Deciding on where to set up your business is one of the biggest decisions a business owner has to make, and while the UAE offers many options, the best location is usually the one that offers ease of doing business and quick access to the facilities required for operational success. The emirate of Abu Dhabi in the UAE has streamlined the process significantly in recent years, while facilitating streamlined regulations and massively reducing red tape to nurture a conducive business environment.
Thankfully, if you are thinking about launching in Abu Dhabi, there is a healthy selection of locations to choose from. Prime among these are free trade zones (free zone, or FZ) that offer businesses competitive set-up packages, attractive incentives, and reduced costs and taxes, in addition to other benefits.
Among the five free zones present in the emirate of Abu Dhabi, the Abu Dhabi Airports Free Zone (ADAFZ) is the best destination for businesses involved directly or indirectly with the sectors of travel, tourism, aviation and logistics. ADAFZ is the commercial arm of Abu Dhabi Airports, and its jurisdiction spreads across more than 88 km2 around three of the emirate’s airports, covering many commercial districts which include the Logistics Park, Business Park, Destination Village, Al Falah District and Airport City.
The Abu Dhabi SME Hub spoke with Adel Al Taheri, VP Free Zone Sales & Services, to learn more about ADAFZ’s offerings and why entrepreneurs should make it the destination for their next venture.
Services and incentives offered
As with most free zones, ADAFZ’s services are tailored to provide an operational and business advantage to businesses within a specific industry or industries, which in this case encompasses aviation, travel, and logistics.
“We understand that time is valuable for ADAFZ’s customers, which include SMEs, startups, multinationals, and foreign direct investors. So, we put a lot of effort into absorbing time-consuming activities and processes to make their lives easier and to allow them to focus on what’s important to them: their business. The full spectrum of Free Zone services, including company registration, licensing, leasing, rapid visa processing for employees, and many other high-quality services, are literally under one roof and available to them,” Al Taheri explained.
“On offer is a wide range of facilities and infrastructure, from warehousing units, commercial offices, and furnished facilities within a fully serviced business centre, to plots of land for development and a range of essential ancillary amenities to serve everyday business needs. Given ADAFZ’s strategic location, the real estate options available are also unique in that they offer quick access to major Abu Dhabi airports and import/export hubs due to their proximity.”
What kind of businesses can you expect to see in ADAFZ?
Businesses operating in aviation, travel and logistics are ADAFZ’s top customers; companies like Etihad Airways, DHL Express, FedEx and Aramex have all taken advantage of being located at ADAFZ as they recognise huge benefits of being in this unique location, Al Taheri explained.
But it’s not just the big brands that choose ADAFZ as their home; jewellery stores, restaurants, banks, exchange shops, and bakeries, among others, provide a support community offering a full range of services to tenants and day visitors of the free zone. Al Taheri then elaborated further, adding that the presence of these B2C stores is also due to the free zone being a host to duty-free shopping areas, which attract both SMEs and multinational franchises from all industries.
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When asked why a business should consider setting up in ADAFZ, Al Taheri cited the numerous packages, cost savings, operating models and tax exemptions entrepreneurs can avail. For startups and SMEs short on capital, the free zone offers affordable Flexi Desk subscriptions within its co-working spaces, costing AED 4,000 annually. Couple this with the price of a trade license, also AED 4,000, and you are effectively "operating at the airport, which is a prime location, while being close to your customers” for great value.
But that is just where the savings start. As a business registered in a free zone like ADAFZ, you are exempt from paying the 5% customs duty on imported goods, as well as the mandatory 5% VAT charge in certain districts. Additionally, you are future-proofing the profitability of your business, as the 9% corporate tax that will go into effect next year in the UAE does not apply to free zone companies, Al Taheri reminded.
These savings, together with the strategic location on offer, make ADAFZ an ideal destination for businesses that can capitalise on these benefits and opportunities.
Pandemic impact and growth plans
While the pandemic shook the travel and aviation industry to its core in 2020, ADAFZ companies were able to brave this storm thanks to timely discounts and price cuts, as well as a cooperative relationship with the administration of the free zone that supported businesses in their time of need. This, Al Taheri noted, helped many companies operating within their free zone to stay afloat, while also attracting others to join even during these tough times.
Moving forward, ADAFZ is focusing its efforts on upgrading some of its facilities, particularly those within the logistics sphere. To increase capacity and absorb the rising demand for office spaces, ADAFZ is in the process of constructing additional commercial buildings.
You can find more information about setting up in the Abu Dhabi Airports Free Zone here.