A Review of Free Zones in Dubai

Free Economic Zones (or simply Free Zones for short) have greatly contributed to the economic development of the United Arab Emirates. Dubai is the Emirate with the largest number of Free Zones: it has already reached 40.

Free Zones are often located close to seaports, airports, and highways, which helps solve the logistic and communication matters. The business rules in Free Zones are different from those on the mainland. For instance, most Free Zones in Dubai allow 100% foreign ownership of a company, free capital repatriation, fast company registration, a comfortable infrastructure, discounted utility prices and other benefits.

Some Dubai Free Zones will suit companies working in all business areas while some others specialize in certain industries such as manufacturing, IT sector, healthcare, finance, and so on.

You could register both an onshore (mainland) company and an offshore company in a Dubai Free Zone. You can find out about the general differences between onshore and offshore companies if you follow this link. In Dubai’s case, the main difference is that an offshore company cannot do business with mainland companies in the UAE while an onshore company can.

Below we discuss a few Dubai Free Zones to give you a general understanding of the benefits that you can find there.

IFZA Dubai

IFZA Dubai is one of the most dynamically developing Free Zones in the UAE. It offers an advanced business infrastructure and a strategic location to local and international entrepreneurs. A multinational team of experts provides consultations on starting a business company in the Zone. Licenses are issued for more than 2,000 types of business activities and both large and small companies are domiciled in the Free Zone.

A commercial license can serve as an example of a license available in IFZA Dubai. It allows importing, exporting, distributing, and storing certain goods. Another license that you could get is a license allowing you to open a subsidiary of your company in the Zone.

Besides, some licenses allow combining professional services and commercial activities under a single license. The combined license costs a bit more, however. Different kinds of business licenses authorize the holders to apply for different numbers of resident visas to the UAE. Thus, you can involve a certain number of foreign nationals in your business operations in Dubai.

Another advantage of IFZA Dubai is lack of requirements to the registered capital: no registered capital needs to be deposited. This makes starting a company in the Emirates even less expensive.

Jebel Ali Free Zone

JAFZ is the largest artificial seaport in the world. It was built in 1985 and was initially seen as an ideal base for multinational corporations that needed to store and distribute their products in the Persian Gulf. Over the years, the spectrum of opportunities that the Zone offers has become much greater. Today, it serves distribution, manufacturing, trade, and service provision purposes. The geography of the services has also expanded and the companies stationed in the Free Zone have gone far beyond the Persian Gulf. Jebel Ali is home for over 7,000 companies including a few companies from the Fortune 500 list.

Key advantages of the Free Zone include two modern seaport terminals and proximity to Al-Maktoum international airport. Trade companies can make agreements for up to 10 years and manufacturing companies – for up to 15 years.

In addition, Jebel Ali is one of the three Free Zones where you could register an offshore company. Besides, foreign companies stationed in the Zone enjoy preferential treatment. For example, companies registered in offshore jurisdictions such as the Isle of Man, the British Virgin Islands, Mauritius, and so on are not allowed to own property in Dubai. A company registered in Jebel Ali is entitled to own property in the Emirate.

DMCC

Dubai Multi Commodities Centre (DMCC) has been created to promote trade in commodities in Dubai. DMMC is a state institution created in 2002 to facilitate flows of goods in the Emirates. The Free Zone also offers unique opportunities for companies engaged in metallurgy and raw materials. It also gives advantages to gold and diamond traders as well as companies engaged in such auxiliary services as finance, logistics, insurance, and consulting.  In addition to all other advantages, you can own commercial buildings in DMCC even if you are a foreigner. It is a universal Free Zone: it suits manufacturing, trade, education, and service companies.

Today, DMCC is a global business center with more than 13,000 companies. Many of them are engaged in construction, architecture, and design. The Zone is located in a rapidly developing Jumeirah Lake Towers district so you could enjoy not only the business benefits but also the wonderful views and a perfect infrastructure of the district if you had a company in DMCC.

How to choose the most suitable Free Zone in Dubai

There are many more Free Zones in Dubai and the choice depends on what you are looking for. First of all, you have to find out if the industrial specialization of the Free Zone suits your business area. For instance, IFZA is a universal Free Zone suitable for many types of companies. On the other hand, Dubai Media City suits mass media and publishing companies very well. In a universal Free Zone you are going to have fewer direct competitors but in a specialized Free Zone you can cooperate closely with other companies working in the same area. Dubai Internet City, for instance, has an ecosystem of IT companies and there you can find a number of training courses useful for IT specialists.

Secondly, the geographical location of the Free Zone should fit your purposes. If you have an import/ export business, Jebel Ali would be the right choice because the Zone is located close to a large seaport and an international airport. It also should be comfortable for your company officers and clients to get to your company’s office. In addition to that, you have to make sure that qualified personnel can be found in the Free Zone that you are considering.

Thirdly, you have to find out the details about the services and the infrastructure available in the Free Zone under consideration. The office space has to fit your purposes and your budget. Dubai Free Zones differ. Most of them have office buildings and warehouses but Meydan Free Zone, for example, has luxury hotels, racetracks and golf courses in addition. A brick-and-mortar office is required in most cases but IFZA will register a company without a physical office under certain conditions. Even though offices are only for rent in most Free Zones, in DMCC you can buy an office.

Finally, you have to decide how much money you are prepared to invest into registering a company in Dubai. The cost of the license depends on its validity term, the number of resident visas that it brings, and the business area. Moreover, each Free Zone in Dubai is entitled to put its own price tags on the licenses.