Free zones in Abu Dhabi are an attractive jurisdiction for investors. All conditions for convenient international trade have been created here. Thousands of companies have been licensed in recent years. Local authorities are doing their best to attract new directions to contribute to the development of the economy and the country as a whole. It should be noted that such a solution is not unique. The project was developed based on the experience of many world powers.
What is a Free Zone?
If you are planning to open a business, then you should carefully look at the free zone area in Abu Dhabi. This is the optimal place, because convenient and favorable conditions are provided. During registration and further work, so much effort is not required. As a rule, investors are provided with sparing conditions. Thus, the authorities are trying to develop the country’s economy and get rid of the oil industry.
The main difference is the ability to conduct business for foreign organizations. On the territory of the state, the management of the firm should be carried out with the involvement of local citizens but in free zones this is not a prerequisite. Entrepreneurs implement their project not only in the territory in which they received a permit, but also have partnerships in other countries. Each zone defines its own rules, as well as the type of activity, so it is important to study all aspects in order to know how to get a license and how to work in the future.
The meaning of open areas is that foreigners do not have to adapt to the internal laws of the country, they only need to comply with the rules of the selected region.
In General
The main reason why entrepreneurs choose free trade zones is that they conduct business, for example, trade or provide services, not only within the region. Many businessmen who plan to enter the world market choose similar conditions. International business is open. In most countries it is very difficult to open an enterprise to foreign citizens, but here they do it. To explain such a fact is simple. In recent years, the country has been trying to reduce the impact of oil on the development of the country’s economy, but local investors cannot occupy the entire niche of business, so the authorities have to use the desire of foreigners to do business in the country.
The formation and use of the firm are free of charge. Although you will have to pay fees for registration, rent, etc., then you will practically not have to invest money.
Differences between Mainland (Onshore) and Free Zone (Offshore)
For the first time, an economic zone appeared on the territory of the state 35 years ago. The new economic policy contributed to the prosperity of the state. In just a few years, the country has reached a leading position. Many appreciated the opportunities for development and moved here. Oil has no longer become the only source of income. This turned out to be an impetus to the development of the country’s economy. Up to this point, businessmen could only open mainland companies within the city. But there are limitations. Most foreigners simply do not take advantage of such conditions. Plus, getting a license is really difficult. The main differences are:
- The composition. Only foreigners do not manage mainland organizations. A certain number of local entrepreneurs are required. According to the laws, the local co-founder must have a large stake, which makes it possible to determine decisions. The development of the organization is strictly in accordance with the local mentality. But here there are great difficulties. There is no such thing in special economic districts, non-locals open organizations on their own.
- If you plan to conduct business on the mainland, then the mandatory condition is the presence of an office. Again, difficulties due to rent and regular costs for this.
Of course, mainland organizations also have advantages. For example, activities can be carried out in a country, and not just within one zone.
Foreign Ownership
Investors who open a business in the economic zones are offered 100% ownership. You do not need a citizen partner to register a company in the FEZ, which is undoubtedly a great advantage.
Applicable Regulation
Why do many people reject the idea of opening a firm in a free zone? The answer is obvious. Investors plan to do business, for example, trade with local firms. But there is a solution. The legislation does not prohibit transactions through dealer onshore companies. In addition, employers often attract logic service providers. As a result, the investor does not operate on the territory of the country, but his organization does not suffer in any way. Convenient and profitable. On the territory of the zone, they open not only the main companies, but also branches. There are several conditions, in particular, a similar name and a permitted type of activity. As a result, according to the laws, the branch will not be taxed.
After opening a firm, a businessman gets a visa, which will be valid for two or three years, depending on the conditions.
Permitted Area for Doing Business
You need to choose a suitable area depending on your investment budget, business conditions, visa and office requirements.
Features of the business climate are:
- Trading activity.
- Production activity.
- Business services.
- Residence permit and tax residence.
- Registration of property.
- International business.
Advantages and Disadvantages
Pros:
- No corporate and personal taxation (5% VAT is charged only under certain conditions);
- One hundred percent ownership of the company;
- Full repatriation of capital and profits;
- Resident Visa for investors, employees and family members;
- No import and export duties;
- Access to modern infrastructure.
Cons:
- Your office should be located exclusively within the economic area where your company is registered.
- Each economic district has its own corporate laws that regulate the process of creating a company, which adds additional complexity and loss of time when choosing.
List of Free Zones in Abu Dhabi
Each area has its own terms of cooperation and offers its own benefits to investors. Let’s look at the list of free zones in Abu Dhabi.
Abu Dhabi Airport Free Zone (ADAFZ)
The name was chosen for a reason. Thus, the owners showed that there is an international airport in the immediate vicinity. It is this fact that attracts most entrepreneurs. In addition, corporation owners receive favorable conditions. They have access to offices, warehouses and even aircraft hangars. A great place for international job with a large volume of goods. If you need to build objects, then you get a plot of land on the territory. This is not just an office, but a real park with thousands of opportunities.
General
- The registration process takes approximately two weeks.
- In the region, foreigners can engage in services or trade.
Permitted Activities
Industry segments and licensed projects are:
- Aviation and airport services.
- Logistics and storage.
- Marketing event.
- Production.
- Trade.
- Science.
Types of Entities Allowed
- Land for rent: There are land plots for long-term rent, where you can find your specialized/built-in facilities.
- Ready storage facilities: available storage areas: 360 m2 (15m x 24m) and multiples of a maximum of 2,880 m2 (8 units) under one roof.
- Offices: Several rental options are available on the territory of airports.
- Business Center: Workstations and offices are already equipped so that you get to work.
Other Items
As a rule, the park is chosen by dealers whose activities are aimed at trade and related services. A large selection of commercial facilities contributes to the development of trade relations. For example, within the corporation, you can simultaneously trade, store or transport large quantities of goods.
Abu Dhabi Global Market (ADGM)
The sector was opened on the initiative of the Government of the Emirate. Basically, the place is chosen by corporations focused on financial and innovative projects. Thus, economic growth accelerated several times. Advanced and technological organizations contribute to the organization of international exhibitions and other events that increase the level of development.
General
- Registration time: 5 working days
- You can apply for trading or various financial licenses, including cryptocurrency
- Financial investments start from 50,000 dollars or 185 000 dirhams.
Permitted Activities
- Financial and banking;
- Professional;
- Retail trade.
Permitted Entities
Here employers can open private companies, open societies and even branches of foreign enterprise.
Other Items
Investors choose this area because of the comfortable conditions for finance, consulting or providing legal services. Local authorities allow dual licensing. In addition, dealers have the right to conduct business outside the area.
Masdar City Free Zone
It is located in the Masdar City eco-project, which is also well-known outside the Emirates. It is located 17 km away. from the very center of the capital.
It can be called a real ecological city, since the policy is aimed at using renewable energy sources and using only environmentally friendly technologies. The main task is to take the business to a new level. Investors are attracted by promising areas, as well as modern offices and a laboratory that are available for competent development.
General
- It began accepting applications from those wishing to establish their own company in 2006.
- The period of verification of documents for a permit takes from 14 to 20 days.
- Main directions: trade and services.
Permitted Activities
As a rule, the area is designed for conducting commercial or industrial projects. Within these main areas, corporations provide logistics or transport services. In addition, organizations aimed at grocery services are often opened.
Permitted Entities
Foreign entrepreneurs can use offices equipped for comfortable work. Companies focused on industrial projects use high-tech laboratories. In addition, you can open or rent shops.
Other Items
The main difference is that the local government supports eco-friendly ways of doing business, in particular, the use of renewable sources. Technology and innovation are what attract dealers.
Khalifa Industrial Zone – Abu Dhabi (KIZAD)
It started working after the introduction of the emirate’s policy aimed at regulating financial and innovative development. Such a decision had a positive impact not only on the development of one region, but also on the whole country. High-tech corporations began to move here.
The place quickly became positioned as an international financial center not only in the Middle East.
Businessmen work in the field of banking services, asset management, insurance and other financial areas. The main difference is the opportunity to get a license to work with cryptocurrencies and blockchains.
General
- Year of foundation: 2015.
- Registration time: 5 days.
- Types of licenses: trading, service, financial, cryptocurrency.
- The minimum authorized capital is 50,000 dollars or 185 000 dirhams.
Permitted Activities
The main sectors are industry, trade logistics, food and beverages, transport, pharmaceuticals.
Industrial
It makes it possible to conduct industrial activities, in particular, to produce, process and import raw materials.
Trading Licence
It opens up the opportunity to do various actions in the field of trade. Import, export or storage are all included in the license.
Service Licence
Within the framework of a businessman’s license, he can provide facilities in the field of finance, marketing, legal, etc.
Permitted Entities
It offers a world-class transport infrastructure, including sea, air, road and rail networks.
Other Items
The open companies and branches are available to investors as a type of object.
Twofour54 Media & Entertainment Hub (twofour54)
The area is designed for services that are provided in the media sphere. Conditions, equipment and facilities are designed for this area. You can get not only a real office, but also a virtual view to do the work. Close location from the airport.
General
- Year of foundation: 2008
- You can get a permit within 10-15 working days.
- You can work in the service sector or freelance.
- The main difference is that there are no restrictions on the initial capital.
Permitted Activities
Employers conduct any activity related to the media. It may be advertising, graphic design, animation, and more.
Permitted Entities
Provides infrastructure and support facilities for international, regional and local media corporations.
Other Items
“twofour54” is a place for creative firms in the field of media, broadcasting, games and communications. All the necessary world-class infrastructure is offered.
One of the most attractive features of Abu Dhabi for businessmen and investors is its economic area. If you are planning to open your own business, but are afraid to make a mistake with the location, follow the proven methods of thousands of entrepreneurs – use one of the free zones in Abu Dhabi.
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