Abu Dhabi Free Zones

Abu Dhabi hosts several specialized free zones catering to different sectors: (1) Abu Dhabi Global Market (ADGM) - An international financial center located on Al Maryah Island, focusing on banking, wealth management, asset management, and fintech; (2) Masdar City Free Zone - A sustainability-focused hub for clean technology, renewable energy, and green businesses; (3) KIZAD (Khalifa Industrial Zone) - Now part of KEZAD Group, focuses on manufacturing, logistics, and trade with port integration; (4) Twofour54 - A media and entertainment free zone that supports content creation, broadcasting, gaming, and digital media. Each free zone offers specific infrastructure, ecosystem benefits, and regulatory frameworks designed for their target industries.

Abu Dhabi free zones offer several compelling advantages: (1) 100% foreign ownership with no local sponsor or service agent requirements; (2) Tax benefits including 0% corporate tax on qualifying activities, 0% personal income tax, and no withholding taxes; (3) 100% repatriation of capital and profits with no currency restrictions; (4) Streamlined incorporation processes with fast-track licensing; (5) Specialized infrastructure tailored to industry needs; (6) Strategic location advantages with Abu Dhabi's connectivity to global markets; (7) Industry-specific incentives such as ADGM's financial regulatory framework, Masdar's sustainability focus, KIZAD's port integration, and Twofour54's production rebates and facilities. Each free zone also offers specific additional benefits aligned with their target sectors.

Each Abu Dhabi free zone offers specialized license types: ADGM offers Financial Services Licenses (for regulated financial activities), Non-Financial Services Licenses (for professional service providers), Commercial Licenses (for trading businesses), and Tech Start-up Licenses. Masdar City provides Industrial Licenses, Commercial Licenses, Professional Services Licenses, and Freelance Permits for individual practitioners. KIZAD/KEZAD features Trading/General Trading Licenses, Industrial Licenses (for manufacturing), Logistics Licenses, and Service Licenses. Twofour54 issues Media Production Licenses, Creative Industry Licenses, Gaming Licenses, Service Licenses for supporting businesses, and Freelancer Permits for independent creative professionals. Each license type has specific permitted activities, requirements, and benefits aligned with the free zone's focus.

Abu Dhabi free zones offer diverse facility options: ADGM provides Grade A office spaces, flexible workspaces, and executive suites in prestigious buildings on Al Maryah Island. Masdar City offers sustainable office buildings, research facilities, co-working spaces, and land for custom development with smart city infrastructure. KIZAD/KEZAD features industrial plots, pre-built warehouses, logistics facilities, office spaces, and business centers with proximity to Khalifa Port. Twofour54 provides office spaces at the Yas Creative Hub, state-of-the-art production studios, post-production facilities, collaborative workspaces, and specialized media infrastructure. Most free zones also offer virtual office options and flexi-desk arrangements for businesses not requiring physical presence. Leasing terms typically range from 1 to 25 years depending on the free zone and facility type.

The company formation process in Abu Dhabi free zones typically follows these steps: (1) Select the appropriate free zone based on your business activities and requirements; (2) Choose the license type and legal structure (such as FZ-LLC, Branch, or Representative Office); (3) Submit initial application with business plan and required documentation; (4) Obtain initial approval from the free zone authority; (5) Lease physical space or virtual office according to your needs; (6) Complete registration and licensing, paying associated fees; (7) Open corporate bank account with a UAE financial institution; (8) Apply for visas for shareholders, directors, and employees. Each free zone may have specific additional requirements or processes based on their regulatory framework. Working with a specialized consultancy like Evolve can streamline this process and ensure compliance with all requirements.

Visa allocation in Abu Dhabi free zones varies by zone and package: ADGM typically allows 3-6 visas with basic packages, with additional allocations based on office space (approximately 1 visa per 9-10 sqm). Masdar City offers 2-4 visas with standard packages, with more available based on physical space and business requirements. KIZAD/KEZAD provides visa quotas starting from 1 visa for basic workstation packages, with industrial facilities receiving larger allocations based on space and activity type. Twofour54 offers visa allocations based on license type and facility size, with media production companies typically receiving higher quotas to accommodate production teams. All free zones issue both Employment Visas and Residency Visas, typically valid for 2-3 years with renewal options. Family sponsorship visas are available for shareholders and employees once they obtain their own residency.

The standard documentation required for company formation in Abu Dhabi free zones includes: (1) Passport copies and CV/resume of all shareholders and directors; (2) Completed application forms specific to the chosen free zone; (3) Business plan outlining activities, market strategy, and financial projections (especially important for ADGM and specialized licenses); (4) Corporate documents for corporate shareholders (such as Certificate of Incorporation, Articles of Association, Board Resolution); (5) Bank reference letters or proof of financial standing for shareholders; (6) No Objection Certificate (NOC) from current sponsor (for UAE residents, though some free zones may waive this); (7) Specimen signatures of authorized signatories; (8) Lease agreement for physical premises if applicable. Additional industry-specific documentation may be required based on the license type and activities. ADGM may require more extensive documentation for regulated financial activities, while Twofour54 may request portfolio samples for creative businesses.

Setup costs in Abu Dhabi free zones vary by zone and business type: ADGM requires a registration fee (from USD 8,000), annual license fees from USD 10,000 for non-financial firms to USD 40,000 for financial services, and additional fees for regulated activities. Masdar City offers more affordable packages starting from AED 25,000, including license and flexi-desk. KIZAD/KEZAD provides competitive rates with workstation packages from AED 11,000 and license fees from AED 15,000-20,000. Twofour54 is known for its cost-effectiveness with zero license and registration fees for the first two years under some packages. Additional costs across all zones include visa processing (AED 3,000-5,000 per visa), office space (varying by size and location), and capital requirements (where applicable—ADGM may require up to USD 50,000 for certain activities). Many Abu Dhabi free zones offer special startup packages and incentives to attract new businesses.

Under the UAE's corporate tax regime, qualifying free zone persons can benefit from a 0% corporate tax rate on qualifying income and a 9% rate on non-qualifying income. To qualify for these benefits, companies must: (1) Maintain adequate substance in the UAE; (2) Comply with all regulatory requirements of their free zone; (3) Submit a corporate tax return annually; (4) Meet specific conditions related to their activities and transactions. Each Abu Dhabi free zone offers distinct advantages within this framework: ADGM has comprehensive tax benefits for financial services; Masdar City qualifies sustainable businesses for tax incentives; KIZAD/KEZAD provides manufacturing and logistics tax benefits; and Twofour54 offers media production tax advantages. It's important to note that transactions with mainland UAE companies may be subject to different treatment, and the specific tax benefits can vary based on the exact nature of business activities and the particular free zone requirements.

Abu Dhabi free zone companies have varied capabilities for mainland business: ADGM and KIZAD companies can engage with mainland businesses and government entities directly for most activities, though retail operations require additional permissions. KIZAD offers a unique dual licensing option where businesses can obtain both free zone and mainland licenses simultaneously, allowing full mainland market access while maintaining free zone benefits. Masdar City companies can provide services to mainland clients in most professional categories without additional licensing, particularly for sustainability consulting and green technology services. Twofour54 media companies can service mainland clients and work on mainland locations with temporary permits, though permanent retail or public-facing operations require additional licensing. For all free zones, establishing a branch office in the mainland remains an option for full market access, though this typically requires a local service agent and additional licensing.