free zones in uae

8/3/2019 Free Zones in UAE

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Economic Environment of

Business

Free Zones in UAE

Shakeel Ahmad, XLRI

HSBC Economic Bulletin of 2001 second quarter

http://www.econresearch.com/Datapak/Economi

c/hs01q2b.html


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Free Zones - Features

Complete freedom of ownership toforeign investors

All shipments of goods are exemptfrom Customs duty with no time

limits.

Investors are not subject to municipaltaxes on rental of industrial or office

space.


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Centralised service (JAFZA) whichhandles government relations on

behalf of investors.Convergence between worldwide

trend towards economic

liberalisation & obligations of theUAEs anticipated membership in

the World Trade Organisation


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UAE had taken the lead indeveloping free zones.

Remarkably successful in attracting

foreign investment.All new foreign investment in the

UAE gravitates to the free zones.With open economy and soundpolicies, U.A.E.has turned oil

curseinto a blessing IMF


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Name Emirate Establishment

Ahmed bin Rashid Free Zone Umm Al Qaiwain 1988

Ajman Free Zone Ajman 1988

Jebel Ali Free Zone Dubai 1985

Dubai Gold and Diamond Park (a) Dubai 2000Dubai Airport Free Zone Dubai 1999

Dubai Ideas Oasis Dubai 2000

Dubai Internet City Dubai 2000

Dubai Media City Dubai 2000

Knowledge Village Dubai 2002

Fujairah Free Zone Fujairah 1987

Hamriyah Free Zone Sharjah 1995

Ras Al Khaimah Free Zone Ras Al Khaimah 2000

SAIF Zone Sharjah 1995

Al Ain Free Zone Abu Dhabi ...

Musaffah Free Zone Abu Dhabi ...

Ruwais Free Zone Abu Dhabi ...

Saadiyat Island Abu Dhabi 1996

Designated

Free zones in the UAE

Operating


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Does it come Free?

Cost of Incorporation: much higherEquity Capital required (minimum onemillion in JAFZA).

What about Cost of Space? BetweenUS$22 and US$33 /foot2 /year.Dubai Media City: Annual licensing fee

US$4,000.Jebel Ali: most expensive but mostextensive infrastructure most

comprehensive range of services.


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Why UAE?

Strategic Central Location.The infrastructure,

communications and quality oflife.Simplest possible relationshipwith government.Not just Business Freedom!


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Why Free Zones?

Most industrialised countries do nothave free zones.

Hong Kong and Singapore do not

have free zones.Bahrain, rated the most free

economy in the Arab world:nationwide free zone.

Future of UAE: WTO will change

the structure. Soon.


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Overall

rank

Country Overall

score

Foreign

investment

Property

rights

15 Bahrain 2 2 123 United Arab Emirates 2.15 3 2

45 Jordan 2.7 2 3

53 Kuwait 2.75 4 2

58 Tunisia 2.85 2 3

60 Oman 2.9 4 3

70 Qatar 2.95 3 3

72 Saudi Arabia 3 3 3

76 Morocco 3.05 2 4

79 Algeria 3.1 2 488 Lebanon 3.15 3 4

121 Egypt 3.55 3 3

134 Yemen 3.75 4 4

145 Syria 4.1 4 4

151 Iran 4.55 4 5153 Libya 4.75 5 5

155 Iraq 5 5 5

1 Hong Kong 1.35 1 1

2 Singapore 1.55 1 1

3 New Zealand 1.7 1 1

Table 1. Middle East and selected other countries: economic

Source: The Heritage Foundation.


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JAFZA: Over 2200 companies

from 100 countries

Asia Pacific

28%

GCC & ME

35%

Europe

27%

America

10%


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JAFZA: Over 2200 companies

from 100 countries

Acer, Black & Decker, Compaq,Daewoo, GAP, Honda, Johnson &

Johnson, Nestle, Nissan, Nivea,Philips, Samsung, Sony,Bridgestone, Bayer, Hewlett-

Packard, Xerox, Nokia,DaimlerChrysler, Toshiba


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0

10000

20000

30000

40000

50000

60000

Year 1979 to 2002

Year Total Vessels Total Tonnage (x1000)

JAFZA: VOLUMES (1979 to 2002)


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DIC: Dubai Internet City

Dubai Internet City is the Knowledge

Economy hub of the region.

Target an area stretching from Egypt to

India, and from South Africa to the CIScomprising of 1.6 billion people and

GDP of US$ 1.1 trillion.

Serve IT and Telecom companies,multimedia businesses, Internet start-

ups, remote services providers, venture

capitalists and incubators.


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DIC: Dubai Internet City

DIC is the Middle Easts biggestIT infrastructure built inside afree trade zone.

While U.A.E. GDP represents17.4% of GCC total, it has a

20.3% market share of the ITmarket.

World-first and largestimplementer of IP Telephony.


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DIC: WORLD-WIDE PRESENCE

Number of Companies in DIC : 325

Middle East

27%

Africas

2%

Americas

15%UK & Europe

33%

Asia Pacific

4%

Sub Continent

19%

Middle East Africas Americas UK & Europe Asia Pacific Sub Continent


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THE GOLD & DIAMOND

PARK

The Gold & Diamond Park is partof the Jebel Ali Free Zone Area.


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DUBAI MEDIA CITY

Phase I launched in January 2001,houses around 96 mediacompanies across all media

segments.PHASE II Opened in August 2002.

PHASE III: Under Construction.

BOUTIQUE OFFICES: OpeningJune 1st, 2003.


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DUBAI CARS & AUTOMOTIVE

ZONE [DUCAMZ]

An area of 8 million sq. ftTRADING IN USED CARS.

Left-hand drive vehicles: Exported into thelocal markets.

Right Hand driven vehicles: Mainly

exported to India, Afghanistan, Pakistan,Yemen & other African Countries.

www.ducamz.co.ae


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AJMAN FREE ZONE [AFZ]

Cheap Energy.Economical wage structure and easy access

to vast work force.

Total exemption from all import and exportduties.

Total elimination of all service charges andhidden fees.

Exceptionally low handling charges.

Low lease prices. Low tariffs in the region.


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Dubai Knowledge Village

Under Dubai Technology and MediaFree Zone (TECOM).Knowledge Village is a vibrant,

connected learning community thatwill develop the regions talent pooland accelerate its move to the

knowledge economy.Work with Dubai Internet City and

Dubai Media City to develop the

skills and know-how of the industry.


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SHARJAH AIRPORT INTERNATIONAL

FREE ZONE [SAIF]

Where Fortunes Are Made

http://www.saif-zone.com


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UAE: Per Capita GDP & BOP


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UAE: Exports & Imports


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UAE: Real GDP Growth & Current

Account Balance


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UAE: Fiscal Bal & GDP Per

Capita adjusted for PPP

GCC k t i di t


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Population,

m

end-2000 1999 1999 1999

Bahrain 0.7 4,088 3,588 95 b 3,417,216Kuwait 1.9 12,192 7,617 226 b 3,795,218

Oman 2.4 7,094 a 4,678 1,183 2,799,922

Qatar 0.6 5,792 a 2,765 a 151 b 3,063,989Saudi

Arabia

20.2 45,730 a 28,032 479 27,041,165

UAE 3.1 28,153 a 32,518 a 17,374 15,387,697GCC total 28.9 103,050 79,198 19,509 55,505,207

1999 or latest year

Source: population estimates by Edwards Economic Research Inc; exports and

imports from International Monetary Fund

GCC market indicators

Exports, $m Imports, $m Re-exports, $m Air

passengers

GCC: conventional oil resources as of December 31 1996


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Cumulative Reserves, Yet to be Ultimate Depletion Depletion

production median discovered recovery midpoint rate

to date probability date

Bahrain 1 0.1 0.1 1.2 1976 16.40%

Kuwait 27 60.5 7.5 95 2017 2.70%

Neutral

Zone

5.4 4.7 1.9 12 1999 1.80%

Oman 5 6 1 12 1998 4.80%

Qatar 5.3 4.2 0.5 10 1994 3.60%Saudi

Arabia

77.3 202.2 20.5 300 2013 3.00%

UAE

- AbuDhabi

14 62.3 3.7 80 2017 2.80%

- Dubai 3.1 1.5 0.3 5 1991 5.90%

- Sharjah 0.4 0.4 0.4 1.2 2006 2.10%

Total 138.5 341.9 36 516.4Source: Oil and Gas Journal, April 7, 1997

GCC: conventional oil resources as of December 31, 1996

Units: billion barrels


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THANK YOU

free zones in uae

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