Ajman

The Emirate of Ajman is experiencing a rapid transformation along with some of the highest growth rates in the UAE. Average annual GDP growth in Ajman has been a phenomenal 11% over the past decade. According to Ajman’s Chamber of Commerce, in 2006, Ajman’s GDP rose to AED 3.5 Billion, contributing 1.25% to the UAE’s total GDP that year. Ajman has benefited from its small size, as this means that each individual development has the opportunity to make a significant impact, as well as create a strong surge in several key sectors. These sectors include tourism, banking, education, health care and industrial.

• Proximity to other emirates
• A secure haven for investment
• Distinguished economic development over the years
• Cheap energy
• Economical wage structure and easy access to vast work force (low labor cost)
• Unique geographic location
• World-class facilities provided by Ajman Chamber of Commerce and Industry
• International standards and accessibility to the 2 international airports and four ports

• The availability of energy at competitive rates and costs with secured and guaranteed provision and supply on longer terms.
• The availability of raw materials for certain industries and the possibility for extraction of these materials.
• The strategic geographic location of the Emirate, which is also distinguished by its accessibility to the regional and international markets.
• The development of the infrastructural utilities such as the port, roads, transportation and industrial areas.
• The availability of domestic capital and financing.
• The availability of basic industries for provision of materials required by the finishing and intermediate processing industries.
• The availability of financial incentives and facilities for investments by many of domestic and international banks in Ajman.
• The low operating costs for many industries when compared with other areas in the world.

Unique Services to attract investment that are provided by Ajman Chamber of Commerce and Industry

1. Issuing and attesting certificates of origin.
2. Organizing and promoting commercial and industrial activities.
3. Settling commercial & Industrial disputes between the Chambers’ members.
4. Organizing specialized exhibitions and conferences.
5. Providing all Chambers' members with commercial and industrial information and data.
6. Publishing commercial and industrial directories annually.

Unique Investment Incentives provided by Ajman Port

1. Free storage days are increased for certain types of cargo.
2. Reduction of customs duties.
3. Dhows and wooden boats are exempted from payment of landing fees.
4. Landing and sailing, stevedoring, guidance, telecommunication, equipment transport, maintenance, security, inspection and other port services.
5. Customs duties are not levied on heavy equipment, machinery and raw material imported for starting new industrial projects in Ajman provided that 51% of shares of the importing firms are held by UAE nationals.

Unique Capabilities and Incentives provided to investors and entrepreneurs by Ajman Free Zone

1. 100% foreign ownership.
2. 100% repatriation of capital and profits.
3. Guaranteed 20 years Tax Free operations; renewable for an additional 20 years.
4. No personal income taxes.
5. Access to unlimited resources of work force with the most economical wage structure to assist the investors in maximizing profits.

Ajman’s booming Financial Services Sector, a strong indicator of a healthy investment climate

Ajman’s financial services sector in 2005, boasted a contribution to the economy of approximately AED 28.42 Billion. This figure nearly doubled the $4.03 Billion the Emirate added in 2000. The fundamental factor for Ajman’s growth, beyond the rise in oil prices and the subsequent high liquidity and an increasingly diversified economy, has been a preference in the region to keep wealth and investment close to home. The banking sector in particular has enjoyed remarkable growth, which intensified dramatically starting in 2002. It has also included the development of retail, banking and initial public offering financing in addition to sustained low interest rates.

The long-standing leader in the emirate’s banking sector is the Commercial Bank of Dubai. With the opening of the Ajman Free Zone, the bank has been able to offer its complete range of services to many foreign institutions. This is extremely attractive to the investment world. The insurance sector has also witnessed strong growth, although penetration rates are still low.  These low rates are being partly overcome by the introduction of takaful, Islamic insurance, to overcome any religious uncertainties regarding insurance products. Growth in banking loans and insurance underwriting is expected to be driven by increasing economic development and population pressures, both of which look very likely to increase over the next three to five years.
Top

Ajman’s construction boom attracting investment to the Emirate

Ajman's place in the Middle East's $1.5trn construction boom is assured. In 2005, the emirate's property market was worth an estimated Dh3.5bn ($953.05m), according to transaction records. To global investors, this statistic is very impressive. This construction acceleration arrives as conditions in the construction industry across the UAE are tighter than they have ever been. In October 2007, it was reported that the average price of building materials had gone up 20% from the previous year and that outsourced labor costs had gone up 30%. However, the emirate's ability to use local contacts and knowledge to get work done, as well as to create price caps on some materials, has helped to restrain these inflationary forces.

In addition, cheaper and more liberal work permits in the emirate mean fewer problems with labor as has been seen throughout the rest of the UAE. Despite Ajman's advantages, challenges remain. One of the major concerns for developers is infrastructure, particularly in roads, electricity and other public services to keep construction projects running on time. However, the emirate remains a key destination for new investment in real estate and construction projects. The UAE has seen its population grow by nearly 75% in the past decade. As a result, new property laws have had to be introduced in order to accommodate nationals and non-nationals. Ajman has led the UAE in this respect, being the first emirate to offer 100% freehold rights to non-nationals in 2004.

The real estate sector has a strong government presence in the form of three major developers controlled by the ruling family. Several private companies from outside the emirate are also entering the market. All of this has led to an increase in the mortgage market whose target customers are young families who are trying to purchase their first homes and cannot afford to pay rent on their existing apartments as well as making down payments on a new home. Land prices have sky rocketed from just $11 per square foot to as high as $100 per sq foot. By the third quarter of 2007, developers in Ajman had announced projects with total investments of approximately Dh80bn ($21.78bn), a remarkable figure considering the transactions market was valued at $953.05m in 2006, well up on the $118.81m seen in 2003. These projects are expected to add at least 65,000 units and are expected to become available between 2009 and 2012.
Top

Transportation and Infrastructure policies support Investment in Ajman

With a population currently growing at 18% per year and real estate investments worth more than Dh80bn ($21.78bn), current projects to improve the emirate's transport and infrastructure are increasingly important. Most of the current focus has been on the Ajman Port, improved road links to neighboring emirates and a new state-of-the-art sewage and wastewater treatment plant anticipated to come online in 2009. The plant is a public-private partnership being constructed on a build-operate-transfer basis. The government initially owns 20% of the plant, gaining full ownership after 25 years. Because air conditioning is a necessity and places a heavy burden on the electricity supply, the introduction of district cooling that provides cooling from a central location to various locations has been introduced as an alternative. It initially met with some resistance due to high start up costs. However with electricity becoming an ever more precious commodity as greater demands are placed on the system, the technology is starting to catch on in Ajman, as well as throughout the rest of the UAE. Additionally, the municipality's planning department is making efforts to systemize and rationalize land use in the emirate for maximum economic benefit with an eye towards environmental sustainability. Despite recent updates to the Port of Ajman, which can now handle 3000 twenty foot equivalent units each month, competition with other, much larger, regional ports has left officials looking to relocate the port to a more advantageous location within the emirate.
Top

A Strong Investment indicator: Developments in Industry and Retail

The textiles industry has historically dominated Ajman's industrial profile but it is now on the wane. A shift in the last few years has attracted investors in the areas of chemicals and machinery production. In the area of chemicals, everything from plastics for retail packaging to perfume are being made. Steadily increasing investments have been made in fabricated metal, machinery and equipment operations in the emirate. Meanwhile, Ajman's industrial sector is evolving from a focus on low-skilled, volume-reliant products like textiles to higher-skilled and more value-added production. One additional area in which this is happening is the boat-building sector. Long a centre for traditional dhow boat building, the emirate is well positioned to take advantage of a new trend in leisure marine products - luxury yachts. With a high number of leisure boat builders, Ajman's yacht manufacturers have been able to meet local demand and develop a sustainable export market. With the possibility of 100% foreign ownership, repatriation of profits, no personal or corporate tax and a one-stop approach to bureaucratic concerns, the emirate's free zone is an appealing place to locate a manufacturing concern. Ajman's residents are hungry for additional retail offerings, which are soon to be at least partially sated with the introduction of the Dana Mall, a Dh400m ($108.9m), 150,000 square foot retail complex that is expected to be completed by the end of 2008.
Top

Energy and Investment in Ajman

At present, the Federal Electricity and Water Authority (FEWA), which serves the northern emirates of Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah, operates six power generation and three water desalination plants. Work to increase capacity across the board is being undertaken with the major element slated to be located in Ajman, at the Al Zora power plant, which is expected to be completed by mid-2008. By global standards, energy consumption in the emirate and throughout the UAE are exceptionally high in per capita terms. Prospering businesses and real estate developments are creating a growing demand for power. The Abu Dhabi Water and Electricity Authority anticipate the demand for electricity will grow by 7% to 7.5% each year until 2012. Power and water are still sold well below market rates for UAE nationals. Due in part to low revenues, investments in capacity have not kept up with demand, leading to shortages. This has led to a need for rationing with some businesses having to rely on diesel generators. As a result, developers are looking more seriously at alternatives for high demand uses such as air conditioning. The use of centrally located chilled water used to cool buildings is catching on, despite initial resistance because of high start-up costs. The Ministry of Energy is keen to promote renewable energy sources and is currently gathering information for research projects.
Top

Tourism from an Investor’s Standpoint

Ajman's location within easy flying distance from key markets in Europe and Asia, combined with beautiful beaches, solid transport infrastructure and a warm and welcoming culture make the emirate an ideal vacation spot. With the busier and more crowded emirates next door, Ajman has become a place for holidaymakers to go to get away from it all with hotel offerings targeted more toward people looking for luxury and comfort. While there have been few high-end hotels available for people looking for a low-key holiday, this is slated to change in the near future with a number of five-star hotels being constructed along the Ajman corniche and elsewhere within the city. With hotel occupancy rates in the neighboring emirates running at about 80%, the anticipated rise in the number of hotel rooms and hotel apartments is expected to provide welcome relief, particularly to business travelers. Another project, aimed at people looking for something with a more natural feel, the Al Zora project on the eastern side of Ajman Creek will provide an exclusive, integrated holiday and residential destination. Overall, Ajman is seeking to create an image for itself with a luxurious, exclusive feel.

Top