Understanding exactly what each free zone has to offer is the most important step when deciding where to locate your UAE business.
It’s vital you get it right.
So here’s what you need to consider when making your selection– and why Abu Dhabi Airports Free Zone (ADAFZ) and Khalifa Industrial Zone Abu Dhabi (KIZAD) are two front-runners when it comes to the most exciting hotspots in the UAE.
1. Strategic locations
Picking the best free zones for easy trade routes and logistics.
For many entrepreneurs, a strategic location is the single most important factor in selecting the ideal place to trade in the UAE.
It’s crucial to locate your startup in a business zone that allows you to trade easily with other parts of the UAE, as well as the rest of the world. Even more so if your company relies on complex logistics or shipping.
This is where ADAFZ and KIZAD stand head and shoulders above other free zones and mainland startup destinations, and indeed many global startup hubs.
ADAFZ and KIZAD stand head and shoulders above other free zones and mainland startup destinations, and indeed many global startup hubs.
ADAFZ is a premium ‘aerotropolis’ built around Abu Dhabi International Airport, making it one of the UAE’s most strategically and financially prominent free zones. A wholly owned subsidiary of Abu Dhabi Airports, ADAFZ also includes strategic sites at Al Ain International Airport and Al Bateen Airport.
KIZAD is built right next to Khalifa Port, one of the world’s most advanced deep-sea ports and the region’s first semi-automated ports. It is served by 20 major shipping lines and connected to over 60 destination ports. Both free zones are linked to the UAE’s major road networks.
Why ADAFZ and KIZAD are the perfect locations
It’s not just geography that makes ADAFZ and KIZAD attractive to entrepreneurs – it’s the substantial government investment in infrastructure to maximise the benefits of these strategic locations.
This is evident in the sheer scale of the airport free zone which spreads out over an area of more than 10 square kilometres and includes five commercial districts – Logistics Park, Business Park, Destination Village, Al Falah District and Airport City.
Both ADAFZ and KIZAD are part of Abu Dhabi Government’s long-term economic vision, which seeks to transform the emirate’s economy, reduce reliance on oil, and place greater focus on knowledge-based industries.
In fact, Khalifa Free Zone was built with the aim to contribute 15% of the emirate’s non-oil GDP by the year 2030. It is designed to meet the highest standards of infrastructure, logistics and investor support.
Khalifa will also soon be a key junction on the UAE’s new railway system – Etihad Rail – which will link up transport hubs in the UAE with Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman.
2. Affordable setup costs
Making the right choice when it comes to costs.
Strategic location is important but it’s not everything. Entrepreneurs aiming to launch a new enterprise in the UAE will clearly want to keep costs to a minimum.
This is where the advantage of locating in an Abu Dhabi free zone really pays off.
- No income tax
- No tax on capital gains and sales
- No custom duties
- 100% repatriation of capital and profit
- Low operational costs
Add in the fact that free zones allow 100% foreign ownership and it makes for a compelling case to set up a business here.
How to minimise startup costs in ADAFZ or KIZAD
While tax exemptions are a huge draw, there are also unique benefits of setting up in Abu Dhabi in terms of running costs.
One area where substantial savings can be made for industrial companies is the low cost of utilities in the emirate. Startups based in Abu Dhabi can benefit from some of the lowest rates anywhere in the world for water and electrical power.
One area where substantial savings can be made for industrial companies is the low cost of utilities in the emirate.
3. Ease of doing business
The UAE is ranked 11th globally for ease of doing business by the World Bank’s Doing Business 2019 survey.
Apart from the obvious advantages of strategic location and tax exemptions, entrepreneurs benefit from a purpose-built infrastructure, world-class utilities and support services, and a ready-made business hub with easy access to regional and global markets.
How to benefit from doing business in ADAFZ and KIZAD
The other big plus point of operating a new business in ADAFZ or KIZAD free zones is they each offer thriving business hubs for specific industry sectors.
ADAFZ provides warehousing and fully serviced offices for startups in a wide range of business sectors, which of course also benefit from being next to the international airport.
Typical sectors in the airport free zone include:
- Aerospace, airlines and aircraft-related services
- Logistics, transportation, distribution and storage
- Assembly and light manufacturing
- Technology and communications
- Trading and retailing
- Luxury goods
KIZAD is attractive to entrepreneurs who want to specialise in trade and logistics, and manufacturing.
Key specialties in the Khalifa industrial zone include:
- Aluminium, steel and metal products
- Paper and packaging
- Food processing
- Pharmaceutical and healthcare equipment
- Polymer converting
- Automotive spare parts
Each zone offers something extra to make doing business easy. ADAFZ, for example, provides a ‘one stop shop’ for quick, simple registration and licensing.
Meanwhile, KIZAD provides free zone as well as non-free zone options, giving entrepreneurs greater choice of where and how to do business, while enjoying the benefits of the same infrastructure and logistics.
With such an impressive array of options for startups, the challenge facing entrepreneurs is not where in the world to locate, but which Abu Dhabi business hotspot to choose.
If you’re still undecided, or if you need help with setting up in business here in the Emirates, don’t forget to choose an expert local agent to help guide you through the startup process. And for more impartial advice, use an agent that doesn’t just specialise in a single zone.
Worldwide Formations helps entrepreneurs in the UAE with all their company setup needs. For more information, call us now on 800 FREE ZONE (800 3733 9663).