Space for All

There are over 20,000 companies spread across 21 free zones operating in Dubai, with nine more zones under construction. These zones offer a wide range of incentives, with each one designed around a specific business idea, such as healthcare, automotive, or gold. All the zones come under the jurisdiction of the Free Zone Authority. It is also this authority that issues the licenses to foreign-owned companies that wish to set up in the zones. Each zone has unique incentives that are advantageous to its field, although the most common enticements across all the zones are 100% import and export tax exemption, 100% repatriation of capital and profits, no corporate tax for 15 years with the option to extend this for a further 15 years, no personal income tax, purpose-built offices and warehouses, and 100% foreign ownership. Some of the largest zones are the Jebel Ali Free Zone, Ras Al Khaimah Free Trade Zone (RAK FTZ), Sharjah Airport International Free Zone, Dubai Airport Free Zone, Dubai Media Zone, and Dubai Internet City.

The largest by number of companies is Jebel Ali Free Zone (JAFZA) with more than 6,400 registered companies, including over 120 Fortune Global 500 enterprises. The flagship economic zone was established in 1985, and it is one of the fastest growing in the world. JAFZA offers the potential to access a market of over 2 billion people in the greater Middle Eastern region, and offers office units, warehouses, light industrial units, and business centers, as well as hotels, and build-to-suit options on a long-term lease basis. Since 2008, JAFZA has increased its customer base by 60% and its revenue by an average of 34% year on year. Overall, the zone also contributes 25% to Dubai’s GDP and sustains more than 160,000 jobs in companies throughout the UAE. A large part of the success of JAFZA has been its proximity to Jebel Ali Port. The zone produces 50% of Dubai’s total exports and accounts for 25% of all containers at the port, and 12% of all freight through Dubai International Airport.

Another large zone is RAK FTZ. Established in 2000, it is one of the fastest growing zones in the country, as well as the most cost effective with 5,000 plus active companies registered within the zone. In 1H2013, it reported a 70% year-on-year increase in new companies registered, with a record breaking 1,994 signing up; a considerable increase on the 1,170 in the same period of the year before. RAK FTZ also posted 17% growth in the number of renewed licenses, rising from 2,298 in 1H2012 to 2,696 over 1H2013. RAK FTZ is quickly becoming the preferred business hub for the region because of its affordability, flexibility, and broad geographical reach. Peter J. Fort, CEO of RAK FTZ, told TBY that, “The formula of our success is simple; we offer the same highly attractive advantages as any other free zone in the UAE, including 100% foreign ownership, a zero tax regime, wide access to a qualified labor force, and a stable and secure environment”.

Economic free zones are an integral part of the UAE’s economy now, and are becoming major hubs for trade and business, not just in Dubai, but throughout the region as well.