Economic Diversification in Abu Dhabi-Freezones in Abu Dhabi

Freezones in Abu Dhabi

Abu Dhabi is taking a number of important steps to diversify its economy away from any over-dependence on hydrocarbons. The Emirate intends to become one of the most attractive investment destinations in the region. With this in mind, various specialized economic zones offering tax-free incentives to investors and catering to a variety of industrial sectors are being developed.

Industrial Development

Abu Dhabi is in the process of developing a modern industrial sector capable of reducing the traditional importance of oil and gas. There is major effort underway to attract increased foreign direct investment into the Emirate, or example into aluminium, iron & steel, glass, petrochemicals, and also the health care and financial services sectors, to name but  a few. At the same time education and training sectors are being targeted, to the thousands of UAE nationals gain basic and specialized qualifications.

Abu Dhabi possesses various of the key ingredients necessary to create a successful industrial sectors. Availability of industrial land, natural resources, cheap energy, state of the art industrial infrastructure, fast and flexible project delivery, simplified procedures for obtaining industrial licenses and flexible foreign ownership regulations are some of the major factors that make Abu Dhabi and attractive destination for investment in the industrial and manufacturing sectors.

The Higher Corporation for Sepcialized Economic Zones (‘ZonesCorp’)

In line with the Government’s vision to make Abu Dhabi  a favoured investment destination, a higher institution for Specialized Economic Zones, ZonesCorp, was launched as an initiative under law number (3) of 2004.

Supported by the Government, “ZonesCorp” is directly responsible for the establishment, management and operation of specialized economic zones in Abu Dhabi. It is committed to the development of industrial infrastructure in the capital and to the creation of a business environment conducive to driving growth and diversification of the economy.

ZonesCorp: a One-Stop-Shop

Because land development must be preceded by the acquisition of a license, it stands to reason that the faster and easier an investor can obtain an industrial license, the more likely they will be consider undertaking an industrial investment in Abu Dhabi. This is where ZonesCorp plays a key role. To succeed in creating an industrial environment conducive to sustainable economic development, ZonesCorp has established the one-stop-shop program for industrial land provisioning and licensing.

The close cooperation and existing coordination between the Corporation and the various government bodies the ZonesCorp provides the following services to an investor.

• Forwards the application to the concerned department
• Reserves the land depending on availability and prepare the lease contract.
• Gets approval from the Environment Agency
• Process a construction permit and grant preliminary approval
• Issues the permanent industrial license.

What does ZonesCorp Offer?

a.            Investment Climate:

• Conducive business climate
• State of the art infrastructure
• Cluster-based zoning model, allowing the full integration within the industry value chain deriving synergy benefits.

b.            Operational Benefits:

• Products manufactured within the zones enjoy duty-free access to the Gulf Cooperation Council countries, as well as to signatory countries to the Greater Arab Free Trade Agreement.
• Duty -free import of machinery and raw materials.
• Customer-centric approach through the adoption of a “one-stop-shop” concept.
• Tax exemptions
• Free repatriation of profit and capital
• Competitively priced utilities.

c.             Workforce:

• International spectrum of skills
• Vocational training centers ensuring supply  of skilled  labour force
• Workers’ Residential Cities providing world-class labour accommodation
• Streamlined labour procedures through the Foreign Labour Services-FLS.

d.            Logistics:

• 12 minutes to Abu Dhabi International Airport
• 50 minutes to Jebel Ali Prot and Jebel Ali Airport
• Planned on-site Port-the Abu Dhabi Industrial Port-to serve ZonesCorp’s projects.

e.            Other Services:

• Provision of advice to help select the land plot suitable for the needs of the investors and assisting them determining their operational requirements.

Zones is managed by ZonesCorp

Industrial City of Abu Dhabi: ICAD I

ICAD I is focused on heavy-to-medium manufacturing, engineering and processing industries, including metal products, construction materials, fiberglass and plastics assemble. It hosts a shopping mall and other services including a hotel, a culture centre, a business centre, bank services, a clinic an da new residential complex for workers. ICAD I extends over an area of 14km².

Industrial City of Abu Dhabi: ICAD II

ICAD II is focused on light-to-medium manufacturing, engineering and processing industries, including wood processing, oil and gas, construction material and chemicals. The zone covers an area of 11km² and has been constructed in distinct phases according to a detailed master plan.

Industrial City of Abu Dhabi: ICAD III

ICAD III is focused on light-to-medium engineering and processing industries with an international focus. Wood processing, chemicals and plastics, construction materials, high-tech industries, and food and textiles are the key target sectors for this zone. it extends over an area of 12 km².

Al Ain Industrial City (I and II)

Al Ain Industrial City is a multi-use development with a focus on Small and Medium Enterprises (SMEs) in the light-to-medium manufacturing, engineering and processing industries, including wood, chemicals, plastics, construction materials, food and textiles. it covers an  area of 10 Km².

Future Freezones Zones planned in Abu Dhabi

ICAD IV  and V, Energy Zone

Indicative rate of land lease and utilities

Rate of Land: AED 20-30/sq. meter per year [land lease for  30 years; renewable]

Cost of Eclectircity:15 files/KWA

Cost of Natural Gas: AED 5/MMBTU

Cost of Water: AED 2.20/CM

Al Ruwais Industrial Complex

Al Ruwais Industrial Complex located about 240 km west of Abu Dhabi, was developed by Abu Dhabi National Oil Company (ADNOC) and hosts a number of petrochemical industries. It includes an oil refinery plant, a natural gas liquids fractionation plant, a fertilizer plant, a marine terminal and a sulphur handling terminal.

Industrial City at Madinat Zayed

The Industrial city at Madinat Zayed, will be set up on an area of 5.2 square kilometers. It will be dedicated to oil and gas services, food-related industries and logistics.

Source: Morison Menon