Only quite a short time ago Dubai was a small place surrounded by sand dunes. The introduction of free trade zones and the successful development if such became one of the core factors which changed Dubai to what it is now.
The Free Trade Zones were created to stimulate the diversified economy growth of the country. By creating very favorable environment in such free zones Dubai attracted thousands of companies from different continents. The Free Trade zones offer great incentives for international business to come and work in UAE.
In its simple definition, Free Zone is a specially designated area at a port or some other part of Dubai where certain customs restrictions are not implemented.
Nowadays, there are several dozens free zones in the UAE that offer businessman from all over the world numerous benefits as below:
- 100% Foreign Ownership – when you are a Foreign Investor, it would be a relief to know that you can have the full ownership to your business instead of sharing a certain percentage to a Local Citizen ( as in the case of Local Companies ).
- Exemption from Import and Export Duties - For Trading Companies, being exempted from Import and Export Duties is of great advantage as their business, otherwise, would require payment of different customs duties.
- 100% Repatriation of Capital – Investors aim to maximize the return in their investment. Registering a Free Zone Company would allow the investor/shareholder to have 100% of the returns on investment to be sent anywhere he wants without any limitations from the UAE side.
- No Income/Corporate, Import and Export Taxes – One of the most special features of a Free Zone Company. While other companies struggle to pay high corporate tax rates, UAE Free Zone Companies do not have and tax liabilities of whatever kind.
As for these benefits, more and more businessman come to UAE to put up a business in UAE. Stability of UAE’s economy was also a factor why investors are not hesitant to spend a huge amount of capital for doing a business in the UAE.
Foreign investors play a vital part in boosting the economy of the UAE. Because of foreign investors, more and more jobs are looked-for and thus requires additional workforce. Aside from the financial contribution, foreign investors also share significant knowledge in terms of the latest technology used in conducting business in their home country. Effective systems used in business is also contributed by Foreign Investors in which UAE is directly benefited.
Logically speaking we can derive a simple formula for this situation as below:
- Free Zone Company Registration Option + Stable Economic Status = Investment Opportunities
- Investors + Latest Technology and Systems Knowledge = Economic Progress
Over the past years, we have seen the remarkable growth in UAE’s Economy. Initially , UAE relied primarily on their main product of oil and gas exportation, but nowadays key industries as Tourism, Construction and Engineering, Real Estate, Banking and Finance are considered as industries that lift UAE’s economy to be on top.
UAE Government’s incentive to offer Free Zone company registration to attract foreign investors can be considered as a factor for UAE’s success as of today and as a huge success of the UAE economy as the whole.