Manufacturing In Abu Dhabi and Dubai Is A Key Focus To Diversify Away From Oil

7th July 2015

The UAE is in the process of diversifying away from oil, as part of its Economic Vision 2030, in order to achieve sustainable economic development. To do this, the government is trying to develop the Emirate into an attractive place to do business and to attract Foreign Direct Investment (FDI). Measures it has taken include recently implementing the new Commercial Companies Law providing high class infrastructure; and, ensuring that Abu Dhabi and Dubai are a safe place to live and work.

Manufacturing and industry are key sectors

The government is focusing on a number of key sectors, including health, energy, tourism and transport, as well as Industry and manufacturing. The largest factory in the Gulf recently opened in Al Ain (Arkan Building Materials’ cement factory). By mid-2014, a total of 220 factories had completed construction in Abu Dhabi. The industrial sector is currently growing at 10% per year. Through Abu Dhabi’s recent investment in state of the art infrastructure, such as specialised industrial zones (e.g.KIZAD and ZONESCORP) and transport links including the new Khalifa Port, Abu Dhabi International Airport’s Midfield Terminal and Etihad Rail; it is positioning the Emirate as an easy place to set up and do business, as well as a cost effective solution in terms of moving goods.

In June 2015, the Industrial Development Bureau of the Department of Economic Development (IDB) signed a Memorandum of Understanding (MoU) with Abu Dhabi Ports to establish a joint-programme that will help attract investment and further develop and enhance the fast-evolving industrial sector of Abu Dhabi.

Incentives for manufacturers

Furthermore, the government is actively encouraging manufacturing within the country via incentives.

Limited Liability Companies (LLCs) with an industrial production license benefit from the following incentives:

1) Exemption from Customs Duty upon the importation of raw materials and machinery for their manufacturing activities

2) Exemption from Customs Duty when their manufactured goods are imported into the GCC or any GAFTA (Greater Arab Free Trade Area Agreement) state

Free Zone companies with an industrial license to manufacture benefit from the following incentive:

1) Exemption from Customs Duty on the importation of raw materials and machinery for their manufacturing activities

However, it should be noted, they are not eligible for the exemption from Customs Duty when their manufactured goods are imported into the GCC or GAFTA states.

Jebel Ali Free Zone companies with a national industrial license benefit from the following incentives:

1) Exemption from Customs Duty upon the importation of raw materials and machinery for their manufacturing activities

2) Exemption from Customs Duty when their manufactured goods are imported into mainland Dubai.

However, it should be noted, they are not eligible for the exemption from Customs Duty when their manufactured goods are imported into the GCC or GAFTA states.

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Gateway provides concierge company formation and a unique selection of local sponsor packages to foreign companies expanding to the UAE. Gateway protects its clients’ businesses and their profits. It provides foreign companies with the peace of mind their business is secure, they have full operational control, their profits are protected and their local sponsor is responsive whenever they might need support doing business in a new market. We can also assist with ongoing compliance requirements, such as visas processing and trade license renewals. Furthermore, from a human capital perspective, we can help your organisation to ensure you have the right people in place, appropriately motivated and maximizing productivity - ideal for getting your multicultural teams to work. To get started with expanding your business into the UAE, email us: info@GatewayToUAE.com