Free Zones are areas in Dubai that offer advanced infrastructure and economic benefits aimed to encourage and facilitate certain types of business. Free Zones usually offer full foreign ownership and no taxes. These zones are also called Free Trade Zones, Tax Free Zones, Trade Free Zones, Duty Free Zones and Free Economic Zones. Every zone has specific company requirements with regard to office space and activities.
The Dubai Car and Automotive City Free Zone, (DUCAMZ), is one of the biggest Free Zones in the UAE and offers benefits for businessmen in the used car industry. DUCAMZ is based in Ras Al Khor, Dubai, only 10 kms away from Dubai International Airport. It was established in April 2000, with the objective of re-exporting used cars to the Asian and African markets. It is open to all businesses involved in the used car industry, and companies supply cars throughout Asia, Africa and Europe. DUCAMZ gives companies assistance with aspects such as licensing, admin services, customs and clearing.
Businesses in DUCAMZ are involved solely in the re-exporting of cars to targets markets. The Free Zone stretches over 8 million square feet and is thought to be the largest in the world. From here, cars can be reloaded onto vessels and transported to the Middle East and beyond.
The vehicles sold in the Free Zone are categorized into two groups:
a. Left-hand drive vehicles are exported into the local markets and are subject to the local regulations prevalent in the UAE.
b. Right- hand drive vehicles are mainly exported to India, Afghanistan, Pakistan, Yemen, and other African countries.
In terms of company formation, the Free Zone Company (FZCO) can be formed with multi shareholding partners. Its affairs are separate from those of its partners, with a paid minimum of 100,000 (US 27,000) as share capital. The minimum number of shareholders is two and the maximum five.
There are a number of advantages for investors to maximise when setting up a company in DUCAMZ. These include an attractive working environment, access to over 2 billion people, excellent provision of services, no currency restrictions, competitive freight charges, and efficient communications. In addition there are no corporate taxes for 50 years, no restriction of amount of automobiles imported, no import/export duties, complete foreign ownership, and no restrictions on the amount of cars imported.