UAE is the second largest Arab economy. And UAE’s foreign policy geared towards creating greater commercial opportunities
with various partners. The UAE’s fast-developing position as a financial hub for the region has further
solidified and strengthened its position as a member of the global community.
The law now requires foreigners to have an Emirati as a sponsor and limits them to a maximum 49 per cent
ownership of businesses. With the number of zones increasing, their impact on the UAE economy has
deepened. Total investment is estimated to be more than $4000 million.
And the value of exports from the Free Zones reached to 16.5 billion in
1998. The UAE Free Trade Zones saw a 16.4 per cent increase in exports, which reached Dh97.46 billion in 2008.
And re-exports reached Dh345.78 billion, a rise of 33.4 per cent. Rising domestic demand due to increases
in population and income levels, together with a positive growth in the re-export trade, helped to push
the value of imports up by 33.4 per cent to reach Dh735.70 billion.
Setting up a company in one of the numerous UAE Free Trade Zones (FTZs) can
be an attractive option for foreign investors and businesses alike. Infact All
seven Emirates already have and are developing more such economic zones. All
because free zones contribute and stimulate the economy by attracting foreign
direct investment, generating thousands of jobs, stimulating non-oil exports,
encouraging the setting up of ancillary industries, and helping in the transfer
of knowledge, expertise and technology to United Arab Emirates.
The exceptions are free zones, where foreign companies can have 100 per cent ownership. The general incentives offered by the UAE Free Trade Zones are more or less
the same. All grant up to 100% foreign ownership, complete exemption of
taxes from customs & commercial levies, full repatriation of capital &
profits, & extended leases. They also have a minimum of red tape & quick
approval procedures. Thus, keeping the engine of industrial
diversification rolling by attracting a foreign investment in the
private sector is central to the region's overall plan to reduce its
economic dependence on oil, while creating employment for its nationals.
The major advantages in operating in a free zone are:
100% foreign ownership of the enterprise
100% import and export tax exemptions
100% repatriation of capital and profits
No corporate taxes for 15 years, and can be renewed for an additional 15
No personal income taxes
Less documentation, mostly in English
Assistance with labour recruitment, and additional support services such
as sponsorship and housing.
An independent Free Zone Authority governs each free zone and is responsible for
issuing Free Trade Zone operating licenses and assisting companies with
establishing their business in the free zone.
Each free zones have specific requirements, but general steps involved are:
Application Form from the relevant Free Zone Authority to assess a
Forms for License, planning documents, and a consumer request for
Provisional approval and lease agreement.
Meetings with the Free Zone Authority to finalize details of the project.
In UAE we also have, established strategic frameworks for increasing the number
of small- and medium-sized businesses called Special Economic Zones.
Zones Corp, The Industrial City of Abu Dhabi and Khalifa Port and Industrial
Zone are part of the Abu Dhabi SEZs
Dubai Industrial City, Dubai Multi Commodities Centre (DMCC), Dubai
International Financial Centre (DIFC) and the various entities under Tecom
Investments such as Dubai Internet City, Dubai Media City, Knowledge Village,
Dubai Studio City, and Dubai International Academic City can be classified as
The Emirates Industrial City also falls under the SEZ category.
Moreover, the Free Zones could prove to be the mechanism not only for a
new impetus to diversification, but also for changing the very face of
industrial activity in this region.
In the field of industrial development during the last decade, there has
been a quantum jump in everything that the UAE has been doing & aims at
doing in the near future. The most significant of all the success
stories of remarkable achievements is the one about the Free Zones.
The UAE has become an important destination for investment and this is
due to the Free Zones. From start to finish
Universal Consultants JLT will work with you to handle your free zone
We give strategic inputs, help you evaluate and select free zones, work
with you on your business plan, handle paperwork and documentation