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Tue 31 Oct 2006 08:00 PM

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A guide to setting up in free zones

Mark Hill of The Rights Lawyers looks at some of the latest trends available to media and production companies setting up in the various free zones in the UAE

If someone were to drop by my office and ask me where I would recommend setting up their new media or production company, without a shadow of doubt, Dubai Media City (DMC) would be on the list. The model followed here is a time tested one, perfected (well, nearly!) over the years through trial and error. And it may not be entirely wrong to say that the DMC has become a victim of its own success. I say this because new applicants are always faced with the lack of office space available in DMC for the next eight to nine months. The good thing remains that procedures for setting up here are well defined.

DMC has basically two kinds of set-up options. The first one is the Media Business Centre, where there are desk spaces with visa entitlement for up to two and glasshouse executive offices which can seat up to six. These are intended as a start-up option for freelancers and small companies so that they may be able to proceed to larger offices once business picks up. The second set-up option is in the commercial offices where floor areas start at roughly 800 square feet.

For a while now, the International Media Production Zone (IMPZ) and Dubai Studio City (DSC) have been operating as extensions of DMC. The IMPZ caters exclusively to the printing, publishing and packaging industries. Interestingly enough, applications for set-up in the IMPZ are routed via DMC, which means that the application would first be submitted to DMC and depending upon the contents of the business plan, DMC would bounce that into IMPZ. IMPZ is a promising project involving about 43 million square feet of land and over US $500 million worth of investment.

If you are looking to set up production facilities or a broadcasting company and you approach DMC, chances are that you will be referred straightaway to DSC. DSC is again an ambitious project involving about 22 million square feet of office space and has within itself production, post-production, equipment rental, business centre and satellite facilities amongst several others.

Now the core model followed by DMC is one of ensuring adequate networking opportunities and a networked environment where individuals and companies engaged in roughly similar lines of activity get to meet on a work side by side, share ideas and mutually benefit from this interactive process. Other free zones in the UAE, for example the Ajman Free Zone, Ras Al Khaimah Free Trade Zone (RAKFTZ) and Fujairah Free Zone (FFZ), have a slightly different approach in that they are not industry focused in the kind of business partners they accept into their zones. In these zones, it may not be altogether impossible to find an import-export house situated right next to a TV production company.

In terms of geographical proximity, the closest option to DMC is RAKFTZ, which is just about an hour's drive from Dubai. RAKFTZ has its own Business Centre which is, interestingly enough, located on the seventh floor of the Fairmont Hotel in Dubai. Various facilities are provided, in kind of a one-stop shop fashion. This has closely emulated the structure of DMC's Business Centre. RAKFTZ also has a Promotion and Innovation Centre located inside the building of the Twin Towers in Deira in Dubai which provides some pretty useful services such as advice regarding the options and facilities for as well as personal assistance in setting up companies in the Free Trade Zone and providing customer service points for the convenience of existing RAKFTZ clients. On 3 January 2006, RAKFTZ made headlines when it announced the creation of the Ras Al Khaimah Media Free Zone (RAK Media City) and a Film City and made no bones about competing directly with the likes of DMC. Unfortunately, the pace of progress has been slow and few concrete details are available. A space to watch out, nevertheless.

The FFZ is another option, which has one of the fastest (claimed!) set up time in any of the Free Zones (48 hours, actually!). It even has an online application process. However, in order to submit all the documents and make payment of necessary fees before the set up can be completed, one would to need to visit the Free Zone office. As if on cue from the other emirates that have been bounding ahead with grabbing their share of media companies wanting to set up here, FFZ announced a while ago that it was creating a Media Free Zone covering radio stations, TV channels and the publishing industry. The pitch seems to be that this Zone is a cost effective alternative to DMC. But again, very little progress seems to have been made on the ground.

Looking overseas but still within the region, one runs head on into the Egyptian Media Production City, which has created ripples in the film production industry in the recent past. Perhaps some of the hoopla has to do with the location of the City itself, what with it being a mere 10 km away from the legendary Pyramids of Giza and 30 km away from Cairo. The City covers a total area of some 2 million square metres, with another million set aside for future expansion programmes. The City claims to provide the entire gamut of media production services and offers a blend of incentives such as zero tax, customs duties or tariffs on imports relating to ongoing projects in the City, non-taxing of profits generated by projects and exemption from usual customs procedures for exports of project products. The City also provides some interesting guarantees which it provides investors, such as nonconfiscation or nationalisation of projects and legal immunity, to the extent that prior permission is required from the overseeing authority before being sued in a court of law. There is also a fully functional International Academy for Media Sciences (IAMS) located within the City which aims to provide the region with qualified industry professionals, who can specialise in any of: radio and television, cinema, commercial and marketing, multimedia and the internet. A pioneering initiative, to say the least.

Probably the one of the last destinations deserving a glance is the Jordan Media City (JMC) launched in 2001 as a tax free establishment. Arab Radio and Television (ART) transmits from the JMC to the entire Middle East region and has its whole archive system located at the JMC. JMC today transmits around 120 TV channels. JMC is privately owned and is not run by the government, without any corporate and personal taxation or customs duties.

This a brief run down of location options. Though the Middle East has seeing a recent flurry of activity in the creative industries, the options for media and production companies to set up are increasing too. This can only be good for the creative industries in the region.