Abu Dhabi government incentives

Abu Dhabi government incentives

- Jade Wong

As the global business landscape continues to evolve, entrepreneurs and investors are seeking destinations that offer stability, growth, and attractive incentives. Abu Dhabi exemplifies these qualities and has emerged as a compelling choice for businesses looking to establish a presence in the region. With its progressive policies, robust infrastructure, and strategic location, Abu Dhabi offers a multitude of opportunities for international enterprises.

Abu Dhabi's drive towards economic diversification and sustainable growth, has led to the implementation of a range of measures to encourage and support foreign investment. Government incentives such as the Abu Dhabi Investment Office (ADIO) innovation programme, Industrial Development Bureau (IDB) incentives and Khalifa Industrial Zone’s (KIZAD) pay-per-use model for warehousing services are a few of the examples of the ways in which the Abu Dhabi government is providing businesses with the necessary support to gain a foothold in the UAE.

These programmes are providing support to industrial, manufacturing and tech businesses to establish themselves in the UAE and gain access to crucial support and investment.

What incentives are available to businesses setting up in Abu Dhabi?

Khalifa Industrial Zone Abu Dhabi (KIZAD)

Khalifa Industrial Zone is one of the largest industrial and logistics zones in the UAE. Its strategic location between Abu Dhabi and Dubai provides easy access to major seaports, airports and highways and its proximity to Khalifa Port, one of the region’s most advanced deep-water ports, offers businesses efficient logistics and supply chain connectivity.

As a free trade zone, Khalifa Industrial Zone offers numerous benefits to businesses including 100% foreign ownership, no corporate or personal income tax, and customs duty exemptions.

The free zone caters to a diverse range of industries, including manufacturing, logistics, petrochemicals, food processing, automotive and healthcare, and it provides dedicated clusters and zones designed to meet the specific needs of different sectors.

One of KIZAD’s most recent initiatives is the launch of its ‘Logistics City’ adjacent to Khalifa port. It is the first on-demand warehousing offering in the Middle East, providing a pay-per-use model for customers. This service allows investors to optimise costs by paying only for the space and services they require. Instead of committing to long-term leases or building their own warehouses, investors can utilise the warehousing facility as needed, reducing fixed overhead costs. It also provides flexibility and scalability with the option to adjust storage space based on demand fluctuations, seasonal variations, or business expansion plans.

The warehousing area covers an area of 1.3 million square feet with units available from 10,000 square feet and above, each providing ramp access, on-site parking and the possibility to customise premises to suit business requirements.

The ADIO Innovation Programme

The ADIO Innovation Programme is an initiative launched by the Abu Dhabi government to support and foster innovation in key sectors of the economy such as agritech, financial services, ICT, health services and biopharma, and tourism. The programme has access to a AED 2 billion fund to drive research and development and aims to attract innovative companies and entrepreneurs and provide them with the support needed to succeed in the market.

Among the benefits available from ADIO UAE are:

  • Funding opportunities in the form of grants, equity investments and other financial instruments to assist with commercialisation and market expansion.
  • Market access through networking events and introductions to potential customers, investors and strategic partners.
  • Access to state-of-the art infrastructure, research and development facilities and specialised equipment.
  • Collaboration with educational institutions to provide access to talent, research expertise, and customised training programmes.
  • Assistance in navigating regulatory requirements and government procedures.

So far, ADIO (Abu Dhabi Investment Office) has partnered with 49 companies in tech focused industries and awarded AED 1.3 billion in investment, helping to create a collaborative ecosystem and give companies operating in the tech sphere a competitive advantage.

The Industrial Development Bureau (IDB) incentives

The IDB is the regulator for the industrial sector in Abu Dhabi. It develops and manages industrial sector strategies and oversees all regulations and licences.

It offers a range of incentives to support industrial growth and attract investment. These include:

The Energy Tariff Incentive Programme (ETIP)

This programme supports the private industrial sector by offering reduced rates on electricity and gas consumption, helping manufacturing businesses improve their energy efficiency and lower operational overheads. It is available to existing industrial entities that have been in operation for more than 6 months. Business operational for less than this period are eligible as new entities, but can only apply for the reduced electricity tariff.

Applications are received through TAMM, Abu Dhabi’s online government services platform and eligibility for ETIP is assessed using the following criteria:

  1. 1. Economic impact
  2. 2. Productivity
  3. 3. Electricity management System (for electricity tariff)
  4. 4. Demand Side Management (for gas tariff)

The Land Rebate Incentive Programme

Launched by the Abu Dhabi Department of Economic Development, The Land Incentives programme provides investors in new industrial projects with rent rates as low as AED 5 per square metre and long-term lease contracts in any of the lands allocated under one of Abu Dhabi’s industrial developers. The aim is to incentivise businesses to choose the UAE as their manufacturing base and to further develop the manufacturing industry in the emirates. It is open to applicants in any of the following manufacturing subsectors that have an ‘under construction’ industrial licence or a have been in production for no longer than 6 months.

  1. 1. Electrical and Electronics Manufacturing
  2. 2. Chemical manufacturing
  3. 3. Food Processing
  4. 4. Pharmaceuticals
  5. 5. Machinery and Equipment Manufacturing
  6. 6. Transportation Manufacturing

Businesses will be able to apply for rebate at the end of their contract period by providing proof of payments, a bank certificate with IBAN/account number matching the applicant’s trade licence number and confirmation from the developer that all contractual obligations have been met. The funds will then be released through the Department of Finance.

The Smart Manufacturing Programme

This new index was launched by Abu Dhabi’s Department of Economic Development in February 2022 to accelerate the adoption of new technologies by manufacturing facilities, spur innovation and reduce waste and emissions across seven key manufacturing sectors:

  • Chemicals
  • Machinery
  • Electrical
  • Electronics
  • Transportation
  • Food processing
  • Pharmaceuticals

The aim is to modernise the industrial sector by providing financing solutions through the commercial banking system to enable businesses to become more automated, more efficient and safer.

It does this by providing a framework which evaluates the current capabilities of industrial businesses, identifying areas of potential improvement and providing the necessary knowledge, training and strategies needed to help them leverage emerging technologies in their production process.

This programme is a critical step towards the UAE’s goals of a circular economy with more responsible production and consumption and provides support to businesses in adopting Industry 4.0 technologies and applications.

The Financial Ecosystem Programme

The Financial Ecosystem Programme was developed by the IDB to provide companies in the industrial and commercial sectors with a simple way to access funding through loans from Abu Dhabi’s most prominent banks.

The initiative is part of a drive to encourage banks to provide financing services to businesses in key economic sectors across the emirate and to make financing for business owners easier and more accessible.

The application process can be completed online through the IDB’s website and first involves an evaluation of the applicant’s business case by partner banks before receiving an offer of a suitable funding solution that fits the nature of the economic activity.

The following are the documents required for submission and consideration:

  • 1. Industrial license
  • 2. Emirates ID/Passport of shareholders
  • 3. Incorporation documents (e.g. Memorandum of Association, Partnership Agreement, Shareholding details and profile of the shareholders.)
  • 4. Brief Company Profile
  • 5. Latest Audited Financial statements
  • 6. Bank Statement for company (6 months - 1 year)
  • 7. Feasibility Study/Project report (if any)
  • 8. Etihad Credit Bureau report of the company or the shareholders

How can PRO Partner Group help?

These initiatives represent a huge incentive for foreign investors to reduce operational costs, enhance their competitiveness and gain access to a strategically located market with strong trade links. They demonstrate the Abu Dhabi government’s proactive approach in developing its economy and supporting businesses with a solid foundation for growth and success.

Investors from countries with free trade agreements with the UAE, in particular, have a great opportunity to establish their manufacturing base in Abu Dhabi and take advantage of financial assistance, reduced trade barriers, streamlined customs clearance, and the strategic location of Abu Dhabi to explore regional and international trading opportunities.

At PRO Partner Group, we have years of experience helping our clients with company incorporation and other investment ventures. We have direct contact with government departments throughout the UAE and can facilitate all the procedures and paperwork on your behalf.

If you need assistance with setting up a company in the UAE, gaining access to Abu Dhabi government incentives or any other related company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at info@propartnergroup.com or complete the contact form below and we will be delighted to assist you.

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