Rental Hike Freeze: A Big Push for Company Formation in KIZAD & ICAD
The prospect of company formation in Abu Dhabi looks greener with the authorities offering a set of stimulus to ward off the COVID-induced economic pangs. The latest in the series of economic relief came in the form of ‘rent escalation freeze’ announced by Abu Dhabi Ports. The new economic stimulus proves to be a big relief for more than 1,400 companies operating in Khalifa Industrial Zone Abu Dhabi (KIZAD) and Industrial City of Abu Dhabi (ICAD). KIZAD is a subsidiary of Abu Dhabi Ports, and ICAD is regulated by ZonesCorp, which is also controlled by Abu Dhabi Ports.
In the background of the new announcement, we analyse how the rental freeze and other existing business support packages will attract investors into taking up business set up in the UAE. Read on for an in-depth analysis of the various support schemes available for companies in KIZAD & ICAD.
Rental Hike Freeze Scheme by Abu Dhabi Ports
Abu Dhabi Ports has announced that there won’t be any hike on the rent for the companies operating in KIZAD and Zones Corp for the whole years of 2021. The freeze on rent escalation is aimed at giving a competitive edge for the companies amidst the uncertainties precipitated by COVID-19 pandemic. Abu Dhabi Ports’ customers in both Industrial and Economic Zones won’t be subjected to any rental hike, which is regarded as a positive announcement by the investor community. Consult with business setup consultants in the UAE to get a new company incorporated in KIZAD or Zones Corp.
Exemption from Musataha Registration in ICAD
The customers of ZonesCorp ( companies operating in ICAD) are exempted from Musataha contract registration. Musataha is a ‘right in rem’ that confers upon the owner the right to construct a building on the land of another.
Exemptions were also extended to utility payments based on actual consumption & application and documentation fees. ZonesCorp is also providing a 25% price reduction to new investors opting for company formation in ICAD and other industrial zones under the authority. Foreign investors can discuss with the best business setup consultants in the UAE to register their companies with ZonesCorp quickly.
Savings on New Registrations & Renewals in KIZAD
Existing and new licensees in KIZAD are entitled to business setup packages that provide up to 36 per cent savings as a relief for Freezone businesses, and also as a support for SMEs challenged by the global economic slowdown. The investors get savings of up to 25 per cent on new registrations and renewals, a waiver on the security deposit.
The relief package is designed to be delivered in three tiers, which are given below:
- Around 25% savings on renewal or new registrations of three-years
- Nearly 20% savings for two-year registrations and renewals
- Approximately 15% savings for one-year registrations
Across all packages, new and existing customers will also benefit from having their security deposit waived. The business setup packages by KIZAD are a boon for foreign investors and is expected to boost the profitability of company formation in the UAE.
Freeze on Late Payment Fines
Before the rental hike freeze, Abu Dhabi Ports had also implemented measures including a freeze on late payment penalties and exemption from Tawheeq fees. These measures apply to the existing customers of KIZAD and other subsidiaries of Abu Dhabi Ports, but the package also includes relief measures for new investors initiating the process of company formation in KIZAD or ICAD. For instance, new investors get their application fee waived and a 25% reduction om land lease for the first year. The new investors are also exempt from Tawfeeq fees and get the benefit of relinquishing of land fixing fees.
The rise in New Investments Post the Stimulus Measures
The timely stimulus measures by Abu Dhabi Ports has yielded positive results as both ZonesCorp and KIZAD attracted new investments in 2020 despite the COVID shocks. ZonesCorp successfully attracted investments covering over 869,608 sqm of leased land. The free zone authority has also deployed more than 900 manufacturing and commercial facilities for its various industrial zones including ICAD. Furthermore, the free zone’s investment portfolio in 2020 included 33 new projects encompassing technology and data centres, plastics, oil and gas services, storage and warehouses, automotive, wood industries, food, and metal.
To attract new investors, KIZAD broke ground on multiple new developments including Middle East’s largest truck plaza, which is roughly equal in size to 12 soccer fields. Furthermore, there was a rise in new investors, as evidenced by the surge in demand for pre-built facilities in KIZAD. To meet the demand, KIZAD started developing new warehouse products. In recognition of these efforts, KIZAD was awarded three of fDi Magazine’s Middle East’s fDi Global Free Zones of the Year 2020 awards including the coveted Middle East – Large Tenants category.
A Helping Hand from Business Setup Consultants in the UAE
COVID-19 has disrupted the business climate in almost all countries across the world, but the economic stimulus packages from the government and free zone authorities have boosted the viability of company formation in the UAE. This is the right time for foreign investors who have chosen Abu Dhabi to set up a business as Abu Dhabi Ports has announced a rental hike freeze for the whole of 2021. This and a host of already existing packages have boosted the appeal of business setup in KIZAD and the industrial zones under ZonesCorp such as ICAD.
However, setting up a business in Abu Dhabi free zones involves several steps for which the foreigners require the assistance of the best business setup consultants in the UAE, such as Jitendra Business Consultants (JBC). Foreign investors can initiate a hassle-free company formation in the UAE by consulting with JBC’s highly qualified business setup specialists. JBC assists the investors in selecting the right free zones, drafting the documents, obtaining the visas and advice on opening a corporate bank account etc.