Understanding Dubai Free Zones

10 Mar, 2015 - Consumer & Retail


In 1985 Jebel Ali Free Zone (JAFZ) was created. JAFZ was envisioned by Highness Sheikh Rashid Bin Saeed Al Maktoum, the then Ruler of Dubai. Jebel Ali Port was constructed in the late 1970’s and remains to this day the largest port in the Middle East. It is important to appreciate the forward thinking that took place during this time to enable the creation of the JAFZ, especially when one considers 1985 was during the height of the first Iran-Iraq war (1983-1988).

Free Zones in the UAE enable foreigners to own a company outright, however they come with restrictions. The main three are:

· Free Zone companies cannot conduct business with companies onshore in the UAE (i.e. not in the Free Zone too)
· Free Zone companies cannot usually secure government contracts (as a result of not being onshore)
· Free Zone companies are obliged to lease commercial space within the Free Zone itself from the governing Authority, so there tends to be a much more limited supply of premises, and prices reflect this

An onshore company is not subject to rules of this manner; an onshore company is as free to do business in the UAE as a UK company is in the UK. However an onshore company must have a local sponsor, either as a 51% shareholder for a Limited Liability Company or as a National Service Agent for a Foreign Branch company, where ownership is maintained 100% by the British firm.

Working with the Dubai Government, the BCB provides all our client companies Foreign Branches with a local sponsor for a one year period – we offer UK companies the best of both worlds in what is as unique a set-up as the idea of a Free Zone was in 1985.


Image sourced from www.uaeinterect.com