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Abu Dhabi is the political capital of UAE and counted as one of the beautiful cities in the world. It possesses96% of the total oil reserve of the country. The Emirate offers multiple investment opportunities involving almost all economic sectors; particularly those import substituting projects and those export-oriented projects.
Abu Dhabi offers attractive investment incentives for investors from any part of the world. Its oil and gas sector provides a high competitive potential mainly for chemical and petrochemical industries and products. The first commercial quantities of oil were found in 1958. Exports began four years later. Ongoing exploration, both on and off shore, has so far identified one tenth of the world’s crude reserves, enough, even at the present rate of production of over 2 million barrels a day, to last another one hundred and fifty years at least. Finding oil was the first step. Before it could reach the tanker ships there had to be massive construction of rigs, pipes, tanks and terminals, which brought a surge of industry and investment to Abu Dhabi and it is still happening.
In 1971, the government of Abu Dhabi, in common with other major oil producers in the Middle East, negotiated new concessions with its foreign partners securing the controlling interest in its precious oil resources. Gas reserves belong wholly to the government, The Abu Dhabi National Oil Company (ADNOC) was established to administer the industry. ADNOC is usually the first port of call for those wanting to do business in Abu Dhabi. Current expansion and development of the oil and gas industry, which ADNOC administers, translates into projects, mostly for heavy industry, worth many millions of dollars
General Procedure for Acquiring Licenses
The Abu Dhabi Chamber of Commerce & Industry and Department of Planning & Economy approve the required trade name and the Abu Dhabi Municipality Licensing Committee and Department of Planning & Economy review applications for licenses. The relevant competent authority is then involved for the approval of documents and the Chamber issues the membership certificate on approval from the authority. The Municipality and Department of Planning & Economy license is finally acquired after all requirements to rules and regulations as applied by the Municipality and Department of Planning & Economy have been met. The Ministry of Economy & Planning is also involved if the applicant is a commercial company.
Further, the Abu Dhabi Government issued the local law No. 5 of 1998 concerning the procedures of issuing the licenses in the Emirate. Accordingly, licenses issued by respective concerned authority shall be categorized as:
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1. Agricultural (Fisheries & Livestock) License
2. Industrial License
3. Commercial License
4. Professional License
5. Vocational License.
Industrial Sector of Abu Dhabi
Specialized Economic Zones
The government of Abu Dhabi recognizes the importance of the industrial sector and has always believed it to be the pioneering sector of economic development. The Industrial zones in different part of the Emirate come under the supervision of the Higher Corporation for Specialized Economic Zones (HCSEZ). HCSEZ is charged with creating a suitable environment for industries being set up in Mussafah Industrial City, Al Ruwais Industrial Area and the Al Ain Industrial Area.
Higher Corporation for specialized Economic Zones
The mission of the Higher Corporation for specialized Economic Zones is to provide Economic Parties with the best services that add value to their works and to promote and develop the economic investment in the Emirate of Abu Dhabi so as to meet the needs of the Emirate within the perspective of sustainable Economic development.
The newly founded body, under chairmanship of the Abu Dhabi Economic Department, has the task of providing support structures for establishment and management of specialized zones in the capital. The Abu Dhabi Department of Economy has emerged over the last two years as a driving force in the development of non-oil industries in the emirate.
Mussafah Industrial City |
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Mussafah Industrial City is one of the most important industrial and investment centers in the emirate of Abu Dhabi. It is 30kms from the Abu Dhabi City Centre, and boasts of very good road network linking it with Abu Dhabi and the other emirates. It is situated at about 30kms from the Abu Dhabi International Airport and 40 Kms from the Zayed Sea port (Port Zayed). The Mussafah Industrial area covers sq.kms 14 and is made up of six varieties of industrial zones based on their activities.
Zone 1: Automobiles, Machineries & Spare Parts shops
Zone 2: Food, Textile & Soft drink manufacturing
Zone 3: Engineering works, Wood and Herbal Industries
Zone 4: Chemical, Plastic & Petrochemical Industries
Zone 5: Building & Construction related materials
Zone 6: Advanced Technology Industries
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Availability of Natural Gas
The Mussafah Industrial Area is the only industrial area which supplies industrial gas. Normal Gas Unit Price is 4 Dirham/MBTU. Gas connection installation cost depends on factors such as size, distance and input. Land rent starts from 10 fils/sq. ft.
Starting a Project
An Industrial Project requires the approval from General Industrial Corporation, Abu Dhabi Chamber of Commerce and Industry and the Abu Dhabi Municipality and Town Planning Department.
Industrial City of Abu Dhabi (ICAD)
ICAD is located 30 kilometers from the centre of Abu Dhabi City and 25 kilometers from Abu Dhabi International Airport. It has shown very rapid recent growth with 355 major manufacturing companies employing more than 30,000 workers. The City provides all basic services and facilities for a wide range of industrial activities.
Land Rental Rate (Approximate):
Standard 50 fils per sq.ft
Sea side: AED 2 per sq.ft
Khalifa Port and Industrial Zone
Abu Dhabi government plans to construct a new seaport and an industrial city at Taweelah situating on the Dubai-Abu Dhabi coastline. The new port and industrial zone are in line with the current strategy of the local government to step up its pace of development in industrial, economic and tourism sectors
It is expected the new initiative shall help to increase the competitiveness and enhance the image as a globally recognized hub for investment and international trade. The Khalifa Port and Industrial City will be located at the geographically attractive area having access to deep water, power generation centers, and proximity to major expressways. The first phase of the city is expected to be completed in 5 years and entails an industrial estate, ancillary and supporting commercial and residential developments. The industrial zone will be a public-private joint venture and the sectors of industries are yet to be announced. The total financial outlay of the project is estimated as AED 8billion.
100% Ownership for Foreign Investors
Reflecting the aim of Abu Dhabi Govt. to transform its economy into a well-developed, modern and diversified economy, a landmark law has been enacted in 2006 to allow 100% ownership to foreign investors in certain of the industrial sectors. Initially the ownership shall be allowed in Industrial City-2 (ICAD-2) for those companies engaging in oil and gas related activities. ICAD-2 is a10 sq. kilo meters mixed industrial estate for accommodating dedicated oil and gas industrial services complex, as well as a building materials cluster. The law gives regulatory powers to the Higher Corporation for Specialized Industrial Zones (HCSEZ) to deliver on Abu Dhabi’s new economic diversification drive by developing a new economic model of public private partnership, granting companies 100% ownership, issue licenses & permits, provide tax exemptions, issue customs deferrals, carry out municipality functions and provide utility services.
< Advanced Industrial Units
Three basic types of Industrial Units offering offices, toilets & services are available for lease to industries that would like to start in ready made buildings
Cost of Services
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Water
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AED 2.20 /C.M
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Unit type 01
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2000 m2
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Electricity
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15 fils/kwh
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Unit Type 03
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1000 m2
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Natural gas
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AED 4 /MBTU
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Unit T |
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sector with AED 130.6 billion worth of projects under construction in 2005, accounting for 63.7% of the total value of projects under construction in the GCC states. The construction sector in UAE is booming and at an all time high. Its output grew at an average annual rate of 11% over the last decade, rising from AED14.5 billion in 1996 to AED 25.4 billion in 2004. Given the wave of real estate development during the last few years, the average growth rate during 2002-2004 exceeded 16% annum. The Real Estate GDP of UAE in 2004 stood at AED 29.5 billion and 40% of this was from the emirate of Dubai.
Property Law
In August 2005, President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, in his capacity as the ruler of Abu Dhabi, issued a law regulating the right to own and transfer real estate for citizens and expatriates. The Law states that the right to own properties shall be limited to UAE nationals and other corporate bodies wholly owned by them. GCC citizens will be entitled to properties within the areas designated for investment. Foreign Nationals will have the right to own surface property, but not the land itself, in investment areas. Expatriates will have the right to arrange all their properties on it and to derive benefit from the real estate based on a long term land title agreement which shall last for 99 years or a long term surface ownership agreement of 50 years.
Classification of Contracting Firms:
Contracting Firms have been classified under Regulation (4) by the contractors’ classification committee in the year 1980. Under this law, contractors/engineering firms are recognized under the following classifications as mentioned in the table below
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Category
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Minimum Value of capitals &
Assets (AED)
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“Technical Conditions” Permanent Technical Staff
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“Experience conditions”
Contracts executed
During the last 6 years
before applying for
classification
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Estimated value of the contracts
that he may participate in:
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Special
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20,000,000
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1. Full time Engineering and technical specialized staff consists at least of:
- Senior Engineer with experience not less than 15 years.
- Engineer with experience not less than 12 years-Two engineers with experience not less than 10 years each
2. Full time Accounting staff
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Three contracts at least
well executed, value of
each not less than
80,000,000
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More than 50,000,000
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First
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10,000,000
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1. Specialized Engineering & Technical staff consists at least of:
- One Engineer with experience not less than 12 years.
- Two Full time Engineers with experience not less than 5 years each. 2. Full time Accounting staff.
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Two contracts at least,
well executed, value of each not less than
40,000,000
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More than
20,000,000 up
to 90,000,000
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Second
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5,000,000
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1. Full time Specialized Engineering & Technical staff consist at least of:
-Engineer with experience not less than 10 years.
- Engineer with experience not less than 5 years.
2. Full time Accounting staff.
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Two contracts at least, well executed, value of each contract not less 20,000,000
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More than
10,000,000 up
to 50,000,000
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Third
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3,000,000
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1. Full time Specialized Engineering & Technical Staff at least: -
- One Engineer with experience not less than 7 years.
2. Accountant.
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Two contract at least,
well executed, value of each not less than
10,000,000
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More than Five
5,000,000 up to
30,000,000
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Fourth
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1,000,000
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Full time Specialized Engineering & Technical Staff at least: - one Engineer with experience not less than 5 years.
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Two contract at least, well executed value of each not less than
3,000,000
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More than 2,000,000 up to
15,000,000
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Fifth
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500,000
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Full time Specialized Engineering
Technical Staff f, at least: One Engineer with experience not less than 3 years. .
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5,000,000
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Procedures for Contractor Classification Registration
A Contractor, who wishes to register in the Contractor Classification Registration, will have to submit an application to the Committee Secretariat enclosing the following certificates and documents
1. Chamber of Commerce Membership Certificate
2. Commercial Registration Certificate.
3. Report from a locally registered audit firm regarding financial position of the applicant
4. List of technical staff, along with approved certificates of their qualifications and experiences.
5. Certificate for all contracts carried out by the applicant duly approved by the concerned authorities.
The Contractor shall be granted a certificate for the categories and specializations he has been classified in and this certificate should be renewed every two years. Final decision of the Contractors Classification shall be published in the official gazette. Only contractors whose names are recorded in the classification register are allowed to participate in tenders offered by governmental departments for contracting works. Governmental departments may invite the Contractor to participate in contracts falling under the category he is classified in.
However, exceptions are given to foreign companies and establishments, which have their main office outside the United Arab Emirates and have no branch office in the UAE. Their participation in contracting works shall be according to the current laws and regulations, provided that this will be limited to the specialized technical works, which cannot be performed by the contractors who are classified under the provisions of these systems.
Engineering Consultancy Firm -
Requirements for registering Foreign Company Branch
· Document of the Resident Engineer (R.E) not less than 10 years experience duly certified.
· Copy of the Resident Engineer’s passport as well as his University Degree in Engineering.
· Power of Attorney to the (R.E.) duly attested to act as manager and representative of the office.
· Partnership contract duly attested (if any).
· Certificate of incorporation, duly attested,
· A written undertaking to employ an engineering team after the issue of License.
· Previous experience and projects, duly attested, showing value of projects and type of works with completion certificates and contracts.
· Board Resolution to open a branch in Abu Dhabi.
· All supporting documents should be duly attested by the concerned authorities, then by the Embassy and UAE Ministry of Foreign Affairs.
· Sponsorship contract (if any) duly attested.
· Undertaking from Main Office to accept responsibilities of the Branch Office.
Rudiments for New UAE Local License
· UAE National holding B.Sc in Engineering with experience of more than 3 years.
· A technical manager should be appointed in the office that should have ten (10) years experience as Resident Engineer.
· Copy of the owner’s passport.
· No Objection Certificate in case the UAE National is a government employee.
· An undertaking to appoint the Engineering team of the office, civil, architecture, or as required.
Rudiments for Consultancy Office (Branch of UAE Company)
· Copy of the Municipality License.
· Copies of the degree certificate of the UAE National and of his passport.
· Previous experience of executed projects.
· Documents of the engineer, manager of the branch with power of attorney, duly attested.
· Partnership contract with the engineer, (if any).
· Certificate of incorporation inside and outside UAE for the Foreign office.
· Sponsorship Contract – (if any).
· An undertaking to transfer the engineer’s sponsorship and to appoint the Engineering team after obtaining the license
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