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Top 10 Reasons To Start A Business In Abu Dhabi

Dec 15, 2022 | Entrepreneurship, Featured Posts

Why start a business in Abu Dhabi? Well, Abu Dhabi is known for its oil wealth, stunning skyline and luxurious hotels. But it’s also home to some of the world’s most dynamic and successful businesses, thanks to the city’s excellent strategic location and the UAE government’s unwavering support. From retailing, hospitality, and finance to engineering, healthcare, and technology – all industry sectors have a strong footprint in Abu Dhabi.

As an international business hub, Abu Dhabi offers excellent opportunities for entrepreneurs looking to launch their ventures. Today we will look at the top ten reasons you should start a business in Abu Dhabi.

An image of Abu Dhabi- a fantastic location to start a business.

Source: Unsplash

Strategic Location and Demography of Abu Dhabi And The UAE

The UAE is situated in the Middle East and has excellent transport links with Europe and Asia, making it an ideal location for business.

Easy Accessibility

Abu Dhabi enjoys easy access to air, sea and land transportation, allowing businesses to reach out to different markets quickly.

Abu Dhabi’s proximity to neighbouring countries makes it an excellent hub for international trading activities. You can reach out to half of the global population from Abu Dhabi or Dubai with an 8-hour flight.

Large Land Area and Growing Population

The Abu Dhabi Emirate is the largest in the UAE, with a population of over 1.5 million. The Emirates makes up almost 84% of the UAE’s total land area and 15% of the population. The city is home to many expats, making it an attractive place for business owners looking to expand their customer base.

Due to the availability of a vast land area, you can also find plenty of suitable locations for setting up your business. Also, it’s considerably more affordable to set up a large warehouse in Abu Dhabi compared to Dubai.

Excellent Infrastructure

The UAE government and the Abu Dhabi government have invested heavily in infrastructure, making it one of the most advanced countries in the world.

Network and Connectivity- An Important Factor For Those Wanting To Start A Business in Abu Dhabi

From physical infrastructure to digital and telecom networks, Abu Dhabi has a well-developed network that supports businesses of all sizes. The technology sector is proliferating with developments such as 5G connectivity, cloud computing and AI, offering plenty of opportunities for tech startups.

Quick and Efficient Container Handling

The Khalifa port, Abu Dhabi’s main port and trading gateway to the world, initiated the region’s first semi-automated container handling system almost a decade ago. Later in 2021, the port authority introduced AI-powered container handling capacities, making the Abu Terminal one of the world’s quickest and most efficient terminals.

Infrastructure Partnerships

The Abu Dhabi Investment Office, a government project to facilitate investment and infrastructure development in the Emirate, has partnered with foreign organisations and the private sector to develop Public-Private Partnership (PPP) projects. These projects help develop world-class healthcare, education and other infrastructure facilities for the Abu Dhabi population.

In addition, the Abu Dhabi government’s Mustaha projects aim to provide housing, electricity and other services for the city’s residents. The private sector can construct infrastructures on government-owned land and lease it to a third party for up to 50 years through a Mustaha agreement.

An image of suburban Abu Dhabi

Source: Unsplash

Generous Incentives And Governmental Support

The government also offers incentives for foreign companies setting up headquarters or offices in Abu Dhabi, helping them access these excellent resources quickly.

Support from the Government When you Start a Business in Abu Dhabi

The local and federal governments have also implemented numerous programs and initiatives to encourage foreign investment in the Abu Dhabi Emirate. This includes setting up free zones, providing tax incentives, creating special economic zones, offering visa exemptions and more.

Business Support Programs

Abu Dhabi is home to many government-owned companies supporting entrepreneurs setting up city businesses. These companies offer a wealth of resources, such as capital investments, access to technology and mentorship opportunities.

Special Incentive for Tech Businesses

The Abu Dhabi government and Mubadala Investment Company have undertaken the Hub71 Tech Incentive program to support tech businesses, communities and startups in the Emirates. If your tech startup qualifies for the program, you will get a fully subsidised tech business licence, office space, housing, and health insurance.

Digitisation of Services

The Abu Dhabi government invests heavily in digitisation and automation. As a result, you can set up a business in Abu Dhabi online with minimal paperwork. The city also has initiatives to encourage innovation, such as the Abu Dhabi Smart City Programme, which offers resources and support for tech businesses.

The one-stop TAMM service portal of the Abu Dhabi Department of Economic Development (ADDED) gives you access to government services from one centralised location.

Tax Benefits and Easy Ownership Policies

The UAE has ranked 16th in the Ease of Doing Business Index, thanks to the nation’s pro-business policies and regulations. Such policies include

Zero Taxation

The UAE government plans to implement a new corporate tax regime from January 2023, which keeps small businesses and startups out of the taxation bracket. Your business’s annual net profit of up to AED 375,000 will not be subject to taxation, which is a tremendous advantage for startups to expand their operations without worrying about taxes.

In addition, if you establish a free zone business in Abu Dhabi, you will benefit even more. The UAE government has decided to keep all the free zone businesses tax-free even in the new corporate tax regime.

Flexible Ownership

The UAE offers foreign investors full ownership of their companies in the free zones. As a business owner in Abu Dhabi, you can own 100% shares in your company without having to partner with a local sponsor or involve yourself in complex procedures for transferring ownership.

Profit Repatriation- A Big Plus When You Start Your Business In Abu Dhabi

The UAE government has liberalised its foreign exchange regulations, allowing 100% repatriation of profits and capital. Business owners from Abu Dhabi can transfer their earnings to any bank account outside the country without worrying about limitations or restrictions.

Abundant Resources When You Start A Business In Abu Dhabi

Abu Dhabi is one of the wealthiest cities in the world, with a GDP per capita higher than most developed countries. The city has abundant resources for businesses, such as energy and water supply. More than 90% of UAE’s natural gas and petroleum mining facilities are located in Abu Dhabi.

World’s Largest Solar Power Plants

Abu Dhabi is home to the world’s largest solar power plant, Noor Abu Dhabi. The plant has a capacity of 1,177 megawatts (MW) and can generate enough energy for over 200,000 homes. In addition, the Shams 1 plant located in Western Abu Dhabi is also the largest commercial solar power plant project in the Middle East. In total, Abu Dhabi’s total solar power capacity in 2022 is over 3.2 gigawatts. The Emirate offers one of the most affordable solar energy tariffs globally at only AED 4.97 fils per kilowatt hour.

Biodiversity- A Great Reason To Start A Business In Abu Dhabi

You will find more than 8,000 species of plants and animals in Abu Dhabi, with some native to the region. The emirate also presents a rich marine life, making it a great destination for businesses looking to capitalise on this natural resource. The UAE government has undertaken several projects to support aquaculture businesses and ventures in the region.

An image of a boat in Abu Dhabi

Source: Unsplash

Suitable to Many Business Types

Abu Dhabi’s strategic locations make it suitable for many business types. From hospitality and retail to healthcare, engineering and IT services – Abu Dhabi offers plenty of opportunities for entrepreneurs. The city is home to numerous industrial parks, commercial hubs, and free zones offering attractive incentives for businesses looking to set up in the region.

Excellent Customs Clearance Efficiency When You Start A Business in Abu Dhabi

The UAE government has an efficient and transparent customs system, allowing businesses to import and export goods without hassle. With the Abu Dhabi Customs’ online portal, you can track your shipments in real time and quickly get all the necessary documents for clearance.

You can also conveniently obtain an import code from Abu Dhabi customs with a nominal fee, which is similar to getting an import code in Dubai. The import code will help you save time and money while trading in the UAE.

Instant Licence from ADDED- Allows You To Start A Business In Abu Dhabi

The Abu Dhabi Department of Economic Development (ADDED) provides an instant licence to over 2,000 business types in the Abu Dhabi Emirate. The instant licence allows you to set up your business without the hassle and start trading immediately.

Growing Economy For Those Who Wish to Start A Business In Abu Dhabi

The UAE is one of the fastest-growing economies in the world, and Abu Dhabi is at its centre. The city boasts a GDP growth rate of 11.2% in the first half of 2022, according to Statistics Centre Abu Dhabi (SCAD), making it an ideal destination for businesses to invest and grow.

Some of the areas that substantially contributed to Abu Dhabi’s economic growth in the first half of 2022 include:

  • Manufacturing: Contributed 8.1% and grew by 10.2%
  • Construction: Contributed 7.7% and grew by 6.9%
  • Retail and wholesale trading: Contributed 5.9% and grew by 23.7%
  • Financial and insurance activities: Contributed 5.5% and grew by 9.1%

The economic sectors that grew most substantially during the period are:

  • Health and social work: 29.9%
  • Accommodation and food services: 29.3%
  • Professional, scientific and support services: 27.2%
  • Real estate: 19.1%
  • Utility services and management: 18%
  • Transportation and storage: 13.8%

Also, with an ever-increasing population of both locals as well as expats, there are plenty of potential customers and employees available in Abu Dhabi. This can be beneficial for small business owners looking to expand their customer base or find suitable personnel quickly.

Easy Business Registration

The Abu Dhabi government has made it easy for entrepreneurs to register their businesses. ADDED provides a hassle-free registration process and helpful resources to guide you through the setup procedure. The ADDED also assists in procuring licences and permits, which is an added benefit for those looking to establish their business quickly.

ADDED also introduced instant business licences in Abu Dhabi that allow you to register your business in just a few hours. This is especially helpful for entrepreneurs who want to launch their venture quickly and without hassle.

You can also obtain permission for certain activities from the relevant government entities and offices in a streamlined and straightforward process. You will find almost zero red tape thanks to the government’s focus on automation and fast service delivery, you will find almost zero red tape.

Availability of Supporting Resources

Abu Dhabi has all the necessary resources to help businesses succeed. From IT infrastructure, telecommunications and energy to banking facilities, legal advice and business guidance – you can find everything you need for your successful business setup in Abu Dhabi.

The city is also home to world-class universities such as Zayed University, which provides an excellent platform for research and development activities. The government of Abu Dhabi also offers grants and subsidies for small businesses looking to expand their operations or develop new products or services.

One of the most convincing reasons to start a business in Abu Dhabi is the availability of free zones. Setting up a business in Abu Dhabi Global Market (ADGM), Khalifa Industrial Zone, or similar free zones will benefit you through attractive incentives such as tax exemptions, 100% foreign business ownership and access to a wide range of resources in a convenient location.

A screenshot of ADGM- an important tool for those wanting to start a business in Abu Dhabi

Source: ADGM Website

Visa Options for Entrepreneurs, Employees and Family Members

Finally, Abu Dhabi offers foreign entrepreneurs a wide range of visa options. The UAE also grants visas for family members and employees, making it easier to relocate your business activity or find the right person you need.

For example, an Industry Rowad or industrial licence in Abu Dhabi will allow you to bring two professionals from outside of the UAE. You can even obtain a maid visa to get one domestic employee into the country.

Most visa programs in Abu Dhabi will let your dependents settle in the UAE, allowing them to work, study, and grow. You will also find some of the best health insurance in the UAE in Abu Dhabi that comprehensively covers your and your dependent family’s accidents and illnesses.

Wrap-Up: Start a Business in Abu Dhabi

Abu Dhabi is an excellent place to start a business. The city offers high-quality infrastructure, generous incentives and tax benefits, easy access to the rest of the world, abundant resources and a skilled labour force – all of which make Abu Dhabi one of the best places for entrepreneurs looking for new opportunities.

So why wait? Start your business in Abu Dhabi today! Confused about where to start? Virtuzone offers a reliable one-stop solution for setting up a business in Abu Dhabi. We can help you get your business up and running quickly. Contact Virtuzone now.

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