UAE President issues new law on regulation and development of industry

Decree will become effective in January 2023 and will be applied to all industrial activities in the country

The Abu Dhabi skyline. The UAE has introduced a new law to support the organisation and development of the national industrial sector. AP

President Sheikh Mohamed issued on Wednesday Federal Decree-Law Number 25 of 2022 on the regulation and development of the industrial sector.

The new law was introduced to support the organisation and development of the national industrial sector by increasing the flexibility to adopt more supportive policies and provide incentives, a UAE government statement said on Wednesday.

"The law aims to be a key enabler for the industrial sector, increase its investment attractiveness, and encourage local and foreign investment in industrial activities, in co-ordination with federal and local authorities," the statement said.

The new decree-law will become effective in January 2023 and will be applied to all industrial activities in the country, including free, economic and specialised zones.

The law allows for the creation of a package of incentives and enablers for the industrial sector that support national strategic objectives to increase industrial competitiveness. This includes the establishment of a national industrial registry that features an integrated database of industrial projects detailing their contributions to the national economy.

The decree-law enhances the role of the Ministry of Industry and Advanced Technology in promoting investment in the UAE, as well as in the adoption of advanced technologies and Fourth Industrial Revolution solutions. The ministry will play an expanded role in developing future industries and stimulating innovation and research and development in line with the National In-Country Value Programme.

“The new law to regulate and develop the country’s industrial sector helps to create an attractive business environment for investors, strengthens the UAE’s position as a global industrial hub, and reflects positively on the performance and growth of the industrial sector,” said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology.

“This law will drive industrial development through empowerment, integration and partnerships.”

The new law supports the goals of international agreements in which the UAE participates, such as those of the World Trade Organisation.

It will replace Federal Law Number 1 of 1979 on industry regulation. It will enhance integration between the ministry, local economic departments and licensing authorities in free, economic and specialised zones by standardising the process for issuing industrial licenses, the statement said.

The decree-law promotes the UAE’s industrial business environment. Legislation is among the mechanisms that enable the sector’s growth and competitiveness. Other tools include world-class logistics infrastructure and technology adoption.

“The law aims to empower the industrial sector and raise its contribution to GDP [gross domestic product], in line with the objectives of the Ministry of Industry and Advanced Technology,” Dr Al Jaber said.

The ministry will work with its partners from the Industrial Development Council to complete the executive regulations and organise information workshops for manufacturers about the law.

Through the industrial registry, the law will support a number of sectors including medicine, food, and medical and agricultural technology. It will also strengthen some of the nation’s most competitive industrial sectors, such as petrochemicals, iron, aluminium and plastics, while stimulating future industries, most notably the hydrogen and aerospace sectors, the statement said.

The decree-law also supports the Make it in the Emirates initiative launched by the ministry to enhance the role of the private sector and attract industrial investors through various incentives and competitive advantage,s such as legislative and regulatory frameworks, logistical capabilities, financing solutions, export opportunities, comprehensive economic partnership agreements (Cepa), bilateral trade agreements and advanced technology adoption.

“The law will make it easier for entrepreneurs, SMEs, advanced technology companies to obtain industrial licences by providing greater flexibility, especially in terms of employee numbers and size of investment,” said Dr Al Jaber.

Kizad, part of AD Ports Group’s Economic Cities and Free Zones, recently announced the signing of a lease agreement with NWTN to establish an electric vehicle (EV) assembly facility in Abu Dhabi. Photo: Wam

The decree-law is integrated with a package of projects adopted by the ministry to support the growth and global competitiveness of priority industries and consolidate the UAE's position as a global centre for future industries.

The law created a national industrial registry that includes a database detailing how much each industrial project contributes to the national economy. The data also help companies and investors to evaluate potential investment opportunities.

The law outlines the obligations of industrial facilities when acquiring an industrial licence. It also defines the mandatory controls, specifications and standards issued by the ministry in accordance with the procedures and controls specified by the executive regulations of the law.

The ministry is supporting the objectives of the Make it in the Emirates campaign with a number of programmes such as the In-Country Value Programme, which succeeded in redirecting more than Dh42 billion ($11.4bn) to the national economy, the Industry 4.0 programme, and the Make it in the Emirates Forum, during which major national companies announced their commitment to providing Dh110bn of potential purchase agreements.

The forum also identified 11 priority sectors that contribute Dh6bn annually to the country's GDP. The UAE’s industrial exports amounted to Dh116bn last year. The country also enhanced its quality infrastructure system, which includes standard specifications, metrology, accreditation and conformity assessment, to support the performance of the UAE industrial sector.

"The UAE is focused on integrating industrial growth with the country’s industrial identity under the theme of Make it in the Emirates. This strategy aims to unify industrial standards based on the highest standards of efficiency and production, which enhances access to global markets and raises the competitiveness of UAE-manufactured products,” Dr Al Jaber said.