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This chapter contains an overview of the legal framework in which local and foreign investors operate in Abu Dhabi including the key highlights of the basic legislative guidelines, a review of the main points for setting up a business and an outline of the free zones and other incentives on offer.

This chapter contains an overview of the tax framework in which local and foreign investors operate in Abu Dhabi, as well as a look at the value-added tax system being developed across the GCC, a rundown of the social security contributions required for local staff and an outline of the double taxation treaties in place or on the way. This chapter contains a viewpoint from Dean Kern, Middle East Tax and Legal Services Leader, PwC.

As a rising population continues to put upward pressure on demand for food, Abu Dhabi’s authorities are pursuing various initiatives to promote domestic production, both as a means of economic diversification and to further bolster food security, with various bodies responsible for the agricultural sector being established over the last 10 years. Although innovative solutions have increasingly started to come on-line in Abu Dhabi, particularly regarding water, the emirate’s desert climate presents significant barriers to large-scale agricultural expansion. As such, the bulk of the emirate’s foodstuffs continue to be sourced from abroad, with various strategic investments in recent years focused on diversifying Abu Dhabi’s international supply streams. Meanwhile, at home, investments in stockholding capacity are aiming to mitigate the short-term impact of potential disruptions to international supply, and a fast-growing agri-food and food-processing segment looks set to position the emirate as a leading regional player.

Driven by healthy population growth, world-leading income per capita, and steady demand for high-end retail space, Abu Dhabi’s retail industry has undergone years of strong expansion, leading to an influx of new project completions between 2013 and 2015. The industry, like many others, is beginning to feel the pains of reduced economic expansion, as lower global oil prices and the strengthening US dollar are expected to impact spending and tourism growth in the coming years. At the same time, two large-scale “super-regional” malls, on Al Maryah Island and Al Reem Island, are slated to open in 2018, intensifying competition and weighing on retail rents. Increased competition has nonetheless spurred innovation in the sector. Developers are increasingly linking retail developments to tourist attractions and residential complexes, and have sought to incorporate long-term urban planning considerations such as creating free public spaces and community centres. The grocery segment meanwhile is set to kick-start growth in the UAE’s nascent e-commerce industry, offering new opportunities for investment and expansion.

The media sector in Abu Dhabi looks set for continued growth as ongoing efforts to attract major international companies to twofour54, the emirate’s dedicated media free zone, continue to bear fruit. Expansion efforts are underpinned by the rollout of the physical infrastructure required to support the sustainable growth of the sector, as well as the numerous initiatives in place to foster the emergence of a local talent base. Meanwhile, the international partnerships forged by media players in recent years will ensure that the aims outlined in the Abu Dhabi Plan to cement the emirate’s reputation as a prominent media hub in the region are met. Looking ahead, the continued migration of media away from print towards online resources has resulted in a corresponding shift in advertising revenue streams, and although the MENA region has historically lagged behind in this regard, the GGC is now looking forward to a significant growth in digital advertisement spend. This chapter contains an interview with Maryam AlMheiri, CEO, twofour54.

High mobile uptake, leading smartphone penetration, and rapid expansion of wireless broadband and fibre-optic infrastructure have driven the UAE to the forefront of regional telecoms development. Although mobile tariffs are comparatively high and international volatility has affected operator profits, a recent series of consumer-friendly reforms should help control consumer charges while supporting growth. The Telecommunications Regulatory Authority has rolled out several consumer-friendly changes aimed at boosting competition, with a long-awaited infrastructure-sharing deal between the two mobile operators making significant progress in 2016. Meanwhile, the emirate’s IT sector has shown promising growth over the previous decade, bolstered by rising levels of mobile broadband service offerings, smartphone penetration and internet usage. ICT development is a critical priority for the emirate and the UAE, as reflected in both national and emirate-level, long-term economic development strategies, which have significantly expanded e-government offerings and cybersecurity initiatives in recent years.