Free Trade Zones, or Free Zones, in the United Arab Emirates (UAE) literally are ‘free’ zones; zero corporate tax, zero import export tax and zero personal income tax.
Initially these Free Zones were set up by the UAE as a way to provide additional incentives to potential foreign investors and consequently promote foreign trade. They operate specialised laws which make ownership, labour, taxation, access to markets, recruitment and housing very desirable to a potential foreign investor in terms of benefits and ease of use.
There are now 38 different UAE Free Zones, each representing a different business industry; i.e. DAFZA deals with import, export businesses, TECOM is for IT and E-Commerce. Each individual UAE Free Zone is overseen by a Free Zone Authority (FZA) which is an independent governor responsible for directing businesses to their compatible Free Zone with the appropriate documentation.
The benefits of establishing a business in one of the many UAE Free Zones are huge. Foreign investors are entitled to 100% ownership of the business with no recruitment or sponsorship requirements; 100% import and export tax exemption; 100% capital and profit repatriation; zero corporate taxes for 15 years with a renewable extension of a further 15 years; zero personal income taxation; access to the consumer markets of over 5 billion people including the Middle East, North Africa and Indian Subcontinent; assistance with labour recruitment and support services with sponsorship and housing all available within the geographical Free Zone; and access to a wide variety of skilled labour.