How Freezones Affect Dubai’s Economy

Dubai today is one of the world’s best business destinations for entrepreneurs, investors, startups and corporations. This transformation is incredible considering that not so long ago, it was a dusty town surrounded by miles of desert.

One of the key factors behind this change has been the introduction and development of Free Zones by the government in Dubai and all across the UAE. In simple terms, a Free Zone is a separate business area that is located near a port or any significant trading hub and not governed by the laws and regulations applied to resident companies in the UAE. Its purpose is to facilitate the easy setup of businesses – an element that attracts foreign investors and enterprises.

The Benefits for Investors

Each Free Zone in the UAE is subject to its own Free Zone Authority, and Dubai is no different. The city has the highest number of Free Zones in the UAE – there are over twenty-two designated Free Zones for sectors ranging from healthcare to biotechnology and multimedia to logistics. With such a large number of Free Zones operating in diverse sectors, investors get to enjoy a range of benefits:

Cost benefits

  • 100% foreign ownership – which means full control of business activities
  • 100% repatriation of capital
  • Exemption from import and export duties – a boon for trading companies who would otherwise be required to pay different custom duties
  • No tax on corporate gains or personal income – except for individual cases, investors are guaranteed zero tax liability
  • No currency restrictions
  • Reduced cost of operations

Infrastructural Benefits

  • Pre-built offices, factories and warehouses – companies can choose packages to suit their requirements
  • Fast-track company setup and licensing procedures
  • Single window clearances and one-stop administration services
  • Assistance with labour recruitment as well as additional support services, such as sponsorship and on-site housing
  • Abundant and inexpensive energy
  • Transportation networks for the road, sea, and airways
  • Quality infrastructure and communications
  • Attractive work environment
  • Capacity to operate 24 hours a day

The Benefits for the Economy

Thanks to the above advantages, foreign investors are willing to pump huge amounts of capital into Dubai. The benefits for the economy are multifold.

  • More Job Opportunities
    More jobs are created at all levels, facilitating a growing workforce.
  • Competitive Wages
    More job opportunities lead to a growing demand for skilled workers. Dubai’s liberal labour policies make it straightforward and cost-effective to recruit employees from any part of the world.
  • Latest Technology
    Apart from capital, foreign investors also contribute the latest technology that is used in their home countries, accelerating technological progress.
  • World-Class Systems
    Foreign capital combined with the latest technology creates world-class, efficient business systems and infrastructure.
  • A Stable Economy
    After the setback of the 2009 recession, Dubai has bounced back in the succeeding years. Part of the credit goes to the Free Zones and their focus on diversifying from the oil and gas industry.
  • A Culture of Excellence
    The above elements have combined to create a culture of excellence that permeates every aspect of business and life in the region. Dubai is one of the most preferred expat destinations for its high rate of growth, levels of safety and quality of life.

If you’re looking to expand to Dubai, we have the team to help. As the approved agents for Dubai Airport Free Zone (DAFZA), we will support your free zone business setup in Dubai without hassles.

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