent, migration and regulatory bridges

Along with goods and capital, people and policy are also part of the flow between the two regions. More than 150,000 Golden Visas have now been issued in the UAE, with many going to professionals and entrepreneurs from India, Singapore and Southeast Asia that are looking to build regional bases. Many are choosing structures in Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), the international financial centres that offer familiar legal systems and easier access to international clients.

Indian and Singaporean firms are among the most active, with cross-licensing options and dual-qualified advisers helping ease market entry. In many cases, teams are splitting operations across Asia and the Gulf, sharing staff, resources and regulatory approvals.

The recent trade agreements have added momentum, with provisions for professional mobility, dispute resolution and financial cooperation helping to remove friction and make it easier for firms to scale across borders.

What this means for business

The landscape is broadening. Gulf–Asia ties now cut across sectors, investment models and regulatory systems. Trade is deeper, capital is more strategic, and mobility is reshaping how businesses operate across borders.

For firms active in the region, older assumptions may no longer hold. Energy remains key but is no longer the sole focus. New opportunities are forming in sectors once seen as peripheral.

Trade and capital flows are being reshaped by policy, sector dynamics and long-term planning. The businesses that adapt early are likely to be best placed to navigate what comes next.

Explore opportunities in the GCC–Asia corridor

Sovereign PPG supports businesses, investors and family offices navigating cross-border expansion, structuring and regulatory compliance across the Gulf and in key Asian markets. Whether you are assessing new partnerships, setting up operations or managing cross-jurisdictional assets, our team offers practical, on-the-ground support.

To speak with Sovereign PPG, call +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi.
You can also email to sovppg@SovereignGroup.com or use the contact form below.

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The European Parliament approved, on 9 July, a proposal by the European Commission to remove both Gibraltar and the United Arab Emirates (UAE) from its list of high‑risk jurisdictions regarded as having strategic deficiencies in their national anti‑money laundering and countering the financing of terrorism (AML/CFT) regimes.

EU entities covered by the AML framework are required to apply enhanced vigilance in transactions involving listed countries. In addition to the reputational damage, a listing adds costs to transactions involving people or entities from listed countries.

The EU listing process shadows the work of the Financial Action Task Force (FATF), the international anti-money laundering watchdog, in particular its ‘grey list’ of jurisdictions subject to increased monitoring. The Commission is mandated to update the high‑risk list regularly, but its proposals require the assent of both the European Parliament and individual member states.

This is not the Commission’s first attempt to delist Gibraltar and the UAE. It proposed doing so in March 2024 after both jurisdictions had been delisted by the FATF, but the proposal was vetoed by the European Parliament. This meant that the EU high-risk list was out of line with the FATF grey list for over 18 months, causing confusion and legal uncertainty for entities that must apply anti-money laundering rules.

“EU operators have to comply with divergent lists which increase their compliance burden, adds additional costs and impacts their global competitiveness,” EU Commissioner for Financial Services Maria Luis Albuquerque told the Parliament. “The fact that countries listed by the FATF are still not listed by the EU exposes the EU’s financial system to vulnerabilities and can create loopholes that need to be addressed.”

Gibraltar was first identified by the FATF as a jurisdiction under increased monitoring in June 2022 and placed on the ‘grey list’, despite rating as ‘Compliant’ or ‘Largely Compliant’ with 39 of the 40 FATF Recommendations and rating as ‘Partially Compliant’ with only one.

The Gibraltar government made a high-level political commitment to work with the FATF and Moneyval, the permanent monitoring body of the Council of Europe, to further strengthen the effectiveness of its AML/CFT regime by May 2023. Its agreed FATF Action Plan consisted of only two recommended actions, the fewest of any previously grey-listed country or jurisdiction.

In October 2023, the FATF made the initial determination that Gibraltar had substantially completed its action plan and warranted an on-site assessment. Following this assessment, in February 2024 the FATF stated that Gibraltar had resolved its strategic deficiencies within the agreed timeframe and was no longer subject to increased monitoring. It was removed from the FATF grey list.

Sovereign Trust (Gibraltar) Head of Business Development Ejaz Niazi said this could be a game-changer. The 2024 FATF delisting confirmed that Gibraltar was in compliance with global AML standards, but the continued EU high‑risk listing meant that European financial institutions were still required to apply enhanced due diligence (EDD).

“Formal removal from the EU list of high‑risk jurisdictions will reduce the compliance costs and barriers for clients wishing to use Gibraltar and reassure global investors, banks and counterparties about Gibraltar’s regulatory integrity,” said Niazi.

“This will make it easier for Gibraltar-regulated firms to engage with EU banks, law firms and fund managers and for Sovereign offices around the world to confidently refer clients to Gibraltar structures with fewer compliance frictions. It strengthens Gibraltar’s case as a viable jurisdiction for wealth structuring, fund domiciliation and corporate services.”

The UAE was added to the grey list in March 2022 after it had made a high-level political commitment to work with the FATF and the Middle East & North Africa Financial Action Task Force (MENAFATF) to strengthen the effectiveness of its AML/CFT regime to address the deficiencies identified by the FATF in its 2020 Mutual Evaluation.

At its October 2023 plenary, the FATF made the initial determination that the UAE had substantially completed its Action Plan and therefore warranted an on-site assessment. Following this assessment, it concluded that the UAE had met the commitments in its Action Plan. It was removed from the FATF grey list in in February 2024.

The UAE government has continued to sustain implementation of AML/CFT reforms. Last August, it amended its AML/CFT laws by adding measures to assist with investigations, to impose sanctions in cases of non-compliance by financial institutions and to increase the number of prosecutions to combat money laundering.

Last September, it also set out a 2024-27 National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing, which has 11 goals focused on risk-based compliance, effectiveness and sustainability.

“The EU delisting is very good news for the UAE, which should be congratulated for taking strong and credible steps to ensure its removal,” said Simon Gordon, Managing Director of Sovereign Corporate Services Dubai.

“The UAE has continued to implement significant legislative and structural reforms in areas including financial crime compliance, whistleblowing and virtual assets regulation. It is reassuring that the government is continuing to prioritise AML/CTF governance in 2025, particularly in view of the next FATF assessment in 2026.”

The European Commission also removed Barbados, Jamaica, Panama, the Philippines, Senegal and Uganda from its list of high‑risk jurisdictions, while a further 10 third‑country jurisdictions were added to the list – Algeria, Angola, Côte d’Ivoire, Kenya, Laos, Lebanon, Monaco, Namibia, Nepal and Venezuela.

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Abu Dhabi Finance Week (ADFW) successfully concluded its third edition on 12 December 2024, writes Martin Zubeldia, Business Development Manager at Sovereign PPG in the UAE.

Hosted by Abu Dhabi Global Market (ADGM), with Abu Dhabi’s sovereign wealth investor ADQ acting as the headline partner, ADFW 2024 attracted over 20,000 leaders, experts and executives from across the global financial services industry.

The theme ‘Welcome to the Capital of Capital’ explored the various facets of capital, including economic, human, cultural, environmental and technological. The agenda featured over 600 speakers and 350 thematic sessions across more than 60 events and strategic forums. New additions included the UBS Investor Forum, the Islamic Finance Summit, the Spear’s Private Wealth Summit and the Abu Dhabi Capital Markets Showcase.

The event’s first day centred on Abu Dhabi’s ‘Falcon Economy’, which symbolises the UAE’s economic ascent supported by Abu Dhabi’s growth as a leading global business hub.

“In a world seeking stability and growth, Abu Dhabi’s Falcon Economy stands as an unwavering partner for businesses, investors, innovators, and visionaries alike, welcoming them to the ‘Capital of Capital’, said ADGM chairman Ahmed Jasim Al Zaabi, member of Abu Dhabi’s Executive Council.

“Here, every investment and every relationship are supported by our commitment to build a future defined by trust, resilience and boundless opportunity. As our jurisdiction expands and achieves new milestones, our community grows simultaneously.”

Within the ADFW umbrella were a number of different strategic forums, including:

• The second edition of the Abu Dhabi Economic Forum (ADEF) featured in-depth discussions on the current state and future prospects of the Falcon Economy, bringing together senior leadership from Abu Dhabi’s government, as well as prominent figures from the private sector, representing key industries.
• The third edition of Asset Abu Dhabi gathered asset allocators and asset managers, investment bankers, venture capitalists, private equities, family offices and other institutional investors, which collectively manage over USD42.5 trillion in assets, to share their perspectives and offer insights into some of the world’s biggest hedge funds.
• The seventh edition of Abu Dhabi Sustainable Finance Forum (ADSFF) with a focus on sustainable finance and climate action. Hosted by ADGM in collaboration with the Global Climate Finance Centre (GCFC), HSBC, and Smartenergy, the forum featured strategic discussions on advancing the UAE’s net-zero ambitions, global climate fund mobilisation, and the role of AI in addressing sustainability challenges.
• The third edition of RESOLVE, held under the theme ‘Resilience,’ brought together global leaders to share insights on how resilience drives success for both businesses and clients.
• The third edition of the Global Financial Regulators Summit, convening senior regulatory representatives from the MENA region, the European Union, the UK and Asia, which focused on the role of artificial intelligence (AI) in the financial services sector.
• The eighth edition of Fintech Abu Dhabi reaffirmed its status as the Middle East’s largest fintech festival. Focusing on payments, digital assets, digital security and credit, the ADGM also showcased a number of recent regulatory developments, including:
• A comprehensive framework for the issuance of Fiat-Referenced Tokens (FRTs) within ADGM, broadening the range of digital assets available in a regulated environment.
• The release of detailed guidance addressing IT Risk Management.
• A consultation paper on proposed updates to the Virtual Asset Framework.

ADFW 2024 witnessed the signing of over 44 Memorandums of Understanding (MoUs), which included notable agreements between ADGM and Istanbul Financial Centre, Beijing Financial Street Bureau, Polygon, PaloAlto Networks and Ma’an. ADGM Academy signed seven MoUs with leading entities such as Abu Dhabi Youth Business Council (ADYBC), Massachusetts Institute of Technology (MIT), Ray Dalio, Sandooq Al Watan, Standard Chartered, Visa and the Wealth Management Institute (WMI).

The success of ADFW 2024 further solidifies ADGM and Abu Dhabi’s position as a global financial powerhouse, attracting global investors and creating opportunities for collaboration that drive innovation. This achievement comes off the back of a remarkable year of growth for ADGM, which reported significant milestones across key performance indicators, including a 6.6% increase in Abu Dhabi’s non-oil GDP.

ADGM’s recent expansion into Al Reem Island enables it to accommodate more businesses and support the transition of businesses into its robust regulatory environment. ADGM introduced several incentives including fee exemptions for non-financial and retail sector entities until 31 December 2024 and substantial fee reductions starting 1 January 2025.

ADGM also announced the forthcoming establishment of the Insurance Association within its jurisdiction. This initiative represents a significant milestone in advancing the insurance and reinsurance sectors in ADGM and the UAE, aiming to create a unified platform to support industry growth and innovation.

ADGM’s international regulatory framework, based on English Common Law, continues to enhance its appeal as a secure and transparent jurisdiction for foreign investors. With reduced set-up fees and enhanced infrastructure, ADGM offers businesses the opportunity to establish themselves in one of the world’s most dynamic financial hubs in the most cost-effective way.

Building on this momentum, ADFW 2025 is set to take place from 8 to 11 December 2025, promising even greater opportunities for innovation and collaboration in the financial sector.

Sovereign PPG is a registered agent in ADGM and can assist with all set up matters by providing comprehensive support in legal structuring, licensing, compliance and more to help new businesses navigate the region’s unique regulatory landscape effectively.

If you need assistance with the set up in ADGM, restructuring, local partner, PRO support, or any other related service, please contact Jade Wong.

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The Qatari government signed Double Taxation Avoidance Agreements (DTAAs) with both the UAE and Saudi Arabia on 30 May, signalling a significant step in strengthening economic and trade relations between the three Gulf nations and promising to unlock a number of benefits for businesses and individuals operating in these countries.

Individuals and businesses operating in Qatar and the UAE or KSA will benefit from provisions aimed at avoiding double taxation on income earned across borders. This will promote investment and economic activity by providing certainty and clarity on tax liabilities.

The treaties also facilitate the exchange of tax-related information between Qatar and the UAE and KSA, enhancing transparency and compliance with tax regulations. This is intended to enhance efforts to combat tax evasion and ensures a level playing field for businesses operating in the region.

Both treaties further establish mechanisms for resolving tax disputes between contracting parties in a partner state, offering a framework for timely and efficient resolution of any disagreements. This provision will create a more stable and predictable tax environment for taxpayers and investors.

By reducing tax barriers and providing greater certainty in respect of tax liabilities, the treaties and intended to promote cross-border investment flows between Qatar and the UAE or the KSA. This fosters economic growth, job creation, and prosperity across the region.

The two DTAAs were signed on the side-lines of the 121st meeting of the GCC Financial and Economic Cooperation Committee in Doha and will enter into force following the exchange of ratification instruments between treaty partners.

“These new double taxation agreements are indicative of Qatar’s strong economy, which has recently ranked 4^th globally for economic performance, and the growing relationships for regional and international business.” – Nazar Musa, Head of KSA & Qatar at Sovereign Corporate Services

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The deadline for UAE companies employing 50 or more workers to meet their half-yearly Emiratisation target is 30 June. In-scope firms are required to have expanded their Emirati workforce by 1% before this date, said the Ministry of Human Resources and Emiratisation (MoHRE).

From 1 July, MoHRE will be verifying compliance. In-scope firms are required to increase the percentage of their Emirati workforce by 2% every year to reach at least 10% by 2026. This target is divided into two: 1% in the first six months of the year half of the year, and 1% in the second.

Firms that fail to meet the target by 30 June will have to pay a fine of up to AED48,000 (c. USD13,000) for every Emirati they have failed to hire. Calculated at AED8,000 per person per month, the penalties will accrue for every month a company is unable to fill up the required slots for UAE nationals. The monthly fine further increases by AED1,000 every year.

Early this year, MoHRE also started implementing the UAE Cabinet decision to expand the scope of Emiratisation to include firms with 20 to 49 employees. More than 12,000 companies operating across 14 specific economic sectors are now required to hire at least one Emirati in 2024 and another one in 2025.

MoHRE said that 1,379 private companies in the UAE had been penalised for violating Emiratisation rules between the introduction of the Emiratisation programme in mid-2022 and 16 May this year. They were found to have hired 2,170 UAE nationals illegally. The violators were fined AED20,000 to AED100,000 for each case.

The total number of Emirati employees in the private sector has grown at a rate of approximately 170% since September 2021, when the government launched the ‘Nafis’ programme, a federal initiative aimed at increasing the employability of Emiratis in the country’s private sector. More than 97,000 Emiratis have been employed in about 20,000 private companies.

“These workforce localisation initiatives across the GCC region are aimed at providing their citizens employment opportunities, ensuring the welfare of their nationals, and encouraging their citizens to engage with the economic landscape.” – Libbie Burtinshaw, Head of Operations at Sovereign Corporate Services

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The UAE Cabinet approved, on 16 May, a new, long-term, self-sponsored visa category called the ‘Blue’ residency visa. It allows foreign nationals who have made “exceptional contributions” to protecting the environment to reside and work in the United Arab Emirates for up to 10 years.

The Blue Visa aligns with the UAE government announcement that 2024 will be the Year of Sustainability in the country and follows numerous initiatives to introduce long-term residency visas in the country since 2019.

The Blue Visa will be granted to individuals championing sustainability and the use of modern technologies in promoting the circular economy, and other relevant fields.

Foreign nationals will be invited to submit their Blue Visa applications directly through the electronic portal of the Federal Authority for Identity, Citizenship, Customs and Port Security (ICP), or through nominations by competent authorities.

The new visa is the latest to be introduced in the UAE, following the Golden Visa, which was introduced in 2019 and offers a 10-year residency to investors, entrepreneurs, outstanding individuals, specialised talents and high-earning executives or working professionals.

In 2022, the UAE also introduced a five-year ‘Green Residence Visa’ aimed at attracting and retaining exceptional talents, skilled professionals, freelancers, investors and entrepreneurs worldwide.

“The blue residency visa aims to attract global environmental leaders to contribute to the UAE’s sustainable economic and social development,” said Dr Sultan Al Jaber, Cop28 President and Minister of Industry and Advanced Technology.

“It underscores the nation’s dedication to leveraging advanced technologies and artificial intelligence to create impactful solutions. With a forward-thinking approach, these solutions will address climate challenges and transform them into opportunities for a brighter future for humanity and our planet.”

Further details on the Blue Residency visa are expected to be available in the coming months.

“The addition of the new Blue visa, further expands the attractiveness of the UAE for skilled professionals who find themselves eligible for the long-term visa.” – Zana Jablan Musa, Operations Director at Sovereign Corporate Service

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The Abu Dhabi Global Market (ADGM), the international financial free zone located on Al Maryah Island in the heart of the UAE’s capital city, reported an extraordinary 211% increase in ADGM Assets under Management (AuM) during the first quarter of 2024 compared to the same period in 2023.

ADGM’s asset management sector started 2024 strongly, with a notable influx of global asset managers setting up operations in the international financial centre. By the end of March 2024, ADGM housed 107 fund and asset managers overseeing 137 funds.

“Abu Dhabi once again affirms its position as the leading financial powerhouse of the MEASA region … attracting talent, businesses, and quality investments from across the globe,” said ADGM chairman Ahmed Jasim Al Zaabi.

“This year holds the promise of even greater growth for ADGM and its ecosystem, marking a significant stride towards achieving Abu Dhabi’s economic goals and ambitions.”

The freezone’s unique position as the only jurisdiction in the region to apply English common law directly has significantly contributed to its attractiveness as a financial hub. By the end of March 2024, the total number of operational entities in ADGM had increased by 30% compared to the previous year, reaching 1,950, including 291 financial services entities.

At the end of 2023, ADGM reported that 88 financial institutions and two exchanges had received In-Principle Approvals (IPAs) and a further 125 firms were already in the pipeline to be registered in 2024.

In response to unprecedented demand from major global asset managers in the hedge fund, private equity and venture capital sectors, ADGM embarked on a trade mission to multiple countries during the first quarter of this year. It entered into more than 40 bilateral discussions with US asset management firms at the iConnections Global Alts 2024 event.

Expansion to Al Reem Island

ADGM expanded its jurisdiction last year from the existing Al Maryah Island to include Al Reem Island, making it one of the largest financial districts globally at 14.38 million square metres. ADGM recently unveiled a new incentive initiative to businesses based on Al Reem Island, operating in non-financial and retail sectors.

Eligible businesses on the island will be relieved from any fees associated with acquiring an ADGM commercial licence until 31 October 2024, allowing them to sustain their operations without additional financial obligations as they transition from an Abu Dhabi Department of Economic Development (ADDED) licence to an ADGM licence.

ADGM sustainable finance regulatory framework

ADGM’s Financial Services Regulatory Authority recently started implementing its sustainable finance regulatory framework, which encompasses rules on sustainability-orientated investment funds, managed portfolios and bonds as well as requirements for environmental, social and governance (ESG) disclosures by ADGM companies.

The measures are designed to accelerate the growth of a sustainable finance ecosystem in the jurisdiction and support the UAE’s transition to net zero greenhouse gas emissions.

The framework for green and climate transition funds and portfolios, green and sustainability-linked bonds and sukuks is a significant step in enabling capital to be channelled towards financing the transition to net zero.

In order to recognise products and services that are aiding the transition, ADGM will confer a designation on those that purport to meet its robust minimum standards. It will also permit ADGM’s ‘designation mark’ to be used in marketing materials and client communications.

A designation mark will provide investors with a level of confidence that those products and services purport to meet ADGM’s minimum standards, catalysing investors to channel capital towards the green transition.

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The Abu Dhabi Global Market (ADGM), the international financial free zone located on Al Maryah Island in the heart of the UAE’s capital city, reported a 32% year-on-year rise in the number of operational entities in 2023. The total increased from 1,378 to 1,825 over the year, underscoring its position as the region’s fastest-growing financial hub.

The ADGM reported a year-on-year increase of 35% in assets under management (AUM) to the end of December 2023, with the total number of asset managers operating in the ADGM financial free zone reaching 102 and the total number of funds reaching 141. This surge was facilitated by enhancements to the ADGM Financial Services Regulatory Authority’s (FSRA) regulatory framework, particularly the Private Credit Fund framework.

The end of 2023 numbers also reflected 88 financial institutions and two exchanges that had received In-Principle Approvals (IPAs) from ADGM. ADGM said a further 125 firms were already in the pipeline to be registered in 2024.

New international entrants in 2023 included some of biggest names in global finance: US investment bank Goldman Sachs, US alternative asset manager Blackstone, Jersey-based hedge fund manager Brevan Howard, Paris-based private equity investor Ardian, Paris-headquartered alternative asset manager Tikehau Capital, Mumbai-based investment bank SBI Capital Markets, Beijing-based Asian Infrastructure Investment Bank (AIIB), US alternative asset manager Apollo Global Management, US real estate venture capital firm Fifth Wall, London-based investment manager Fidera and US alternative credit investment manager Vibrant Capital.

New local and regional entrants included Abu Dhabi sovereign wealth fund ADQ, venture capital asset manager Chimera Capital, artificial intelligence group G42, alternative investment manager Gulf Capital, alternative investment manager OneIM and Bahrain-based asset manager Investcorp.

ADGM was established in 2015 as a financial free zone in the Emirate of Abu Dhabi, with its own civil and commercial laws. Driven by innovation, it was the first jurisdiction in MENA to directly apply Common law, it established the world’s first fully digital courtroom, it introduced the world’s first comprehensive crypto asset regulatory framework and the first ‘Digital Sandbox’ with a participating regulator.

The ADGM has also emerged as a hub for sustainable finance in the region, supporting the growth of sustainable finance and the acceleration of the UAE’s green economy agenda. With a strong emphasis on transparency and governance, the ADGM has successfully introduced the region’s first comprehensive sustainable finance regulatory framework, encompassing funds, portfolios, bonds, sukuks and carbon-offsets, as well as Environmental, Social and Governance (ESG) disclosures.

The ADGM Growth Strategy 2023-2027 is fully aligned with Abu Dhabi’s goal of driving sustainable economic diversification through the growing financial sector. Last May, ADGM announced a tenfold expansion by bringing Al Reem Island under its jurisdiction, transforming it into one of the world’s largest international financial centres with a total area of 14.38 million sqm.

The growth in the number of operational entities combined with the expansion of existing ADGM-based financial institutions, such as JP Morgan and BNP Paribas, saw a 22% rise in ADGM’s workforce during 2023 to reach 13,394.

“Enhancing Abu Dhabi’s international standing as the ‘capital of capital’, ADGM has truly realised the capital city’s potential for the financial landscape and strategically unlocked opportunities within underlying sectors,” said ADGM Chairman Ahmed Jasim Al Zaabi. “The growth that we are witnessing today is the realisation of the visions of the UAE’s leadership. We remain strongly positive as we move forward into 2024.”

Other significant achievements at ADGM during 2023 included:

• The launch of ADGM’s inaugural Money Laundering and Terrorist Financing (ML/TF) Risk Assessment of ADGM Legal Persons and Arrangements Report (LPA Report).
• The launch of Numou, a digital platform tailored to bridge the funding gap faced by SMEs in collaboration with Al Maryah Community Bank, RAKBANK, Commercial Bank International, CredibleX and Khalifa Fund, which have collectively committed to extend lending up to AED220 million.
• The ADGM Registration Authority (RA) issued an updated version of the Beneficial Ownership and Control Regulations 2022 (BOC Regulations), which repealed and replaced the existing Beneficial Ownership and Control Regulations 2018.
• The ADGM Financial Services Regulatory Authority (FSRA) announced revisions to its Anti-Money Laundering and Sanctions Rules and Guidance (AML Rulebook).
• The ADGM RA published the legislative framework for Distributed Ledger Technology (DLT) Foundations.
• The ADGM Arbitration Centre launched ODR@ADGM, an online dispute resolution platform that hosts a fully digitalised settlement and mediation service.
• The ADGM Academy (ADGMA) achieved the milestone of training, upskilling and reskilling more than 1,000 UAE Nationals for employment in the private sector, including more that 500 graduates from the National Development Programme (NDP).
• The ADGMA Entrepreneurship Programme enrolled over 300 candidates and the first international Student Challenge was presented at the SWIFT International Banking Operations Seminar (SIBOS), a global financial services event.
• ADGMA signed 82 strategic partnership agreements, including two international partnerships and five partnerships for research and innovation. It also signed 19 Memorandums of Understanding (MoUs) to explore future alliances with both academic and corporate entities.

How can Sovereign assist?

Establishing a company within the ADGM free zone can be a complex process. Sovereign Corporate Services has an office in the ADGM and was recognised as the first licensed ‘Corporate Services Provider’ within the ADGM regulatory framework.

Our team offers comprehensive support to any business establishing a legal entity in ADGM and can provide direct access to government entities and regulatory bodies. We will provide guidance and expertise throughout the process and will review applications before submission to ensure that your structure meets all business and regulatory requirements.Top of Form

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In January, the UAE government confirmed that it had withdrawn the previous requirement for an AED1 million (USD272,294) ‘minimum down payment’ for applicants to qualify for a Golden Visa through real estate investment.

What has changed in the UAE Golden Visa property rules?

The UAE Golden Visa, a 10-year renewable residency programme, was introduced in 2019 to encourage exceptional individuals and foreign investors to establish deeper ties to the country.

It is targeted at investors, entrepreneurs, skilled professionals who earn a monthly salary of more than AED30,000 (USD8,167), exceptional talents, scientists and professionals, outstanding students and graduates, property investors, humanitarian pioneers and frontline heroes.

To qualify under the property investment route, investors are required to acquire property in the UAE valued at AED2 million (c. USD550,000) or above. But for properties bought on mortgage or instalment plans, applicants were further required to make a minimum down payment of AED1 million, or 50% of the property’s value, to the bank or developer. This additional requirement has now been withdrawn.

Eligibility for a UAE Golden Visa is therefore now based solely on a real estate value of AED2 million or more, irrespective of whether the property is off-plan or completed, mortgaged or not mortgaged. Furthermore, joint ownership is acceptable, such as between spouses, provided that the applicant’s share is valued at AED2 million or more.

To meet this requirement, spouses or first-degree relatives can consolidate ownership for the application by effecting a transfer of ownership to the main applicant at the relevant land registry. Once the main applicant receives the Golden Visa, he/she can sponsor the other owner and dependents.

How do the new rules benefit property investors?

• Eliminating the minimum down payment requirement will increase accessibility to the real estate market in Dubai and across the wider UAE to a broader range of potential investors with varying capital levels.
• Mortgage buyers will now be able to apply for the Golden Visa, which allows them to sponsor their family and domestic staff.
• Broader access to the Golden Visa provides investors with greater stability and opportunity both in Dubai and across the wider UAE.
• Increased investment will stimulate demand in Dubai and across the wider UAE, elevate property values and should ensure higher returns on investments.
• The reduced initial capital requirement will enable investors to diversify their portfolios, fostering long-term capital appreciation and increased risk mitigation.
• The change has the potential to act as a catalyst for the economy of Dubai and across the wider UAE, driving growth in various sectors.

How Sovereign supports UAE Golden Visa applications

In addition to the UAE Golden Visa property investor category, there are a number of alternative options through which individuals can obtain long-term residency in the UAE. Sovereign Group has decades of experience in the corporate services sector in the UAE and wider GCC, and can assess your eligibility for any Golden Visa option.

If you need assistance with Golden Visas in the UAE or with company formation, registration, PRO support or any other related service in the UAE, please complete the contact form below or contact us on +971 4 270 3400 or email us at info@sovereigngroup.com. We will be delighted to assist.

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