Recent years have seen a significant rise in interest when it comes to setting up a business in the United Arab Emirates. In order to continue this trend, the Emirates have invested heavily in ways of attracting foreign companies and positioning themselves as a global trade leader.
To help with this goal, over the last few decades authorities across the UAE have worked tirelessly to create an ever-growing number of designated ‘free zones’. These areas come with significant benefits in order to help entice and attract foreign-based businesses and investors into the country. These free zone benefits were developed with two main goals — to fuel the economy, and boost the global outreach of the UAE as a go-to destination for trade and business.
What is a Free Trade Zone?
A free trade zone is an area designated specifically for the trade of goods and services. The concept was introduced in the Middle East as an effort to help diversify the region’s economy, while attracting foreign investment and business. Companies in these free zones are afforded benefits such as preferential tax and access to world-class facilities and infrastructure.
The first free zone in the United Arab Emirates dates back almost 40 years to 1985 when the Jebel Ali Area in Dubai was established. Since then the free zone concept has evolved and helped shape the economic viability and prosperity of the entire region of the United Arab Emirates.
A List of Free Trade Zones in the UAE
Many of the UAE’s trade zones are designed to suit the needs of a specific industry, including financial services. For a business operating in the financial services sector, there are a variety of free zones that would uniquely suit their needs, including; the DWTC, Ras al Khaimah, Sharjah Media City, and the Dubai International Finance Centre.
With so many different trade zones available for companies of all manner of industries and specialities, including financial services businesses, it is important to understand which area would best suit your operation. This is why it is an excellent idea to speak to a specialist who can guide you through the process of moving your business into a free zone, what benefits it could bring you, and which one is recommended for you.
Here is a list of the main free trade zones for financial services firms in the United Arab Emirates:
Dubai Multi Commodities Centre (DMCC)
When it comes to free zones in Dubai, and potentially the wider Emirate, the Dubai Multi Commodities Centre (DMCC) is the jewel in the crown. One of the fastest growing free zones in the UAE, the DMCC was first established in 2002. The DMCC is situated in the Jumeirah Lakes Tower Development right in the heart of Dubai, and offers anything you could possibly need to work, live, and play.
The core idea of the DMCC free zone is to promote trade in the area for all manner of goods and services; from diamonds, gold, and tea, to financial start-ups. It is home to both world-renowned corporations and small start-ups, and boasts a network of over 20,000 businesses, —all with access to world-class services, unbeatable infrastructure, and a diverse and energetic community.
In May 2021, DMCC issued its first ever crypto assets trading licence for transitions involving cryptocurrency. This was done to help begin the process of establishing Dubai as one of the best places in the world for crypto trading. For more information on the Cryptocurrency market in Dubai see our blog on the subject.
Dubai International Finance Centre (DIFC)
Heralded as the leading hub for finance in the Middle East and surrounding regions in Africa and Southern Asia, the Dubai International Finance Centre has been in place for over 15 years and is intended to connect the economies of the Middle East, Asia, Europe, and the Americas all through one centralised zone in Dubai.
DIFC possesses the largest concentration of financial businesses in the region, with over 2500 registered companies, employing more than 25,000 professionals.
The centre aims to represent a hub for all financial services in the Emirate, and offers technological benefits, as well as regulations, programmes, and funding designed to make the area as perfectly suited to the industry as possible.
Dubai World Trade Centre (DWTC)
As the name suggests, the Dubai World Trade Centre (DWTC) is designed to be the centre for world trade in the area, and has been seen as playing a key role in the development of Dubai and The Middle East’s booming tourism trade.
The DWTC is home to the region’s many trade fairs, consumer shows, and conferences for international businesses. Taking place in the zone’s purpose built complex, designed to house events and exhibitions of an unmatched scale in the Emirate.
The purpose of these events is to attract additional trade to the UAE, furthering the development of Dubai and The Emirate as a world leading destination for all manner of industries, services, and events. This is done thanks to DWTC’s status as a world-renowned networking platform.
Abu Dhabi Global Market (ADGM)
An award winning international finance centre, the Abu Dhabi Global Market (ADGM) is strategically positioned right in the centre of the United Arab Emirates.
Opened in 2015 with the aim of being one of the leading financial centres in the world, the ADGM is intended to promote the growth of both the economic and financial sectors in the area thanks to its three independent authorities who all ensure that best practices are followed at all times, while promoting growth and prosperity.
Sharjah Media City
Opened as a regional leader for business in the media/creative industries, the Sharjah Media City is however a highly diverse free zone, with a wide range of business activities viable within its 2million m² area.
It has cemented itself as this creative hub for the region thanks to its excellent resources and benefits, resources and benefits that are also perfectly suited to start ups and established businesses in all manner of fields, including the financial sector.
The Sharjah Media City aims to stand as a beacon for the development of the region and its people, to nurture its people and help the future generations.
Ras Al Khaimah Economic Zone
Right in the heart of Ras Al Khaimah, one of the seven Emirates that make up the United Arab Emirates, the Ras Al Khaimah Economic Zone (RAKEZ) is an industrial centre established to support businesses of all size and type, to allow them to grow.
RAKEZ is intended, through its authorities, licensing laws, available resources, and support system, to make running and operating a business within the Emirate as easy as possible — in order to benefit the business owner, the prosperity of the zone, and the wider UAE.
Is There a Difference Between the Free Zones in the UAE?
When it comes to the differences between the free zones in the UAE, it ultimately comes down to the authorities within each zone who dictate the regulations and fees that are involved in incorporating in the area. Differences between the free zones include the incorporation fees, the possibilities of a virtual office, average office rent, and more.
Common differences between the free zones in the UAE include:
- Average office rental price
- Share capital estimates
- The possibility of utilising a virtual office for day-to-day operations
- The cost of incorporation
- What businesses are eligible to operate in the zones
5 Advantages of Free Zones in the UAE
To make the Emirates as attractive as possible for foreign investors, a series of benefits were brought into effect within their designated free zones. Their goal is simple, to boost the region’s economy and boost their global outreach. These UAE free trade zone benefits include tax breaks, the ability to own 100% of the company, and enhanced infrastructure.
Here are the five main UAE free trade zone benefits in more detail:
Ownership
One of the largest perks when it comes to opening a business within an Emirate’s free zone is that you are able to retain 100% ownership over your company. To help make the areas more attractive for foreign investment, any business operating within the zones has no requirement for a local UAE sponsor.
You are able to enter the country and establish a company much like you would anywhere else, hassle free, but with a few additional incentives.
Tax Exemptions
A company operating in a UAE free zone is eligible for a variety of excellent tax benefits. While some nations seem to wish to punish company owners by handing them hefty taxation, the Emirates do the exact opposite.
Tax exemption benefits you could qualify for include:
- 100% import/export tax exemption.
- Eligibility to apply for a UAE Tax Residency Certificate.
- Tax Holidays for between 15-50 years.
- Corporate tax exemption for up to 50 years.
100% Repatriation
Any business and worker operating within a free zone has the right to repatriate 100% of all capital and profits. This means that a business is able to convert/exchange every penny of capital/profit made in the free zone to their country of origin.
Infrastructure
Emirate free zones are built to be as readily available and ideal for business owners as possible. There is a wide variety of workspaces available to you; from warehouses to office spaces, all ready to move into on little notice.
These areas are also designed to be as accessible as possible, with world-class transport links virtually on your front door.
In addition, should you wish, some of these areas are designed for working and living to go hand in hand, meaning you can cut your commute while living in spacious, wonderful surroundings.
Ease of Recruitment
Free zone companies are able to recruit foreign national professionals in as simple and cost-effective manner as possible. Unlike outside of a free zone, the process does not require a mountain of paperwork and legislation. The hassle-free immigration procedures in the dedicated facilities within UAE free zones are designed to be as efficient as possible, to save time and money for all parties.
How Ruthberg Helps You Open a Free Zone Company in the UAE
For any business owner looking to extend their operations into prosperous regions like Dubai, The Kingdom of Saudi Arabia, or the wider United Arab Emirates, it is important that you understand exactly what it means to open a business within a free zone, and understand what it can do for your business.
UAE free trade zone benefits are designed to boost business and help owners to more easily launch them into exciting emerging markets in the Middle East. Ruthberg has vast experience and knowledge within the UAE business world and can offer a variety of advisory services to assist you with company incorporation throughout the UAE.
Providing an all-encompassing service that can’t be matched is what we aim to give to each and every one of our clients. We have offices around the world, meaning we are ready to work with you at any time of the night, to help deliver a swift resolution to any issue. You can contact us via Whatsapp, over the phone at +971 50 508 0586, or email us at enquiries@ruthbergs.com, whichever method is easiest for you.