Why Ajman is the Hidden Gem for Business Investors

Ajman, the smallest of the seven emirates that make up the United Arab Emirates, is steadily gaining recognition as an attractive destination for business investment.

With Dubai’s real estate market reaching saturation point, investors are looking towards the northern emirates for more affordable and viable opportunities. Ajman in particular stands out for its strategic location, business-friendly policies, and high growth potential across multiple sectors.

Ajman – The Hidden Gem for Business Investors

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The need for alternative investment locations is clear. Commercial hubs like Dubai and Abu Dhabi have served businesses well, but market competition is fierce and costs are skyrocketing.

Ajman provides a solution, with its lower overheads, simplified business setup process, and wealth of investment prospects waiting to be tapped into. For entrepreneurs and companies looking to expand in the UAE, Ajman warrants serious consideration.

Strategic Location: Proximity to Key Cities

One of Ajman’s biggest advantages is its proximity to the major economic centers of Dubai and Abu Dhabi. It is located along the coast of the Persian Gulf, immediately to the northeast of Sharjah. Ajman is only 30-40 minutes away from Dubai by car, and around 1.5 hours from Abu Dhabi.

For businesses, it provides easy access to supplies, customers, trade routes, and airports. Ajman International Airport helps connect the emirate to the rest of the country and beyond.

Ajman’s close geographical ties to Dubai and Sharjah in particular create lucrative opportunities. Dubai is a global hub and major importer, with companies in Ajman well-poised to cater to its needs.

Meanwhile, much of Ajman’s workforce commutes from the more populated Sharjah. Ajman gets to tap into the labor pool and expertise available in neighboring emirates.

In essence, investors get the best of all worlds – affordable real estate and operating costs in Ajman, combined with convenient access to the largest business markets in the UAE.

Ajman has the strategic location to support expansion plans and target new customers and partnerships.

Accessibility

Ajman has invested heavily in its transport and infrastructure over the past decades. An extensive network of highways and roads connects Ajman City to other emirates.

Sheikh Maktoum Bin Rashid Road is the main thoroughfare running through the emirate’s coastal cities. The well-developed road system makes commuting easy for the workforce and the transport of goods efficient for businesses.

Ajman Public Transport Corporation provides regular bus services within Ajman and to neighboring emirates. Bus routes connect the various neighborhoods of the city and run throughout the day.

Shared taxis are also commonly used for travel within the emirate. For those preferring rail, Ajman is a 50-minute train ride away from Dubai. Ajman has its own station on the Dubai Metro line.

Ongoing infrastructure projects will further boost Ajman’s accessibility and links to the rest of the UAE. These include the Sheikh Khalifa bin Zayed Road expansion and the Ajman-Ras Al Khaimah highway.

In summary, Ajman has the modern transportation options for people and products to move with ease. Businesses can leverage close proximity while maintaining low overheads.

Cost-Effectiveness: Affordable Real Estate

Some of the most compelling reasons to invest in Ajman are significantly lower costs than neighboring emirates. This starts with real estate – office rentals, warehouse spaces, retail shops, and housing for employees.

Average commercial and residential rental rates in Ajman are 30%-40% cheaper compared to Dubai.

For example, the average cost of renting a 2-bedroom apartment in Ajman is AED 35,000 annually, while in Dubai it is AED 60,000. Office spaces come in at AED 1100 per sq. ft. in Ajman compared to AED 1600 in Dubai.

Industrial land rates are even more staggeringly different. Ajman offers industrial plots for AED 300 per sq. ft. on a freehold basis. In Dubai, the same would cost AED 2100 per sq. ft. Buying commercial or industrial property is also more affordable.

These savings get multiplied for larger office spaces, warehouses, staff accommodation, retail outlets and so forth. Ajman provides quality infrastructure and facilities at a fraction of the rental cost in neighboring emirates.

Lower Operating Costs

Beyond real estate, the day-to-day costs of running a business are also lower in Ajman. Recruiting skilled professionals, support staff, and laborers is cheaper due to the lower cost of living. Operating expenses like maintenance, utilities, and local transportation are more affordable as well.

Ajman has lower municipality fees for utilities like water and electricity compared to Dubai and Abu Dhabi. The fees for business licenses, permits, PRO services and other government processes are also less expensive.

VAT in Ajman is the same 5% as other emirates, but Ajman is exempt from any additional municipality taxes. There are municipal taxes on services and hotel taxes in places like Dubai.

Overall, a company could save 20% to 40% on operating costs by being based in Ajman rather than other emirates. The cost advantages apply across administrative expenses, staffing, utilities, banking and other business needs.

Business-Friendly Environment: Simplified Licensing Process

Ajman is actively reforming and streamlining its business rules and procedures. The Department of Economic Development has implemented initiatives to ease the process of obtaining business licenses.

With recent policies, approval for certain category licenses now can take less than a day. 90% of licenses fall under this fast-tracked category. There is a dedicated desk at the DED for instant license issuance.

Ajman has also eased up restrictions on foreign business ownership – 100% ownership is now allowed outside of certain sectors. Trade licenses can be now be sponsored by organizations instead of individuals.

Various government departments have been integrated electronically on a single platform. This has reduced paperwork and delays. The e-government system allows completing various transactions like paying fines and registering employees quickly online.

Overall, Ajman offers one of the simplest and quickest licensing processes in the region. The business-friendly reforms save companies time, cost and effort.

Tax Benefits

Ajman provides several tax advantages that make it an especially attractive investment destination. To begin with, Ajman is a tax-free emirate – there are no corporate taxes or personal income taxes applied. This removes a major financial burden for organizations.

Secondly, Ajman avoids double taxation for foreign investors through tax treaties and agreements with several countries. This prevents an entity or individual from being taxed both in Ajman and their home country.

Ajman also avoids tax conflicts between GCC countries – there are unified GCC VAT and customs agreements. Goods can be easily imported and exported between GCC nations with no additional taxes.

Finally, Ajman permits foreign corporate entities to establish branches without needing UAE national shareholding. There is no corporate tax regardless of ownership structure.

The tax-friendly regime makes Ajman ideal for global enterprises as well as startups and entrepreneurs. Businesses can retain greater profits while remaining fully compliant.

Diverse Investment Opportunities: Thriving Sectors

A wide range of industries are thriving in Ajman, creating ample investment opportunities. Some of the top sectors include:

Manufacturing – Ajman is home to over 3000 manufacturing units churning out products like food items, plastics, chemicals, fabrics, metals, furniture and more. Companies benefit from affordable industrial land, low utility costs and accessibility to Dubai’s ports.
Logistics – Ajman’s central location and transport links make it a natural logistics and distribution hub. Many shipping companies are based here to store and transport goods between Asia, Africa and the Gulf region.
Technology – Ajman is boosting its digital infrastructure and resources. Tech companies are setting up operations to tap into the UAE’s rapid digital transformation. Education technology is also big.
Tourism – Ajman’s natural attractions, heritage sites, resorts and shopping destinations draw visitors. Tourism infrastructure is expanding with new hotels and a $1.1 billion waterfront development.
Financial Services – Ajman has Islamic banks, investment companies and financial service providers. The financial district offers opportunities in banking, insurance and related sectors.

In essence, Ajman has a diverse economy beyond just real estate. Investors will find promising prospects in manufacturing, retail, hospitality, tech and many other domains.

Innovation and Technology

Innovation is a key focus for Ajman to build a knowledge-based economy. The Ajman Center for Innovation was launched to support technology adoption. Ajman Science Park provides co-working spaces and training for youth to gain tech skills.

Incentives are being offered to tech startups such as subsidized housing, discounted office space and streamlined visa procedures. Tech-focused events like the Ajman Hackathon also held.

Free zones like Ajman Free Zone and Ajman Media City Free Zone give companies the option to operate within regulated clusters. These zones offer customized IT infrastructure and support.

Ajman is also investing in smart technologies like automated traffic systems, electric vehicle infrastructure, and data centers. Spending on IT infrastructure and digital services is growing steadily.

The business-friendly regulations, next-gen facilities and geeky workforce make Ajman the perfect incubator for tech enterprises and entrepreneurs.

Quality of Life: Work-Life Balance

While Ajman is more cost-effective, it does not compromise on living standards and quality of life. Modern accommodations, amenities, restaurants, and attractions make Ajman an excellent place to live and work.

Traffic congestion is less severe than other cities. Commutes are easier and working hours more manageable for employees. The more balanced pace allows time for family, recreation and community building.

Ajman has pristine beaches, stunning natural reserves like the Al Zorah Nature Reserve, adventure parks and other entertainment for residents. There are options for hiking, cycling, water sports and camping.

Compared to Dubai’s concrete jungle, Ajman offers more affordable housing in peaceful suburbs. The mix of natural beauty, modern conveniences and close-knit neighborhoods enhances well-being and satisfaction.

Safety and Security

Along with quality of life, Ajman also prioritizes safety and security. Ajman ranked as the 3rd safest city in the Middle East region, and crime rates are extremely low. There are strict punishments and monitoring for serious offenses.

The incidence of traffic accidents is also lower than other emirates due to road design and traffic regulation. Government departments like Ajman Police utilize the latest tech and patrols to enforce law and order.

Healthcare is robust with facilities like Sheikh Khalifa General Hospital, Al Zahra Hospital, and over 50 medical centers and clinics. Ambulance coverage is comprehensive and response times are fast.

Fire safety is exemplary with trained civil defense teams, strict safety codes, and regular drills and inspections of buildings. Workplace injuries are lower due to worker protection directives.

Overall, corporations can rest assured that employees are well protected in Ajman. The secure environment minimizes risks to the safety and wellbeing of expatriate and local workers.

Government Initiatives

The Ajman government has introduced impactful initiatives to boost business and attract foreign investment. These programs showcase the leadership’s commitment to economic development.

One example is the Ajman Digital Transformation Strategy 2021 launched by Sheikh Ammar Bin Humaid Al Nuaimi, Crown Prince of Ajman. It aims to strengthen government efficiency and integrate advanced technologies across various sectors.

The Emirate of Ajman Hotel Development Strategy was announced to promote tourism growth and outlined plans for 20 new hotels by 2025.

The government also issues special economic directives and resolutions periodically – for instance, allowing 100% foreign ownership or reducing fees for government services.

Ajman issues investment guides detailing available opportunities in manufacturing, tech, tourism, education and more. It also publishes comparative studies benchmarking Ajman against other emirates.

The Ajman Free Zone Authority has its own promotions to attract companies like discounted office leases, waived fees and custom infrastructure.

Ultimately, the Ajman leadership recognizes the immense potential of the emirate and has taken active steps to unlock its full economic value. The business-friendly strategies accelerate growth and make investment more appealing.

Testimonials: Many business owners and investors have praised Ajman’s merits:

“We started our tech company in Ajman given the affordable operating costs and access to talent. The business license process was quick and straightforward. Within two years we grew from 5 to 60 employees.” – Jayesh Sawlani, VP (Operations) at Transmind Technologies
“Ajman enabled us to get quality manufacturing infrastructure at excellent rates. Their industrial zones have top facilities and easy access to suppliers and workforce. Our operations scaled smoothly.” – Priya Thomas, CEO, AZENKA Foods
“My eCommerce startup got support through the incentive programs for technology ventures. We received subsidized housing, discounted office space and more. This environment has really boosted innovation.” – Amina Shabeer, Founder, ShopsHive
“Compared to Dubai where we earlier operated, Ajman gave us at least a 25% reduction in overall costs. The savings improved margins and helped scale capacity. No regrets on relocating!” – Mohamed Kareem, Director, Swift Logistics

These experiences validate Ajman’s strengths – strategic location, business-friendly policies, attractive costs and high growth potential. Companies can leverage these benefits and grow successfully.

Challenges and How to Overcome Them

While Ajman holds tremendous promise, it is not without obstacles. Here are some common challenges faced and ways to address them:

Talent Shortage – Ajman is still developing its knowledge workforce. Tap into talent in Dubai and Sharjah, offer training programs, partner with universities.
Access to Funding – Local banks are risk-averse. Connect with international banks or VCs, explore government SME funding programs.
Infrastructure Gaps – Power and water supply can be unstable. Use backup generators/tankers, shift water-intensive work off-peak.
Bureaucracy – Some business procedures may still have delays. Hire a specialized PRO, develop government relationships.
Market Information – Insights on consumer behavior is lacking. Conduct primary surveys, use statistics from federal sources.
Language Barriers – English use is low among staff. Offer language training, hire multilingual coordinators.

With the right strategies, investors can navigate the challenges in Ajman. The benefits outweigh the limitations. Partnering with local entities helps smooth operations.

Conclusion

In closing, Ajman holds tremendous potential as a startup and investment destination. Its strategic location provides easy access to Dubai and Abu Dhabi’s thriving markets. Ajman offers affordable real estate, lower operating costs and an increasingly business-friendly government.

Companies can target manufacturing, logistics, tourism, tech and emerging sectors. Quality of life, safety, infrastructure and government support all enable growth. Despite some ground-level challenges, the long-term trajectory is positive.

Overall, Ajman provides the ideal entry point to tap into the UAE’s economic boom with lower capital requirements. Businesses seeking affordable expansion or scalable new ventures would do well to consider Ajman. With the right research and local partnerships, Ajman offers the perfect recipe for commercial success.

Ajman is one of the best options you have if you want to establish or expand a business in Dubai but are on a tight budget.

Set up a business in the best tax-free country in the world and cash in on the United Arab Emirates’ booming economy with minimal outlay. We at ReCorporate are available to assist you in any manner we can. Simply get in touch with us to schedule a no-cost consultation with one of our business setup specialists.

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