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- Dubai Internet City
- Dubai Internet Activities in
Dubai
Dubai accounts for almost 60% of e-Commerce spend
in the GCC according to a review brought out in
2011 by Visa and Interactive Media in Retail Group
International, an industry body for global e-Retail.
The report shows that total business to consumer
e-Commerce sales in the UAE are estimated to have
grown to almost USD2 billion in 2010, equivalent
to approximately 55-60% of total GCC e-Commerce
sales estimated to be between USD3 and USD3.5
billion. They are expected to reach USD5 billion
by the end of 2011.
Dubai has made major efforts to establish itself
as an e-commerce hub, and according to a study
carried out by Dubai Media City-based Madar Research
Group in late 2002 was at that time on a par with
top European Union states in basic online services.
Dubai scored 76 points out of 100 in the benchmark
test that measures the services' online availability
and the level of that availability - whether a
service could be fully completed and transacted
through the Internet. The test covered 19 public
services - nine for businesses and 10 for individual
users - which were considered most essential,
or are most commonly used by companies and the
general public in Dubai.
In January 2007, Dubai International Financial
Centre announced that it had issued an enhanced
Data Protection Law and appointed a Data Protection
Commissioner to oversee its administration by
the DIFC Authority. Both moves were designed to
consolidate international best practices already
being adhered to by the DIFC.
The Data Protection Law, ensures the protection
of all personal information, including any sensitive
personal data, and is compliant with the provisions
of the laws and directives of the European Union
and the guidelines of the Organisation for Economic
Co-operation and Development (OECD), including
on the transfer of data.
Commenting on the new law, Omar Bin Sulaiman,
Governor of the DIFC noted that: "in our
era of globalisation, when information has never
been more readily available and transmittable,
it is crucial to establish effective data protection
regimes and enforce legal safeguards against the
misuse of personal data. At the DIFC, we are committed
to upholding and continuously improving upon the
highest standards in this regard.”
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Dubai Internet City
Reports in early 2012 suggest Dubai Internet
City is attracting around 14 new investors per
month. In a recent interview, Malek Sultan Al
Malek, Managing Director of Dubai Internet City
and Dubai Outsource Zone, commented: "Last
year, 169 new companies registered with us despite
the economic downturn. This reflects the resilience
in the information and communication technology
(ICT) sector. Throughout the last decade we have
managed to create a vibrant ICT cluster that is
growing."
In February 2000, Dubai's then ruler Sheikh Maktoum
bin Rashid al-Maktoum issued a decree setting
up a free-trade zone for electronic commerce and
technology.
The decree established an independent body, the
free zone authority headed by Crown Prince Sheikh
Mohammed bin Rashid al-Maktoum, which would operate
under the Dubai government to spearhead the emirate's
drive to become a regional centre for electronic
commerce, technology and information.
For the full text of the decree, see "Dubai
Technology, Electronic Commerce and Media Free
Zone Law No. (1) of 2000".
The free zone authority oversees the establishment
of the necessary infrastructure at the zone, licenses
companies wishing to set up shop there and leases
land and property to them for up to 50 years.
The authority also runs the zone, and levies fees
for its services. Companies are allowed 100 per
cent foreign ownership in the zone. Goods imported
to the zone and products for export are exempt
from custom duties and companies are exempt from
taxes, including income tax.
Companies can choose to incorporate in one of
three ways:
- Branch of Foreign Company;
- Branch of UAE-based Company (including other
UAE Free Zone licensees);
- Free Zone Limited Liability Company (FZ LLC).
Submission of the License application form can
be done electronically through the Dubai Internet
City site.
The physical location of the Internet City is
on Sheikh Zayed Road, next to the American University.
DIC highlights include:
- World class technical infrastructure: high
bandwidth, low cost telecom infrastructure and
secure, high speed support infrastructure;
- State-of-the-art urban infrastructure: cost
competitive, flexible office space and world
class housing, medical and education facilities;
- Access to talent pool: large pool of high
skill, low cost knowledge workers;
- Straight-forward laws and regulations: easy
and fast company registration laws, hassle-free
immigration process and straight forward legal
procedures;
- Supportive environment: Government backed
e-business initiatives, business incubators,
venture capital funds and e-education programs;
- Gateway to markets: access to regional markets
in Middle East, North Africa, Indian Subcontinent
and CIS.
In September 2000 Dubai officials announced that
more than a hundred information technology companies
had been granted licences to operate in the City.
The companies, which included industry giants
Microsoft, Oracle and Compaq, were investing USD250
million in the technology, e-commerce and media
free zone, DIC director-general Mohammed al-Gergawi
said at a press conference. Another 350 firms
were awaiting approval, he said. By mid-2004,
the number of companies operating out of the DIC
had risen to more than 500. This number had risen
to almost 1,000 by October 2007, when the DIC
notched up its seventh-year of operation.
A further 112 companies chose to locate their
operations in the DIC in 2007, representing 33%
annual growth. The new entrants include global
companies such as British Telecom, Qualcomm, Google,
Layton International, Telecom New Zealand, Dimension
Data, Logo Business Solutions and VeriSign, top-tier
names in the ICT sector.
Celebrating its fifth anniversary in 2005, the
DIC authorities revealed that as part of the Internet
City's 'Going Global' mission, they were in talks
with authorities in India, Pakistan, Iran and
Malta to set up facilities in various cities.
In June, 2004, Dubai Internet City announced
the Dubai Outsource Zone (DOZ), the world’s
first ’free zone’ dedicated to the outsourcing
industry. The announcement was made by Dr. Omar
Bin Sulaiman, CEO of Dubai Internet City at Europe’s
biggest conference on outsourcing, Outsource World
held in London.
Dubai Outsource Zone provides a comprehensive
infrastructure and environment for outsourcing
companies to set up global or regional hubs servicing
the worldwide market. DOZ’s offering includes
100% exemption from taxes, arguably the world’s
most reliable technology and communications infrastructure,
a one-stop shop of support services and the best
possible working environment.
Dubai Outsource Zone provides a base for companies
wishing to provide mid- to high-end IT and business
process outsourcing (BPO) services. Some of the
key sectors targeted include finance, accounting,
IT, payroll processing, healthcare, insurance,
engineering, biotech, multimedia, R&D and
design. DOZ also serves as a centre for disaster
recovery facilities for call centres located offshore
elsewhere in the world. The Zone offers facilities
both to ‘captive’ BPO operations, ie.
companies who have their own offshore BPO facilities,
and to third-party BPO service providers, from
Europe, the US, the Middle East, Asia and Africa.
“Having established vigorous growth in the
ICT industry, we are now seeking to transfer that
momentum to new high-growth sectors like Outsourcing,”
said Dr. Omar Bin Sulaiman, CEO of Dubai Internet
City. “We had been studying the outsourcing
sector for a long time to design the perfect combination
of services that will provide value to the global
and regional outsourcing industry. At the heart
of the Dubai Outsource Zone concept is a commitment
to offer relevant facilities to global companies
to enable them to create an effective globally
distributed delivery model. DOZ will go a long
way in strengthening Dubai’s status as a
knowledge-economy hub,” he added.
“The establishment of DOZ and the expected
growth of the outsourcing industry will bring
in several economic benefits for the UAE and the
region,” said Dr. Bin Sulaiman. In the UAE
alone, apart from the infusion of talent from
other countries, it will to provide a significant
boost to the development of the country’s
own human capital. The industry promises several
opportunities for fresh graduates to gain valuable
exposure in various emerging sectors of the economy
through both full-time and part-time employment
opportunities,” he concluded.
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Dubai Internet Activities
Whether or not because of
the rapid construction of the Internet City, many
Internet and e-commerce applications have appeared
rapidly in Dubai in recent years. Some examples
are as follows:
- Magrudy's Bookshop, a subsidiary of Magrudy
Enterprises L.L.C., was the first book shop
in the Middle East to provide secure e-commerce
services to a global market over the Internet.
- Emirates Bank Group announced that it would
be the first Bank to open a branch at the Dubai
Internet City. The Branch offers all the traditional
banking services to the major corporations that
have located in the City, as well as offering
its portfolio of existing and upcoming electronic
banking facilities.
- Dublin based Misys International Banking
Solutions announced in November 2001 that it
would be providing online banking solutions
to one of Dubai's leading online financial services
providers. CashSwitch confirmed that it had
licensed the solution to make internet banking
more accessible for customers and more cost
effective for banks throughout the Gulf region,
and revealed that as a result of the new alliance,
it will be able to act as an Application Solution
Provider (ASP), or to directly license Misys'
Fontis iBanking platform to Middle Eastern banks.
The package offered by Misys aims to allow banks
in the offshore financial centre and throughout
the region to offer customers improved online
facilities, including account management, transaction
enquiries, and secure fund transfers.
- The European Union's imposition of VAT (Value
Added Tax) on transactions conducted over the
internet in July, 2003, led web hosting firm
Emirates Internet and Multimedia to attract
firms from within the UAE to use its online
services. "Many companies throughout the region
have traditionally hosted overseas, in the US
or Europe," said Maroua Naim, general manager.
"Besides the obvious problems this creates due
to time and physical boundaries that hamper
effective technical support, the additional
VAT charges of hosting abroad are also becoming
a concern," he observed. All firms participating
in the programme are supplied with free registration
on the '.ae' domain for the duration of a year.
- In late January 2006, it emerged that chip-maker,
Intel had signed an agreement to move its Dubai
offices to the DIC. “Intel is moving its
offices to Dubai Internet City because it offers
a strategic platform to tap new opportunities
in this fast-growing market,' explained Gordon
Graylish, Intel Vice President of the Sales
and Marketing Group, and General Manager for
Europe, the Middle East and Africa (EMEA), adding
that: “This will help our Dubai team to
be closer to many of our fellow travelers in
the region as we continue to work with them
to develop our business and play a role in growing
the IT sector here”.
- In May 2008, Verizon Business announced plans
to open an office in Dubai Internet City to
further strengthen the company’s service
and support capabilities across the Middle East.The
office will provide a base for the company’s
ongoing regional expansion plans.
The Dubai Government itself has been very active
in encouraging e-commerce, and announced in early
2002 that its e-Government initiative would broaden
its focus in order to take in expatriates from
the United Arab Emirates placed overseas, and
students from the region studying abroad.
Speaking at a presentation for UAE students studying
at Bahrain University, Salem Al Shair, the e-Government
initiative's Director of e-Services explained
the rationale behind the new drive for expatriates.
"Young national students who are residing
overseas often need important information, legal
documents or urgent government assistance from
their home country. By offering integrated e-services
through the portal...Dubai e-Government is opening
a 24 hour communication channel that will facilitate
the lives of students [and expatriates]."
The Dubai e-Government portal currently offers
a wide range of services for visitors, residents,
and businesses, including access to permit and
visa renewal services, commerce and business related
facilities, and company registration and tax department
links.
In March 2005, global logistics firm DHL announced
a joint venture with the Dubai customs authorities
that would see the creation of an electronic customs
clearance system designed to streamline procedures
and improve general business efficiency in the
United Arab Emirates and beyond.
The e-clearance project resulted in the complete
digitisation of all customs clearance procedures
which, according to UAE Customs and Gateway Manager
Derek Tully, speaking at the time of the launch,
was intended to reduce shipment transit times
by up to 24 hours.
“By implementing this new procedure, DHL
UAE is helping Dubai increase its customs efficiency
which will, as a direct knock on effect, increase
productivity for regional businesses and customers,”
observed Mr Tully.
“Dubai Customs has been highly receptive
to the concept as it highlights Dubai's growing
initiative to be the region's leading logistics
and business hub,” he added
See Offshore-e-com.com
for an extensive analysis of the commercial possibilities
of the Internet and the legal background.
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