The Effect of Free Zones on Dubai’s Economy
After transforming from a town surrounded by endless miles of desert, Dubai is now one of the world’s best business destinations for startups, investors, entrepreneurs and corporations.
A key factor behind this change has been the introduction and development of Free Zones by the government in Dubai and across the UAE. Free Trade Zones were created to stimulate the expanded economy growth of the country. By creating a favorable environment in these Free Zones and some great incentives for international businesses to come and work in the UAE, Dubai attracted thousands of companies from all around the world.
Simply put, a Free Zone is a separate business area that is located near a port or a significant trading hub and is not governed by the laws and regulations applied to resident companies in the UAE. Its purpose is to enable the easy setup of businesses, which is an element that attracts foreign investors and businesses.
Each Free Zone in Dubai is subject to its own Free Zone authority. With over 22 designated Free Zones for sectors ranging from healthcare to biotechnology, Dubai has the highest number of Free Zones companies in the UAE. With such a large number of Free Zones operating in varied sectors, investors get to enjoy a range of benefits, including cost and infrastructural benefits.
The 4 main benefits when starting a business in one of the UAE Free Zones:
- 100% foreign ownership
- 100% repatriation of capital and profits
- 100% import and export tax exemption
- 100% exemption from income and corporate taxes