Abu Dhabi Airport Free Zone (ADAC)
The Abu Dhabi Airport Free Zone is a comprehensive business park being developed by SkyCity, a subsidiary of Abu Dhabi Airports Company (ADAC), on an area of over 12 square km. near Abu Dhabi International Airport.
Abu Dhabi Airport Free Zone will accelerate Abu Dhabi’s economic diversification by offering numerous benefits for investors such as tax exemptions, 100 per cent foreign company ownership, repatriation of capital and profits and access to airport and airport services.
With its investment incentives and strategic geographical location within Abu Dhabi International Airport premises, the Airport Free Zone has become a flourishing business centre that attracts and promotes private sector investments.
The benefits and facilities of starting a business in Abu Dhabi Airport Free Zone:
- 100% Corporate tax exemption
- 100% Import and export exemption
- 100% Personal income tax exemption
- 100% Foreign company ownership
- 100% Repatriation of capital and profits
- One-stop-shop administration services
- Fast and efficient cargo clearance services
- International freight forwarders and logistics services
- Online customer service
- Land with easy access to the airport apron
- On-site customs inspection
- 24 hours access to the facility
Infrastructure benefits inside Abu Dhabi Free Zone:
- Aerospace and Aviation
- Maintenance, Repair and Overhaul (MRO)
- Airport Services
- Airline Services
- Aircraft Interiors
- Cargo Freight and Logistic
- Technology and ICT
- Warehousing and Distribution
- Marketing and Events
- Regional Headquarters
- Knowledge and Development
Value Added Tax (VAT):
Value Added Tax (VAT) has been introduced across the UAE on 1 January 2018 at a standard rate of 5%.
Who should register for VAT?
A business whether situated in designated zone or non-designated zone or outside free zone should register for VAT if the taxable supplies and imports exceed the mandatory registration threshold of AED 375,000 within preceding 12 months or it is anticipated that the total value of taxable supplies exceeds AED 375,000 in the next thirty 30 days. Upon registration, a tax registration number (TRN) would be issued to business by the Federal Tax Authority.
What is a designated zone?
A Designated zone is a specified fenced geographical area having security measures and customs controls in place to monitor entry and exit of individuals and the movement of goods to and from the area. Following free zones are declared as designated zones.
a. Free Trade Zone of Khalifa Port
b. Abu Dhabi Airport Free Zone
c. Khalifa Industrial Zone
d. Jebel Ali Free Zone (North-South)
e. Dubai Cars and Automative Zone (DUCAMZ)
f. Dubai Textile City
g. Free Zone Area in Al Quoz
h. Free Zone Area in Al Qusais
i. Dubai Aviation City
j. Dubai Airport Free Zone
k. Hamriyah Free Zone
l. Sharjah Airport International Free Zone
m. Ajman Free Zone
n. Umm Al Quwain Free Trade Zone in Ahmed Bin Rashid Port
o. Umm Al Quwain Free Trade Zone on Sheikh Mohammed Bin Zayed Road
p. RAK Free Trade Zone
q. RAK Maritime City Free Zone
r. RAK Airport Free Zone
s. Fujairah Free Zone
t. FOIZ (Fujairah Oil Industry Zone)
What is a non-designated zone?
Any free zone which is not declared as designated zone is a non-designated zone. In other words a non – designated zone is any geographical area within UAE which does not have any security measures and custom controls in place to monitor entry and exit of goods and individuals. Eg. DMCC, Dubai Media city, DIFC and Dubai Internet city.
What transactions are subject to VAT within Designated zones?
a) Goods transferred between designated zones shall not be subject to VAT. However goods supplied by an entity in the designated zone to entities outside the designated zone are subject to 5% VAT.
b) Services provided by an entity to other entities inside the designated zone or outside the designated
zone are subject to 5% VAT.
c) Professional fees for services are subject to VAT @ 5%.
What government/free zone fees (License/Visa/rent) are subject to VAT?
In case of designated zones the trade license fees, visa fees, lease rentals will not be subject to VAT. And in case of non-designated zones the trade license fees and visa fees are not subject to vat however rent is subject to 5% VAT.