The United Arab Emirates (UAE) has emerged as a key player in the global business arena, thanks to its strategic implementation of free zones. These free zones have been pivotal in attracting foreign investment by offering a range of advantages that simplify the business set-up process and foster growth within innovation ecosystems. What began as a trade facilitation initiative has evolved into a network of dynamic, sector-specific trade hubs that address both free zone business challenges and opportunities, significantly contributing to the UAE’s economic success.
A free zone is a designated area within a country where businesses benefit from a unique regulatory framework designed to simplify operations and enhance growth. In the UAE, these free zones have become key innovation ecosystems, providing expatriates and foreign investors with 100% company ownership without needing a local partner. They serve as strategic trade hubs, offering key benefits such as full repatriation of capital and profits, streamlined business set-up procedures and access to modern infrastructure. Each free zone operates under its own set of rules, often tailored to specific industries, which supports efficient and effective business operations.
The UAE's free zone concept started with the Jebel Ali Free Zone in 1985, designed to enhance trade and attract foreign businesses with a business-friendly environment and minimal regulations. Its success led to the development of additional free zones, and today, the UAE has around 45 such zones, each supporting various sectors and driving economic diversification and growth. The development of these innovation ecosystems has streamlined the free zone business set-up process, further supporting economic progress.
As the network of free zones expanded, many began to focus on specific industries, creating specialised ecosystems that foster innovation and sectoral growth. Free zones have become trade hubs for industries such as healthcare, technology and manufacturing, offering tailored services and streamlined business set-up processes. This sectoral focus has significantly impacted the UAE's exports, with free zones contributing to over 40% of the country’s total exports, including re-exports. By creating an environment that promotes industry-specific innovation and attracts foreign investments, these zones address business challenges and unlock new business opportunities, playing a pivotal role in the UAE’s economic development.
Looking ahead, the UAE’s free zones are set to continue driving innovation and supporting economic growth. With a focus on sustainability, digital transformation and modern infrastructure, these zones will maintain their competitive edge in the global market.
The Ras Al Khaimah Economic Zone (RAKEZ) exemplifies the evolution of free zones towards greater diversification and innovation. RAKEZ supports a wide array of sectors, from manufacturing and logistics to media and consultancy. Known for its cost-effective solutions and streamlined processes, RAKEZ is particularly attractive to SMEs and startups. Its flexible environment and comprehensive support services make RAKEZ a key player in the UAE’s free zone landscape, reflecting the broader success of free zones in fostering business growth and innovation.
100% foreign ownership: A key advantage of setting up a free zone business is that foreign investors can retain 100% ownership without needing a local sponsor or partner. This allows investors to have full control over their operations and make strategic decisions independently. Low tax: Previously, free zone companies in Ras Al Khaimah benefited from complete tax exemptions, including corporate tax, personal income tax and import and export duties. However, from June 2023, companies generating an annual profit exceeding AED 375,000 are subject to a corporate tax rate of 9%. Despite this change, it remains one of the world's lowest corporate tax rates, presenting a substantial advantage for foreign investors looking to minimise operational costs and maximise profits. No currency restrictions: Another benefit of setting up a business in Ras Al Khaimah’s free trade zone, RAKEZ, is the absence of currency restrictions. Investors can freely repatriate all profits and capital, facilitating seamless management of financial operations. Easy company set-up: The process of setting up a business in the emirate’s free trade zone is relatively straightforward. It features a streamlined registration process and minimal paperwork, making business set-up in the UAE efficient and cost-effective. This ease of establishment enables investors to commence operations swiftly, providing substantial free trade zone benefits. Access to global markets: Free zone companies in Ras Al Khaimah enjoy access to a vast network of global markets, spanning Europe, Asia and Africa. This facilitates business expansion and enables companies to reach new customers, ultimately driving increased profitability and success. Book a free business set-up consultation with experts at RAKEZ today. Contact: Phone: 97172041111 Email: info@rakez.com
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