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Dubai: E-Commerce

Internet City

Dubai Internet City, the MENA region's largest IT cluster, and Dubai Outsource Zone (DOZ), the world's first freezone dedicated to the outsourcing industry (see below), announced growth of 15% as 160 new companies registered in the business parks throughout 2012. The continued development and growth of DIC and DOZ falls in line with the vision of H.H Sheikh Mohammed Bin Rashid Al Maktoum of developing the emirate as a global hub for the technology industry which is set to continue into 2013.

Key sectors that saw new additions within Dubai Internet City in 2012 include internet and multimedia software, telecommunication and IT services. More than 60 business partners including Fortune 500 companies MasterCard, GE, Qualcomm, EMC and Google significantly increased their presence in DIC owing to the high quality of services and infrastructure that DIC provides. Malek Al Malek, Managing Director of Dubai Internet City and Dubai Outsource Zone, said, "2012 was a particularly strong year for our cluster. Not only did we welcome some of the industry's biggest players such as Facebook, LinkedIn and Interglobe, we also saw the expansion of existing partners."

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 US$250 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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