In the blink of an eye 2019 has arrived and the highly anticipated Expo 2020 is just a year away. The Expo 2020 has generated a massive boost in the UAE’s real estate and economic sectors after it was awarded to Dubai in 2013, resulting in entrepreneurs, investors and business owners from across the globe to have their eyes set on the city. If you are a potential business owner who is looking to move to the city to take advantage of the economic boom that the Expo 2020 will bring, knowing about the free zones in Dubai is a pre-requisite. So to help you understand more about the free trade zones in Dubai here is a quick guide.
What are free zones?
Essentially, free zones or free trade zones in Dubai are business zones where companies operating in them are exempt from all types taxation such as Value Added Tax (VAT), Income Tax, Corporate Tax and Customs. Business owners in the free zone areas in Dubai have 100% ownership of the business. The aim of these zones is to encourage foreign investment and promote economic activity in the city. Dubai was actually the first emirate to introduce the free zone model in the UAE. Dubai free zones should not be confused with freehold areas. Our article on the difference between a free zone and freehold areas in Dubai can help you get further insights.
Why set up a business in any of the free trade zones in Dubai?
There are many advantages of setting up a business in a free zone in Dubai, which includes 100% ownership of the business and full tax exemption which is the ideal option for foreign companies and business owners who want to utilise the UAE for regional manufacturing or as a distribution base. The 100% ownership and full tax exemption in these dedicated economic zones in Dubai provide a lucrative investment opportunity for business owners.
While free zone companies in Dubai do benefit from operating in these areas, business owners must be mindful that to successfully register and run the business, having the right licenses and approvals is necessary. The pre-requisites of registering a company in a Dubai free zone include determining the type of legal entity, choosing a trade name, applying for a business licence, renting or buying an office and obtaining other pre-approvals.
A list of the free zones in Dubai
Currently, there are 24 free zones in Dubai, each catering to specific sectors and industries. They are divided into three major categories as per the official UAE Government website and are as follows:
1. Dubai Creative Clusters Authority (DCCA)
The DCCA, now known as the Dubai Development Authority mandates the development of creative and knowledge-based industries in the city. The free zone areas in Dubai under the DCCA include:
- Dubai Internet City
- Dubai Media City
- Dubai Production City
- Dubai Studio City
- Dubai Outsource City
- Dubai Knowledge Park
- Dubai International Academic City (DIAC)
- Dubai Science Park
- Dubai Design District (d3)
2. Dubai Multi Commodities Centre Authority (DMCC)
Established in 2002, the DMCC Authority is the hub for global commodities trade. The free zones area in Dubai listed under DMCC include:
- Jumeirah Lakes Towers
These Dubai free trade zones deal with a variety of industries that range from gold and jewellery to health care and manufacturing.
- Jebel Ali Free Zone Authority (JAFZA)
- Dubai Airport Free Zone Authority (DAFZA)
- Dubai Silicon Oasis Authority
- Dubai Healthcare City Authority
- International Humanitarian City
- Dubai World Trade Centre
- Dubai Maritime City Authority
- Gold and Diamond Park
- Dubai South
- Dubai International Financial Centre
- National Industries Park (TechnoPark)
And that concludes our quick guide. As you can see, there are many free trade zones that you can choose from which are ideal for a company formation in Dubai. With the 10-year residency law and changes to UAE company ownership law coming into effect this year, now is the perfect time for foreign business owners to register and operate as a free zone company in the city. Are you looking to start up a business in any of these economic zones? This step-by-step guide of setting up a business in Dubai may prove to be helpful.
How do you think the Expo 2020 will affect Dubai’s economy in the coming months? Let us know your thoughts in the comments below. And if you enjoyed this article and want to get more regular updates from Dubai’s real estate sector, stay tuned to MyBayut, the best property blog in the UAE.