Abu Dhabi: Abu Dhabi must duplicate Dubai's free zones and make it easier for businesses to start up and expatriates to change jobs, according to a recent report by consultancy Jones Lang Le Salle.
The report, published this month, claims that visa laws and a lack of small scale investment options are preventing Abu Dhabi from retaining a high-quality expatriate workforce.
"Similar to other economies in the GCC, in Abu Dhabi, expatriates — which form the majority of the population — are transient because of the restrictive visa laws, current economic uncertainties, and a lack of small scale investment options," David Dudley, head of the Abu Dhabi office of Jones Lang Le Salle and the author of the report, told Gulf News.
"I think the first point is that [free zones] make it easier for foreign companies to enter the market, for small and medium enterprises (SMEs) and bigger companies. By doing that it makes Abu Dhabi much more competitive regionally."
Dudley pointed out that existing Abu Dhabi free zones at TwoFour54, Abu Dhabi Airport, Port Zayed and Masdar City are a positive step, and that as the model develops in the city more free zones are sure to come online.
Jitendra Gianchandani, chairman of Jitendra Chartered Accountants in Dubai, agrees. "I think Abu Dhabi believes in slow and steady growth, which is not wrong. The present crisis has proved that they are solid as a rock and they should take advantage of this. Now is a good time to open the door for the investors," he said. At the same time, Gianchandani said that Abu Dhabi could learn from some of the problems that have arisen in Dubai's free zones.
"At present all free zones have different rules and procedures, [which need to be] written and open to the investors. Many investors find that the cost of services is very high compared to the similar services outside free zones," he said.
In 2010, a study commissioned by the Abu Dhabi Executive Council ranked Abu Dhabi 11th out of 56 global economies in presence of foreign high-skilled people, but 43rd in ability to retain new talent.
Jones Lang Le Salle says that a high turnover of professional expatriates negatively impacts Abu Dhabi's economy because it discourages long-term commitment and investment. Relaxing the visa policy would foster a fluid labour market, boost innovation and entrepreneurship and expand employment, Jones Lang Le Salle says.
