Khalifa Industrial Zone Abu Dhabi

KIZAD – The integrated trade, logistics and Industrial hub of Abu Dhabi

The article talks about KIZAD industrial and free zone located in Abu Dhabi, which includes the advantages and having a business in KIZAD, the legal compliances and other related matters. This article by Spectrum Auditing is useful for the people who are planning to open a company in UAE in selecting the best industrial and free zone in UAE.

What is KIZAD?

Khalifa Industrial Zone Abu Dhabi (“KIZAD”), a subsidiary of Abu Dhabi Ports, is the largest industrial and free trade zone in the MENA region and offers the most competitive business setup solutions and world-class infrastructure facilities in the UAE. Spread over 410 square kilometres, KIZAD is home to over 600 companies across industries such as Food Processing, Polymers, Metals, Automotive, Pharmaceuticals, Logistics, Oil & Gas, among others.

Setting up at KIZAD enables businesses to benefit from the strategic location, faster access to markets, low set up and operational costs, flexibility in scale of operations and efficient investor support services. Strategically located between Abu Dhabi and Dubai, the two most important economic centres of the region, KIZAD is ideally positioned to serve the key consumption markets in the GCC, Middle East and Africa.

What are the ADVANTAGES of choosing KIZAD?

Enabling Significant Cost Savings

Ample and reliable supply of utilities power, gas and water, at the most competitive rates in the UAE
No corporate and income taxes
Duty-free trade in the GCC free trade area for “MADE IN UAE” products
Prime location facilities at very competitive lease rates

Speed to Market and Proximity ADVANTAGE

Easy access to key markets through 2 global ports, 5 international airports, multi-lane highways and planned rail, connecting KIZAD with the rest of the UAE and GCC
Simplified and flexible company formation
KIZAD is the single interface for all approvals
Presence of supporting entities such as raw material suppliers, packaging and specialised logistics services within the zone

Flexibility in Scale of Operations

Option to operate for the local and regional/global markets through Free Zone zone and Domestic Economic Zone facilities
Flexibility in lease tenure, structuring etc.
Infrastructure to support a wide range of businesses, from startups to mega projects
Future-ready development with provisions for expansion and integration with new projects

Growing Community of Businesses, Clusters and Amenities

Multiple residential, social areas, leisure facilities within 10 minutes’ drive
Multiple on-site staff accommodation facilities are under various stages of planning and development
Clustered approach with shared amenities for better planning and leaner development for customers
Dedicated clusters for SMEs, Logistics and Business Parks

What are the various types of facilities available at KIZAD?

KIZAD offers both Free Zone and Domestic Industrial Zone facilities for investors, who can choose their facilities based on their business strategy and requirements.

Free Zone

The Free Zone jurisdiction allows 100% foreign ownership in companies, and it is suitable for wholesale distributors, re-exporters, warehousing activities, service providers and manufacturers targeting markets outside the MENA region.

100% foreign ownership in companies
0% customs duty
0% corporate, personal and sales tax
No restrictions on capital and profit repatriation
Designated Zone for VAT Exemption
No minimum capital requirements

Domestic Industrial Zone

Companies in the domestic industrial zone can enjoy direct access to the markets in the UAE and the GCC area. Goods produced in the domestic industrial zone can be certified “MADE IN UAE” by the relevant authorities and can avail duty-free status in the GCC region.

Joint venture with a UAE partner
0% corporate, personal and sales tax
0% customs duty for industrial raw materials and machinery
Easy repatriation of profits and capital
‘MADE IN UAE’ certificate for qualified products
Potential for duty-free trade in the GCC

Facilities in a gist

Key feature	Free Zone	Domestic industrial zone
OWNERSHIP	100% foreign ownership	Up to 100% foreign ownership in over 1,000 activities
TAX (CORPORATE)	100% tax free for the companies in KIZAD as long as the company is complying with the rules of the Free Zone authority and do not conduct any business with the entities in the mainland (based on the FAQs released by the Ministry of Finance in Jan 2022).	100% tax free for the companies in KIZAD as long as the company is complying with the rules of the Free Zone authority and do not conduct any business with the entities in the mainland (based on the FAQs released by the Ministry of Finance in Jan 2022).
TAX (INCOME & SALES)	100% tax free	100% tax free
VAT	No VAT	Standard VAT rate is applicable
BOOKS OF ACCOUNTS	Maintaining proper books of accounts is mandatory for any company registered in the UAE, including the entities in the mainland and the Free zone.	Maintaining proper books of accounts is mandatory for any company registered in the UAE, including the entities in the mainland and the Free zone.
SALES IN LOCAL MARKET	Through distributors and / or local agents	Direct
CUSTOMS DUTY	No customs duties within Free Zone	Standard customs duty for sales to local market (import) and GCC (first point of entry-import).
	Standard customs duty to be paid on deposit, for goods in transit: – Between points of entry (seaports/airports/borders) and Free Zones – Between Free Zones and point of exit (export).	No customs duty applicable for sales of locally manufactured goods in GCC and very low duty structure in GAFTA countries (for National Industrial Licence Holders)
	Standard customs duty for sales to local market (import) and GCC (first point of entry-import).	Customs duty exceptions on import of raw materials and machinery for manufacturing activities
	Local customs duties applicable for imports into other countries.	Local customs duties applicable for imports into other countries
CAPITAL & PROFIT REPATRIATION	100% Allowed	As per the contract between partners
LABOUR LAW	Free Zone rules and labour law	UAE labour laws

KIZAD LAND LEASE TARIFF

Standard Use Fee Per Annum (Land Plots) (AED / m2)

Standard Industrial Plots of all sizes in Free Zone 31

Standard Industrial Plots of all sizes in Domestic Zone 26

Standard Logistics Plots of all sizes in Free Zone 33

Standard Logistics Plots of all sizes in Domestic Zone 28

Open lay-down plots in KIZAD Area B 7.5

All prices subject to:

Common Area Maintenance Levy of AED 3/m2 per annum (adjusted annually)
Annual escalation and general terms and conditions of the land lease contract will apply
Further premium levy is applicable on strategic land allocations
Rates vary and may change. The above are standard prices as existed till the end of December 2021

	Registration Services	Fees (AED)
1	Registration Fees (LTD) *	0
2	Registration Fees (Branch) *	0
3	Conversion from branch to (LTD)	0
4	Amendment to Register	200
5	Change of Share Capital	0
6	Share Amendment – Per Instrument	3000
7	Board Resolution / Other Resolution- Notarization	200
8	Memorandum and Articles of Association- Notarization	200
9	Authenticity of Signature- Notarization	0
10	No Objection Certificate	0
11	Memorandum and Articles of Association – Amendment	200
12	Incumbency letter	2500
13	Company Information Search	0
14	Any other letter (Unspecified)	200
15	Certificate of Authorization	200
16	License Renewal (after 2 years) Industrial, Trading, Service	5000
17	License Renewal (after 2 years) General Trading	15000
18	License Cancellation	2500
19	Issue New Establishment Card	1000
20	Cancellation of Establishment Card	500
21	Initial Approval	450

What are the advantages KIZAD offers for key industries when they do business?

LOGISTICS

Trans-shipment hub with over 1,000 port-to-port connections
Port-side developments
- Development of new terminals by MSC and COSCO
- Increase in port capacity – from 2.5 million TEU to 9 million TEU in the next 5 years
Steady growth in the number of factories and distribution businesses
Perfectly located to cater to the domestic and regional markets

FOOD PROCESSING

Pollution-free operating environment
Reliable supply of clean water, power and gas
Efficient infrastructure for waste management
Advanced laboratory services for testing and certifications
Value chain activities such as printing, packaging and specialised logistics solutions in the zone

METALS

The most competitive utility rates in the UAE
Onsite availability of power, gas and water
Close to major anchor industries supplying raw materials
- Emirates Global Aluminium, Emirates Steel
Dedicated infrastructure for downstream metals processing activities
- High capacity power network
- Hot metal road enabling hot metal in liquid form to be transported from the supplier to the factory

AUTOMOTIVE

Regional mega-hub for CBU (completely built units) logistics
Presence of auto parts manufacturers supplying major global brands
Upcoming manufacturing projects for key products such as automotive tyres
Key raw materials suppliers in the industry value chain present in the park – Aluminium, Polymers

POLYMERS

Developed in strategic partnerships with key industry players such as ADNOC
Key raw materials suppliers within the park and in the region
- Mega distribution centre of Borouge present in KIZAD
- Easy access to raw materials from Saudi Arabia, Oman,
Kuwait and Bahrain
Polymer-centric logistics and infrastructure
- Permanent and semi-permanent warehouses
- Annual throughput exceeding 1.5 million tonnes
- Specialised logistics service providers within the park
Polymers packing plant
- Three fully automated “Fill, Form, Seal” (FFS) polymer packing lines
- One bulk bag filling line
- Overall packing capacity of more than 700,000 tonnes per year

Is it true that KIZAD offers a strategic and perfect location advantage for anyone operating inside the zone?

KIZAD is ideally positioned to serve all the major markets in the Middle East and Africa. KIZAD offers true multi-modal access through 5 international airports in 2 hours driving radius, 2 global ports, express highways and upcoming rail hubs within the park.

SEA – KIZAD offers excellent access by sea through Khalifa Port – the ultra-modern deep water seaport – enabling easy bulk import and export. It has 2 Global Ports and 1,000+ Port-to-Port Connections.

ROAD – Multi-lane express highways connecting KIZAD to major commercial hubs in the UAE and the GCC region. There are 3 Multi-lane express highways and 4 Routes with dedicated truck roads.

AIR – KIZAD location provides excellent access to international airports in the UAE. There are 5 International airports with 14,000 Million ton-km air freight capacity.

FUTURE RAIL – First Port in the UAE to link to the new Etihad Rail Network, currently under construction. The network is likely to have 605 km rail network with 50 Million tones annual capacity.

Some more salient features of KIZAD with respect to INFRASTRUCTURE AND BUSINESS ECO SYSTEM

Industry Innovations Driving Operational Efficiency
Reliable Utilities Infrastructure
Efficient Infrastructure for Waste Management
Internal Transportation ROAD Network
Advanced Laboratory Services for Testing and Certifications
Essential Products and Services in the Value Chain

SERVICED LAND PLOTS – Land for Development on Long-term Lease

KIZAD can accommodate industries of any scale due to the meticulous master plan of the industrial park. Because KIZAD comprises multiple industrial clusters, we allocate land by grouping certain industries and service providers based on how best they can benefit one another. Value is created by leveraging anchor tenants and facilitating synergies and operational efficiencies; investors can utilise products produced by another within the zone. This gathering of collective expertise also creates a business environment that fosters research, growth and the development of skills and talents.

Pre-Built Facilities – Modular Warehouses and Light Industrial Units – On Lease or Sale

Pre-built facilities in KIZAD help minimises Capex costs for setting up the business. KIZAD offers high quality, modular, ready to move warehouse units and light industrial units for storage, distribution and third-party logistics services as well as light industrial activities. These pre-built units enjoy true multimodal access through the port, road, and upcoming rail – all available on-site – and five major international airports within a two-hour driving distance.

The pre-built units are equipped with easy access loading docks, raised docked floor levels and clear open space for the eaves. The design also includes the shell and core scheme for setting up a mezzanine office.

CUSTOMER FOCUSED SPECIFICATIONS

Pre-built units in KIZAD Logistics Park are built to the following specifications:

Choice of Free Zone or Domestic Economic Zone facilities
7-metre clear height to eaves for warehouse units
6 metre clear height to eaves for light industrial units
3-metre raised floor level
Dedicated loading area for each unit
Docked roller shutter loading doors
Loading ramp with roller shutter door
Ample power for air conditioning in all units and cold storage in selected units
Dedicated parking spaces for trucks and cars
Mezzanine office (shell and core), kitchenette and toilet facilities
Integrated fire alarm and sprinkler systems

BUILD-TO-SUIT FACILITIES

Every business has different requirements for space – from manufacturing to logistics, warehousing and office use. Investors can enjoy the benefits of a one-stop solution with our Build-to-Suit (BTS) space, where KIZAD oversees the entire process for the investors – including design, construction and project management. With flexible options for lease or buy, you can be assured of a space that perfectly fits your needs.

FREE ZONE COMPANY FORMATION SOLUTIONS

Offering cost-effective workspaces, offices and licensing options KIZAD Entrepreneurship and Incubation Centre is designed to benefit SMEs, startups, entrepreneurs and other small businesses.

Free Zone business licence and facilities

100% foreign ownership
100% repatriation of capital and profits
No corporate and income taxes
No VAT within the Free Zone
Ideal for startups and SMEs
Cost-efficient solutions to test the market
Opportunities to scale up to permanent facilities
Company setup in 24 hours
Quick and easy approvals
No security deposits on startup packages
No deposits for visa
Shared workstations or dedicated offices
Free internet & Wi-Fi
One-stop-shop services
Multiple packages to fit the business requirements

Corporate tax applicability to the companies in Khalifa Industrial Zone Abu Dhabi:

Corporate tax law is going to be applicable for all the companies registered in UAE including the free zones in UAE. The UAE Corporate tax is going to be effective for the financial year beginning on or after 1 June 2023 for the businesses in UAE. Corporate tax will be levied at zero percent on the taxable income (adjusted net profit) of the businesses in the free zones as long as they comply with all the regulations of the respective free zone and do not do any business with the mainland companies, otherwise there is a possibility of levying 9% corporate tax on the taxable income (adjusted net profit) in excess of AED 375,000. Hence companies in the Free Zones need to make sure that they are complying with all the regulations of the free zone and do not do any business with the mainland entities to enjoy the benefit of zero percentage of UAE corporate tax.

{NOTE: Kindly note that the authenticity of this article is limited to the day of publishing this blog. As policies and rules pertaining to each free zone keeps changing from time to time based on the necessity of the respective authority, it is hereby advised you to check the website of the concerned free zone directly to get the latest update on the same. We do not assume any liability if you have taken any decision based on the information provided in the article. We have ensured that the presented information to the visitor is legible to the maximum extent possible so that all the information is available in one page, at one go. Thank you.}

Why Spectrum Auditing?

Spectrum Auditing is an expert firm in the Company Formation and Company Liquidation process. Our passion and heart lie in serving the clients and we aim at the utmost client’s satisfaction. We are registered Auditors under the Ministry of Economy UAE and also registered Tax Agent from Federal Tax Agency UAE providing dedicated Audit, Accounting, Tax services and various Business Advisory Services complying regulatory requirements.

Reach us to have a frills free life in your journey in Dubai, UAE. We at Spectrum will assist you in taking care of all the legal procedures involved in the registration and de-registration of your company in Khalifa Industrial Zone Abu Dhabi. Call us today for any kind of assistance at +971 4 2699329 or email us at [email protected] to get all your queries addressed. Spectrum is your partner in your success.