Free Zones and How they Affect Dubai’s Economy

free zones

With much credit due to Dubai’s Free Zones, today, Dubai is one of the world’s leading business destinations for entrepreneurs, investors, startups and corporations. The city has set the standard for banking and business within the region and, arguably, across the globe. An incredibly impressive accomplishment when you consider the age of this City and its humble beginnings.

One of the key factors behind its success has been the introduction and development of Free Trade Zones (Free Zones) by the UAE government. So, what is a free zone? Basically, a Free Zone is a segregated business district that is ideally located near a port or any other significant trading hub and is not governed by the same laws and regulations that are applied to local companies in the UAE. The purpose of these zones is to help maintain the UAE’s traditional business practices by offering foreign investors and expats an easy option of setting up businesses which they can own 100%. That’s not to say that foreign investors may not own companies in non-free zone areas, but doing so only entitles them to a maximum of 49% ownership, with a local sponsor(s) owning the remaining 51%.

Foreign Investors Benefit From Free Zones

Each of the Free Zones within the UAE is subject to the rules and regulations derived from its own Free Zone Authority, and Dubai Free Zones are no different. Dubai has, by far, the highest number of Free Zones in the entire UAE – there are over twenty-two designated Free Zones for sectors ranging from healthcare to gold trade and multimedia to information technology, there is a zone for every business activity, with many of the Free Zones hosting multiple business activities. Investors will enjoy the following benefits of setting up a company in one of Dubai’s many free zones:

Business Benefits

  • 100% ownership of a Free Zone licensed business by any foreign national
  • 100% repatriation of capital
  • Exemption from import and export duties
  • No tax on corporate gains or personal income guarantee
  • No currency restrictions
  • Reduced cost of setup and operations

 Infrastructure Benefits

  • Serviced offices, factories and warehouses – companies may pick from packages that match their needs
  • Fast-track company formation and licensing
  • One-stop-shop administration services
  • Assistance with labour recruitment
  • Abundant and inexpensive utilities
  • Transportation networks for road, sea and air
  • Modern communications infrastructure
  • Ability to operate 24/7

Benefits to the Dubai Economy

Because of the benefits listed above and an environment which is conducive to business and investment, foreign investors continue to pump large amounts of capital into Dubai. This adds multiple benefits to the economy.

More Job Opportunities
More business opportunities for international investors setting up in Free Zones, at affordable rates, means more jobs become available. Dubai currently benefits from one of the lowest unemployment rates in the world at 0.3%.

Competitive Wages
Dubai’s liberal labour policies make it straightforward and cost-effective to recruit employees from any part of the world.

Latest Technology
Additionally, foreign investors implement technology that is used in their home countries, accelerating local technological progress.

World-Class Systems
World class resources create world-class business systems and infrastructure in Dubai.

A Stable Economy
After the setback of the most recent GFC, Dubai has bounced back with increased stability. A portion of the credit for the recovery can go to the Free Zones and their focus on diversifying from the oil and gas industry.

A Culture of Excellence
The above elements combine to foster a culture of excellence that is applied to every aspect of business and life in the region. Dubai is the world’s most popular expat destination for its consistent growth, financial security, safety and quality of life.

If you’re looking to expand to Dubai, we have the team to help. As the approved agents for multiple Dubai Free Zones, we are able to quickly assist you in your company formation requirements. Contact us to speak with a consultant today.

Zola Group offers holistic corporate services to local and global business clients. Our most popular comprehensive services include company setup, incorporation, residency and banking services. Contact our professional corporate services consultants via phone or email to inquire about how we can help you achieve success in this region's most rewarding emerging market.