Company Formation in Abu Dhabi Airport Business City
1. What law established this free zone?
The following laws are the primary piece of legislation governing the Abu Dhabi Airport Business City (ADAB):
- Abu Dhabi Executive Council Resolution Number 61 of 2010 gave Sky City the authority to grant free zone status for the properties possessed by the Abu Dhabi Airports Company;
- Abu Dhabi Executive Council Resolution Number 62 of 2010 considering Al Ain International Airport as a Free Zone Area;
- Abu Dhabi Executive Council Resolution Number 63 of 2010 considering Al Butain Airport as Free zone area.
2. What are the principal internal regulations governing this free zone?
The primary internal regulation is governing this free zone in Abu Dhabi Airport Free Zone Company Registration Regulation (the Regulation). The provisions of this Regulation cover matters which is not in the UAE Federal Law Number 2 of 2015 regarding Commercial Companies Law (the CCL). On the other hand, issues not included in the Regulation are handled by the CCL.
3. Does this free zone have any reciprocal arrangements with other free zones? If so, what is their impact?
The free zone is relatively a new free zone, and at present, it does not have any reciprocal arrangements with other free zones.
4. What must critical areas of UAE and Emirate Legislation a business operating in this free zone still comply with? What are the most significant examples of how this effects operation?
The critical areas of UAE Legislation businesses operating in this free zone must comply with are:
- Federal Law Number 2 of 2015 for Commercial Companies (e.g., banks should be within the country);
- Federal Law Number 8 of 1980 regarding the regulation of labor relations and its amendments;
- Federal Law Number 4 of 2002 regarding the criminalization of money laundering (e.g., the disclosure of currencies, penalties for money laundering).
Importantly, the areas where the internal rules and regulations of the free zone are not applicable or are not sufficient the UAE laws will apply to govern the dispute.
5. What essential UAE and Emirate onshore agencies do businesses operating in this free zone need to register with or be aware of?
The essential UAE and Emirate onshore agencies a business would need to register with will depend upon the activity undertaken by the company. Some general coastal organizations under which the company must disclose themselves are as follows:
- Abu Dhabi Airports Company;
- Abu Dhabi Municipality;
- UAE General Directorate of Resident and Foreign Affairs;
- Department of Municipal Affairs;
- Public Notaries;
- Other Governmental Departments.
6. How does a company incorporate in this free zone?
The foreign investor looking to establish a company in this free zone have to follow three simple step procedures as below:
Step 1: Submission of Documents
Passport Copy of the Manager
Passport-sized photo of the Manager
No Objection Letter from the Current Sponsor (in cases where the applicant is a resident of the UAE)
Step 2: Submission of Fees
The company should complete the payments such as registration Fees, Licensing Fees
Documents concerning company’s formation, ownership and management must be provided
Step 3: The Final Stage
The company should sign the lease agreement;
Licensing and Visa processes can begin.
7. What advantages can companies expect from setting up in the free zone?
ADAB, like other free zones, allows hundred (100) percent foreign company ownership and hundred (100) percent repatriation of capital and profits. The free zone also provides a hundred (100) percent exemption for corporate tax, import and export tax, and personal income tax. Also, the ADAB offers the following advantages:
- Unified administrative services
- Cargo clearance service
- Online customer service
- Proximity to the Airport
- On-site customs inspection
- International freight forwarders and logistics services
8. What are the business activities companies established in this free zone allowed to engage in?
Companies incorporated in ADAB are authorized to do following activities:
- Aerospace and Aviation
- Maintenance, Repair, and Overhaul (MRO)
- Airport Services
- Airline Services
- Aircraft Interiors
- Cargo Freight and Logistics
- Technology and ICT
- Warehousing and Distribution
- Marketing and Events
- Regional Headquarters
- Knowledge and Development
There is an expectation that businesses set themselves up in this free zone will be operating in an activity relating to the business of aviation.
9. What types of businesses are allowed to operate in this free zone?
As mentioned above companies can set up trade, industrial, aviation, consultancy, transportation businesses.
10. What inheritance laws apply in this free zone?
As for all areas of law that are not in the ADAB’s regulations, the general rules of the UAE are applicable (Islamic Sharia Law). A non-Muslim expatriate can request that the rules of their home country apply, as per the Personal Affairs Law Number 28 of 2005.
11. What taxation applies?
The Abu Dhabi Airport Free Zone allows for 100% foreign ownership, free of all types of taxes (including corporate, import and export, and personal)
12. What accounting and auditing rules do businesses operating in this free zone need to adhere to?
Businesses operating in this free zone must keep accounting records, and they must submit auditing reports at least once a year as per the provisions of Part 11 of the Abu Dhabi Airport Freezone Companies Registration regulation.
13. Where do businesses operating in this free zone locate their bank accounts?
Businesses operating in this free zone must select a bank in the Emirate in which they are running to open their bank accounts, as per the provisions set out in the Commercial Companies Law.
14. Are there any specific rules governing when the movable property is removed from the free zone area or transferred into the free zone area from another jurisdiction?
Businesses set up in the ADAB must limit their activities to within the free zone that this they can only operate within the territory of the open area and not in the UAE mainland. However, to work outside the free zone, they must appoint a local agent or distributor to distribute their products in the region.
15. Are any specific licenses required to operate as one particular type of company in this free zone?
In ADAB the companies can obtain the following types of licenses:
- Trading Licenses
- Light Industrial Licenses
- Service Licenses
- National Industrial Licenses
Also, importantly under the licenses mentioned above, the companies can form the following types of businesses:
- Freezone Limited Liability Company (Corporate)
- Freezone Limited Liability Company (Natural)
- Branch of local or foreign companies.
16. Is there any specific on-going regulation or monitoring of businesses operating as particular types of company in this free zone?
As per Part 15 of the Abu Dhabi Airport Free Zone Companies Registration Regulation, the free zone authority may appoint an inspector to investigate a company’s business dynamics. The company’s directors must produce records at an investigator’ request.
17. How are disputes settled in this free zone?
Within this free zone, disputes are settled through the traditional UAE courts, unless another platform for the settlement of disputes has been agreed on in the contact. If any party or a company files a case against a company set up in ADAB, it will be directly filed in the courts of the Abu Dhabi such as Court of First Instance or Court of Appeal.
18. How are disputes between onshore companies and companies in this free zone settled?
Unless another platform for the settlement of disputes has been agreed on in the contract, the parties should file such cases with the courts of the Emirate of Abu Dhabi.
19. What are the primary rights and duties of an employer and employee working in this free zone?
The provisions of Federal Law Number 8 of 1980 and its amendments (the UAE Labour Law) apply to employers and employees in this free zone such as:
Article 91: Employer must provide the employee with protective equipment, clothing, instructions on all other means of protection to protect him from hazards of injuries, dangers of fire and vocational diseases
Article 92: Employer must display at an important point detailed instructions, in Arabic and in a language understood by employees, concerning methods to prevent fire and protect employees from dangers.
Article 93: Employer must provide every 100 employees with one medical aid box.
Article 94, 96: Employer must provide proper cleanliness, ventilation, adequate illumination, potable water and toilets, clean atmosphere and precautionary measures against fire and electric current.
Article 95: Employer must appoint one physician to do full medical checkups at least once every six months for employees exposed to infection risk. The employer must record the results.
Article 96: Employer must provide employees with means of medical care.
Section 97-98: Employer (or his representative) must regularly inform employees of dangers related to their profession and provide written preventative measures.
Section 99: Employer must forbid alcoholic drinks and intoxicated persons in the workplace.
20. How are the disputes between employers and employees working in this free zone settled?
Federal Law Number 8 of 1980 concerning the Labour Law (the Labour Law) is the primary piece of legislation which governs the disputes between the employer and employee. The Labour Law states that either party can apply with Ministry of Labour Abu Dhabi if they have an employment dispute. However, if they fail to settle the matter in the Ministry, the case will be transferred to the Labour Court.
21. What entry qualifications and permits are required for staff working in this free zone and how are employees registered with the authorities?
Qualifications will depend on the employee’s position and their company’s license. An employee requires a visa/entry permit for which the company should submit the personal sponsorship agreement. After that, the company should obtain the residence permit for the employee; this requires getting an Emirates ID card and the performance of a medical check-up.
22. What are the primary attributes of a property lease in this free zone and what are the key restrictions when leasing a property?
The primary attributes of the property leasing in ADAB are as follows:
- Availability of land plots for long-term contracts
- Availability of warehouse facilities (360 m2 to 2880 m2)
- Availability of ready offices and workstations.
It is important to note that a company should complete its registration to lease a property in ADAB.
23. Is it possible to apply for a building permit in this free zone? How is this done and what steps are required?
It is possible to apply for a building permit in this free zone, namely by making an application to the Abu Dhabi Municipality. The following documents must be submitted:
- Approved site plan
- Urban planning council approval
- Commissioned letter signed by the owner
- Liability free certificate
24. What environmental requirements must construction companies building in this free zone consider, e.g. form of building, landscaping or building height?
The company having registration in ADAB should comply with standards set out by the Abu Dhabi Environment, Health, and Safety Management System Policy, and the Abu Dhabi International Building Code.
25. What are the regulations governing the use of utilities in this free zone?
The use of utilities is determined based on actual usage in this free zone.
26. Is it possible for hotels and retail establishments to operate in this free zone - how do they establish themselves?
It is possible for hotels to operate in this free zone. They establish themselves the same way other businesses would in ADAB.