Dubai free zones saw their total trade volumes grow by 22% year-on-year in the first nine months of 2018, according to the Dubai Free Zones Council.
Free zone trade topped $107 billion (AED 394 billion), making up 41 percent of Dubai’s total trade during the period, said the authority which oversees the emirate’s 24 free-trade areas including Dubai Media City, Dubai International Financial Centre (DIFC), Jebel Ali Port zone and others.
China ranked first as Dubai’s most significant free-trade partner with a total trade volume of $16bn (AED59bn) during the time period, following by Saudi Arabia with $9.3 billion (AED34.2 billion) and India with $9.2 billion (AED 34 billion).
The free zones generated 31.9 percent of Dubai’s GDP, with imports totalling $58.5 billion (AED 215 billion) and exports and re-exports totalling $49 billion (AED 179 billion)
“Free zones are important economic hubs and centres of foreign direct investment that are poised for growth and expansion in the years ahead,” said Sheikh Ahmed bin Saeed, chairman of the Dubai Free Zones Council.
“Dubai’s economy relies on the free zones’ efforts to diversify the national economy and expand non-oil business in line with the Dubai Plan 2021, which aims to elevate the emirate’s global status and establish it as a major contributor to the global economy,” he added.
Sheikh Ahmed also said the rise in free-zone trade is partly due to promotional efforts aimed at attracting more foreign direct investment to Dubai. This summer saw several free zones reduce their registration fees for new businesses, while the government relaxed regulations and lowered the cost of doing business.
FDI in Dubai rose 26 percent in the first half of 2018 to $4.84 billion (AED 17.76 billion), with the number of FDI projects growing 40 percent to 248, according to the Dubai Investment Development Agency at the Department of Economic Development.
Over 41,000 companies employing more than 354,000 people operate in Dubai’s free zones, the council said.
In May this year, Dr Habib Al Mulla, chairman of Dubai law firm Baker & McKenzie, said UAE free zones which offer foreign companies full possession without a local partners will ‘struggle to survive’ under the new 100 percent ownership law as the legislation set to be introduce in Q3 this year will weekend their bestselling proposition.
“If I was now a director of a free zone, I would be concerned. I will immediately think of the cost I am charging my tenants, I would think of my process and procedures, I will try to make it easier, maybe move to an online portal with my processes. I will need to give the investor something that they will not find on the mainland. Otherwise, it will be an issue for them,” he told Arabian Business at the time.
He added that while some free zones will survive on logistics and goods, others will convert to specialised districts.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.