Dubai’s free zones a pillar of economyRoemarie Ann Periabras
Dubai’s free zones a pillar of economy
Free zone trade in Dubai hit Dh394 billion in the first nine months of 2018 with China, Saudi Arabia and India becoming the biggest trading partners of the emirate’s 24 free zones.
According to official data released on Saturday, free zone trade accounted for 41 per cent of Dubai’s total trade, marking a growth rate of 22 per cent during the nine-month period.
The emirate’s total trade, according to Dubai Customs, in the same period reached Dh965.3 billion. Data revealed that imports of free zones amounted to 54.5 per cent at Dh215 billion, while exports and re-exports reached 45.5 per cent at Dh179 billion. Overall, free zones have generated 31.9 per cent of Dubai’s GDP.
China topped the list of Dubai’s largest free zone trade partners in the first nine months of 2018 with a total trade volume of Dh59 billion. Saudi Arabia placed second globally and first in the Arab region with Dh34.2 billion, followed by India with Dh34 billion.
More than 41,000 companies employ over 354,000 people across Dubai’s 24 free zones.
Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the Dubai Free Zones Council, attributed this growth to the efforts on the ground and promotional campaigns of the free zones to attract foreign direct investment to Dubai. He stressed that the achievements of the free zones testify to the emirate’s attractiveness for investors and businessmen across sectors.
“Dubai’s economy relies on the efforts of the free zones to diversify the national economy and explore the non-oil future in line with the objectives of the Dubai Plan 2021 to elevate the emirate’s global status in all aspects and to establish its economy as a major contributor to the global economy,” he said.
Sheikh Ahmed directed the emirate’s free zones to focus their efforts in 2019 on adapting to the global economic climate that is witnessing a recovery while maintaining their outstanding performance in attracting foreign investments and supporting economic development.
Jitendra Gianchandani, chairman and managing partner at Jitendra Consulting Group, said over the years free zones have been instrumental in diversifying the emirate’s non-oil sector.
“Dubai’s geographical location and connectivity with the world by all forms of transportation such as sea-air-land make its free zones as first preference for entrepreneurs across the globe. Apart from that advanced facilities, transparency of the government policies and smart IT technology ensure investors efficiency and guaranteed return on investments,” he said.
“However, due to increased business operation cost especially rent, visa and licensing fees that are higher than the business operations operating in the mainland, I think government should introduce cost incentives to new and established businesses in the free zones to stimulate foreign investments,” suggested Gianchandani.
Pankaj Mundra, co-founder of Nimai Group, noted that Dubai free zones have the best turnaround time to issue licensees and reasonable costs compared to other jurisdictions worldwide.
“The focus of free zones having specialised licences like the Dubai Multi-Commodities Centre for commodities traders and Media City for media, etc, gives more importance to incoming clients,” Mundra said, adding that “if free zones can have specialised venture funds to participate in equity of new companies can boost trade flow and trade”.
Free zones can also guide them to grow business by cross-selling to other free zones entities and grow business together, Mundra added.
In 2018, the DFZ Council completed the first phase of consolidation of the Free Zones Database in cooperation with the Dubai Statistics Centre to accelerate the response of free zones in meeting the needs of customers, investors and strategic partners, and enhance their growth opportunities in the near and long term.
In line with the nation’s ambitions to top competitiveness indicators and boost its ease of doing business ranking, in 2018, DFZ Council members agreed that enabling the transfer of branches of companies among Dubai’s free zones will create a conducive environment for expansion, which boosts the volume of business across the emirate.
The DFZ Council also examined measures to combat money laundering and the financing of terrorism in line with international standards to ensure Dubai’s and the UAE’s sustained top ranking in this domain.
One suggestion was to establish an integrated and autonomous department within each free zone focused on regulation and finance that would oversee the preparedness and compliance of the respective free zone in these aspects, the statement said.
Source: Khaleej Times