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Free Zones In The UAE

Oneworld MidEast
07 July, 2016

FREE ZONES IN THE UAE

A free zone (FZ) entity in the UAE offers many tax and business possibilities. The establishment of free zones (FZs) in the UAE has been one of the most significant and promising initiatives pursued to attract foreign investment. Dubai was the first emirate to establish a FZ in Jebel Ali.

The main advantages of being located in a FZ are set out below:

  • 100 percent foreign ownership
  • no corporate and personal income taxes
  • eligibility for benefits of 80 UAE's double tax treaties
  • issue of residence permits and tax residence to expatriate owners and managers
  • no restrictions on profit repatriation
  • no exchange controls
  • availability of offices, factory premises and warehouses
  • excellent port, airport and road transport infrastructure
  • efficient utilities and communication means
  • no import or export duties, except for sales made from FZ into the UAE and the GCC
  • no recruitment restrictions and assistance in obtaining work permits for expatriate staff

Location of FZ

An independent free zone authority governs each FZ. The rules and regulations of each FZ do not differ substantially, all being simple yet comprehensive. The UAE Companies Law is not applicable in the FZs.

Dubai

Dubai has witnessed significant growth in the number of free zones. Each zone has a focus on a particular type of industry. The names and industry focus of the major free zones within Dubai are listed below:

  • Jebel Ali free zone: manufacturing, heavy industry and distribution. It also encompasses:
    • Dubai Cars and Automotive City (DUCAMZ) free zone: re- export of automobiles
    • Dubai Gold and Diamond Park free zone: dealing in precious metals and stones
  • Dubai Airport free zone (DAFZ): light industry, distribution, service industries including insurance
  • Dubai Technology and Media free zone includes:
    • Dubai Internet City: information and communication services
    • Dubai Media City: media related business
    • Knowledge Village: education and learning establishments
  • Dubai Multi Commodities Centre (DMCC): aims to attract the world's leading precious metals, jewels and commodities traders. This zone also includes a manufacturing facility and a diamond trading bourse
  • Dubai International Financial Centre (DIFC): focuses on financial institutions and financial services firms and has elevated the UAE to the position of a leading financial centre. The zone is subject to a comprehensive regulatory regime that follows international standards. The regulatory authority in the DIFC is the Dubai Financial Services Authority (DFSA)
  • Dubai Healthcare City: aims to attract providers of healthcare, medical education and research
  • Dubai Maritime City: aims to attract companies engaged in vessel design, manufacture, repair and maintenance and marine management and related services

Other free trade zones in Dubai include Dubai Aid and Humanitarian City, Dubai Techno Park, Dubai Auto Parts City, Dubai Textile Village, Dubai Heavy Equipment and Trucks, Dubai Industrial City (DIC), Dubai Flower Centre, Dubai Logistics City, Dubai Silicon Oasis, Dubai Studio City, Dubai Carpet free zone and Dubai Outsource.

Abu Dhabi

  • Abu Dhabi free trade zone (ADAFZ): the objective of this free trade zone is to establish Abu Dhabi as a major bulk commodity trading base to initiate the development of other existing industrial zones in the emirate Newsletter
  • Higher Corporation for Specialized Economic Zones (HCSEZ): the HCSEZ establishes specialized economic zones across a range of industries in Abu Dhabi. The benefits of the zones are similar to those in free zones
  • Industrial City of Abu Dhabi: the objective is for industrial projects
  • Abu Dhabi Global Market (ADGM): Recently set up, it is a broad based international financial centre of local, regional and international institutions. As in the case of the DIFC, an elaborate and comprehensive regulatory regime is in place that follows international standards

Sharjah

  • Hamriyah free zone: established in Sharjah, this free trade zone caters to industrial, manufacturing, processing and assembling industries. Sharjah is the only emirate with ports on the Arabian Gulf's east and west coasts with direct access to the Indian Ocean
  • Sharjah Airport International free trade zone: aims to capitalize on Sharjah's excellent access to both east and west by attracting light manufacturing, storage and distribution business together with services industries

Ras al Khaimar (RAK)

  • Ras al Khaimar free trade zone: set up in 2000 on Al Hulayla Island, this free trade zone aims to attract all types of investment with an aggressive marketing plan, intending to turn this zone into the leading free zone of the northern emirates
  • Ras al Khaimar Media free zone: media related business

Fujairah

  • Fujairah free trade zone: located near Fujairah Airport, it attracts manufacturing, distribution and general trading industries

Ajman

  • Ajman free trade zone: attracts all types of business from heavy manufacturing to professional service companies

Umm al Quwain

  • Umm al Quwain free trade zone: it is known as the Ahmed Bin Rashed Port and Free Zone and caters for light industrial development

Type of licences

To operate in a FZ, all businesses need a licence. The type of licence depends primarily on the nature of the activity undertaken. Generally, in most FZs a combination of the following types of licences are available to the foreign investor:

Trading licence

This enables companies to carry out general trading activities as specified in the licence

Industrial licence

This licence is required for the manufacture of products

Services licence

A services licence is necessary where the activities undertaken are of a services nature

Oneworld MidEast Ltd

Oneworld MidEast ltd (OME) is rendering a wide range of fiduciary and business services to our international clientele. We provide clients the whole spectrum of corporate structures – offshore, free zone, mainland and specialized entities – depending on each client's circumstances and targets. Free zone and mainland entities benefit from an extensive UAE tax treaty network and offshore are easy to set-up and flexible to use.

If you are interested in setting up a Free Zone the first step is to contact us for a complimentary consultation at info@oneworldmideast.net.



About the Author


Oneworld MidEast

Oneworld MidEast can offer your business, start up or established the support you need to plan for the future and take make your goals reality. We are a team of specialist staff with extensive experience in international tax planning, corporate planning and support, financial reporting, management consultancy. www.oneworldmideast.net

 

 

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