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Sun 15 Apr 2018 02:48 PM

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How free zones help power the UAE economy

The recent AIM Summit in Dubai focused on the benefits of free zones for foreign direct investment

How free zones help power the UAE economy

How important are free zones to global trade?

Very. There are now more than 3,500 Special Economic Zones or Free Trade Zones located in 130 countries and, taken together, handle around $3.5tr worth of exports annually, according to Organisation for Economic Cooperation and Development (OECD). When compared to a total global export figure of $15.46tr, that means 22.63 percent of all exports originate in a free zone. More than 66 million people are employed by companies registered within free zones.

What’s that in Middle Eastern terms?

As a whole, the Middle East handles $552bn worth of exports from its free zones. Dubai alone handled AED434bn worth of goods – fully a third of the AED1.3tr worth of foreign trade – in 2017. Exports from UAE’s free zones amounted to AED225.5bn ($61.39bn) in 2017, which is a growth of 6.6 percent from the previous year according to the UAE Central Bank. That equates to 19.5 percent of the country’s total exports during the past 12 months.

How many free zones are in the UAE?

The UAE has among the highest number of free zones in the world and there are 45 right now with another 10 under construction. Of those, 30 are in Dubai. In fact, the World Free Zones Organisation (World FZO) was launched in Dubai in May 2014 by 14 founding members under the auspices of Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

What are their key advantages?

The word “free” here essentially means “free from normal regulation”. Free zones in the UAE offer foreign investors 100 percent ownership in companies registered within them, no corporate taxes, no import and export duties, 100 percent repatriation of revenues and profits, reduced documentation and smoother recruitment and visa processes for employees.

Which is the biggest?

Dubai Multi Commodities Exchange (DMCC), which was named the world’s top free zone for third year running by the Financial Times’ fDi magazine, is home to 13,700 companies and contributes a staggering 10 percent of Dubai's GDP.

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