Businesses in Abu Dhabi are set to benefit from large energy discounts, easier access to bank loans and a new Dh4 billion research and development fund.
The policies announced on Tuesday are designed to support existing companies as well as attract more investment to the emirate from overseas.
The strategy will form part of a wide-ranging Dh50 billion investment and reform programme being introduced between 2019 and 2021.
The latest nine-point policy programme, revealed at a private-sector forum held on Saadiyat Island, was welcomed by business leaders, who singled out a government-backed loans scheme, designed to promote lending to SMEs, as particularly significant.
Other changes include a pledge that contractors working for the government sector must be paid within 30 days, to help companies with cash flow.
A new licensing regime designed to make Abu Dhabi more hospitable to developers of new technologies is a further measure. In a separate development, an 'instant licence' scheme was announced, in an effort to make conducting commercial activity easier than ever before.
Applicants will be able to apply online and in most sectors, will be able to begin conducting their business activities immediately.
“Our message today is simple – it has never been easier to do business and invest in Abu Dhabi," said Saif Al Hajeri, Chairman of the Department of Economic Development.
"This raft of new initiatives reinforces the government’s commitment to working hand-in-hand with the private sector and to supporting the needs of entrepreneurs, SMEs and multinational companies. With today’s announcements and an active pipeline of further initiatives to come, it is clear that Abu Dhabi’s economy is rapidly evolving into one that is even more dynamic and globally integrated.”
In a move targeted at helping the industrial sector, an electricity discount scheme will see businesses save up to 40 per cent on their tariffs, with applicants judged against a formula to assess the level of the discount.
An "open data" initiative to offer more transparency to businesses, giving them access to government-collected information such as employment information.
And an ecotourism drive will encourage private-sector investment in undeveloped parts of the emirate – particularly its islands and the Mirfa coastal region.
The initiatives form part of the Ghadan 21 programme, announced by Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, in 2018.
The scheme formally began in January, with Tuesday’s event designed to take place six months into the three-year programme, which has the overarching aim of reducing the economy’s reliance on fossil fuels.
“We have a very clear vision to diversify the economy away from oil,” said Rashed Al Blooshi, undersecretary at Abu Dhabi Department of Economic Development.
“As a result we have put very clear steps in place to shift the economy. We have huge potential to do so, and to proceed with that we have come up with these initiatives, with the close cooperation of the private sector.”
The open data programme will enable potential investors and other parties to ask Abu Dhabi Data Authority for information held by the government, which will help them make informed decisions. The move is designed to create an “open data culture”.
The Dh4 billion research and development fund has been created to help private companies, which will be able to apply for financial assistance. Rebates of up to 50 per cent on a company's R&D spending programmes will be on offer under the initiative. A further 25 per cent is on offer if a product reaches the market.
Tourism initiatives will look at incentivising the private sector to move into underdeveloped parts of Abu Dhabi with the offer of tax breaks and infrastructure spending to support new environmentally friendly projects.
Under an agreement with First Abu Dhabi Bank (FAB) the government will also guarantee up to 75 per cent of bank loans to small and medium-sized enterprises, in an effort to reduce risk and encourage lending.
The initiatives will be open to all local businesses, as well as expat-run companies.
“We are in a new era,” Mr Al Blooshi said. “If you want money, it’s there. If you want knowledge, it’s there. If you want data, it’s there. You want to speed up the process, it’s there.
“Come, take it - add value to yourself, your business and compete locally and internationally.
“We, here in Abu Dhabi, want to attract ideas, brains, smart people and all the infrastructure around that.”
Under Ghadan 21, a series of targets have been set following extensive consultation with business and studies of countries such as Norway, Sweden, Switzerland and Singapore.
It is hoped that the contribution of the private sector to Abu Dhabi’s GDP will rise from 32 per cent currently to 37 per cent by 2021.
There are also plans for further public-private partnerships in infrastructure, while also allowing businesses to play a more prominent role in the sectors such as education.
Initiatives have also been introduced to reduce the cost of doing business, and it is hoped that Abu Dhabi will soon be classified as one to the top-10 economies for doing business, up from 12th currently.
“The government is seeking to create an attractive and competitive environment not only for big international institutions and companies but also for SMEs of all nationalities,” Mr Al Hajeri said.
“We aim to increase the share of SMEs activity in Abu Dhabi from 16 to 23 per cent by 2021, achieving the required growth and prosperity based on the ability of companies of all sizes to attract the most talented human capital.
“We seek to transform Abu Dhabi into a destination capable of attracting international talent and families alike, as we believe family stability helps to retain the best human resources. Our efforts will unquestionably have a positive impact on Abu Dhabi’s community, which is being looked at as an global model for coexistence and tolerance.”
The proposals were welcomed by businesses, with several prominent figures from Abu Dhabi's private sector attending the Saadiyat Island forum.
"This [package of incentives] is really uplifting for the private sector businesses," said Muhamed Kasim, operations director of Abu Dhabi-based Cmets Engineering Solutions, part of a wider group with interest in oil trading and energy.
"There weren’t many free zones in the Abu Dhabi a couple of years ago, which has changed and expatriates can now own businesses there. These incentives will help them to grow their businesess."
Faiz Ahammad Assadi, managing director of Al Marina Holding, an Abu Dhabi-based company holding company with interests in hospitality, real estate, tourism and financial investments said: “It is a good opportunity, especially the SME financing. There are markets we are looking at and FAB is willing to help us out so we will be able to invest [further].
“The only thing is that we need to know how it [this financing process] is going to work for private sector. Payments [within 30 days] is a big plus.”
Hailed as a 'major step forward' in attracting investment, the Abu Dhabi Instant Licence has been hailed as one of the quickest business licensing regimes in the world.
All commercial licence applications will streamlined through a digital portal and consolidated into broader licencing categories offering businesses greater flexibility. Approvals are processed instantly online and licence holders in most sectors may begin conducting their business activities immediately.
Businesses will be able to apply for discounts to electricity bills of up to 40 per cent. Applications will be judged against "transparent" eligibility criteria, with different levels of discounts applied, depending on the information submitted. The new industrial tariffs will be determined by an established scoring mechanism based on three criteria: economic impact, productivity and electric load.
All government suppliers will be paid within 30 days. The rule has been formalised following extensive consultation with the private sector. The Council for Economic Development received feedback from 140 companies and the priority is quick settlement of invoices. All companies that had been owed money have been paid under the Sharaka initiative announced last summer under Ghadan 21.
The private sector will be incentivised to build on greenfield sites, while there are also hopes that parts of the desert and uninhabited islands will be developed. Authorities have identified a series of sites they believe could become successful ecotourism hubs.
Under an agreement with First Abu Dhabi Bank, the biggest lender in the country, the government will look to open new avenues of financing for small and medium-sized businesses. Under the terms of agreement, FAB will extended funds, which will carry government guarantees of up to 75 per cent of the loan amount in case of a default.
This initiative is designed to make Abu Dhabi a more welcoming place for cutting-edge businesses, in areas such as AI and autonomous vehicles. It is hoped that it will ensure companies working in new areas will not be disadvantaged because a licensing regime for a new innovation is not yet in place.
The Abu Dhabi government is seeking to build an “open data culture”. In practice, this means companies and other stakeholders will be able to request any statistics held by the government, which will help inform decision-making.
Businesses will be able to apply for licences, for example, quickly and simply online, in an effort to support companies and promote efficiency, in an expansion of the government’s Tamm services centre. Ten to 15 new services will be added.
RESEARCH AND DEVELOPMENT FUND
A new Dh4 billion research and development fund has been set up, with private businesses given access to cash to help them innovate. It will be run by Abu Dhabi Investment Office. Businesses that invest in R&D will qualify for significant rebates.