How free zones can support your business

The UAE leads the region with the most free zones

The UAE is home to over 45 free zones, the majority of which are in Dubai. Its free zone model is being replicated globally, due to its success in attracting a larger share of trade and FDI than any other comparable programme in the world.

Jebel Ali Free Zone (JAFZA), set up in 1985, was the region's first, and is now one of the world's largest free zones. It is home to over 7,500 companies employing 135,000 people. DMCC (Dubai Multi Commodities Centre) is the largest free zone by number of companies registered.

Dubai free zones' cluster-specific approach groups together similar businesses to create a network of knowledge and expertise in one location, to the advantage of both businesses and users or consumers. For example, Dubai Creative Cluster Authority is home to free zones including Dubai Media City, Dubai Internet City and Dubai Knowledge Park.

Major economic benefits

Free zones in Dubai are special economic areas which have been set up to offer tax concessions and customs duty benefits to international investors.

The main benefits of setting up your business in one of emirate’s free zones include 100% tax exemption on personal or corporate income, 100% ownership for your company regardless of your nationality, 100% repatriation of capital and profits and exclusion from all import and export duties.

And in a recent tax reform programme by the Dubai government, 23 zones have been declared designated zones, exempting them from the standard 5% VAT charge.

The concept has flourished because international companies have been keen to take advantage of the commercial benefits on offer and the city’s proximity to major regional markets.

Which free zone should you choose?

One important point to know when choosing to base your business in one of Dubai’s free zones is that you are not allowed to conduct business or engage in business activities with clients or suppliers in mainland Dubai.

You should also understand the different attributes and nuances of each free zone. For example, if you are in the motor vehicle industry you probably want to look into the Dubai Auto Zone. Alternatively, if your company will be providing logistical services you should consider the Dubai Logistics City free zone, and Jebel Ali Free Zone would be suitable for a shipping company or if ready access to seaports is required.

All of the free zones provide various investment potentials for investors and offer the freedom of doing business in Dubai, substantial tax savings, and a robust infrastructure.

If you need help choosing a free zone, or setting up your business, there are many business consultants in Dubai with the expertise and resources to help your business application go through smoothly. They will take care of your visa application, documentation, and licensing formalities and residence permits.