UAE free zones stimulate trade
After being recognized for their great contribution towards the United Arab Emirate (UAE) economy, the free zones are currently focusing on strengthening their global value chain to sustain as well as boost their economic growth.
The free zones success lies in the fact that they provide an effective investment and economic development means concerning the global value chain. The role of free zones as economic activity hubs has influenced manufacturing supply chains activity as well as international trade investment flows greatly.
Currently the UAE is home to approximately 40 free zones, each engaging in diverse business and economic sectors including advertising and media to environmental business fields and technology. In 2014 alone, 37% of non-trade activity in Dubai and 33% of non-oil trade across the UAE was attributed to the free zones. The free zones growth has been in line with the UAE’s foreign trade, industry sectors and foreign investment activity growth. In accordance with the UAE Federal Customs Authority During the first half of 2014, total trade activity within the UAE free zones amounted to Dh269.6 billion. In the first six months of 2013, total trade activity within the free zones was valued at Dh250.9.  Although specific data for 2014 has not been given yet, it is presumed that the total trade value of free zones based in Dubai will reach Dh515 billion, marking an increase of 5% in 2015 in comparison to Dh489 billion the free zones generated in 2014.
Other sources expect a 75 increase in the value of trade throughout the UAE’s free zones. The free zones success is undeniable when comparing the total value of trade generated in 2009, which reached Dh286 billion. As figures show the total amount of trade-value doubled through the passage of the years.
Dubai International Financial Centre (DIFC) has been one of the most thriving free zones across the UAE. During the next decade, the DIFC is expected to triple in size as it plans to develop into the most important bank hub within the region. Even though, the DIFC mainly owes its growth success to European companies and US companies, it is anticipated that the free zone will attract companies from emerging markets including India, China, Latin America as well as South Asia and Africa.
It is a fact that the free zone’s continuous growth is attributed to attracting investments from international companies. The free zones also benefit greatly from the UAE’s strategic geographical position, being located between the trading crossroads of the east and west.
Recently, the known developer, manager and operator of all major industrial ports and zones within Abu Dhabi presented the facilities of Khalifa Port and Khalifa Industrial Zone Abu Dhabi (Kizad) to more than 70 prominent businesspeople from India.
Since Indian companies based in India and the UAE are interested in expanding their ventures, Kizad and Khalifa Port are more than happy to welcome them. Kizad is recognized as an important hub, facilitating access to foreign markets, home to top-notch infrastructure and steady investment flows as well as home to Khalifa Port. All these features together attract businesses that seek to expand. Abu Dhabi is confident its prominent free zones have the capacity to support attempts made to increase trading ties between the UAE and India.
Furthermore, Kizad’s Industrial Units and Logistics Park were also shown to India’s businesspeople.
Free zones are focusing on attracting companies based in the G8 group wishing to expand in emerging countries.
It is noteworthy to mention that, Ras Al Khaimah Free Trade Zone (RAK FTZ), home to more than 8000 companies, recently cooperated with a prominent French Business Development Agency, Business France with the purpose of promoting its free zone services during a trade event targeted at companies engaged in the technology sector, named Gitex Technology Week. As a result of this successful cooperation, several French companies are now interested in establishing regional offices within the UAE.
It should also be mentioned that Jebel Ali Free Trade Zone carried out a weeklong presentation in Germany, centering on the most vital commercial hubs including Cologne, Munich and Dortmund.
New Innovative proposals are vital in attracting investment to UAE’s free zones. For instance, Dubai World Trade Centre Free Zone is a new free zone that will grant dual licenses to companies. In this way, the free zone will attract a variety of onshore as well as offshore licensed companies to set up in the free zone. The newly launched, Dubai Design District is the only other free zone that grants dual licenses.
The UAE also rewards innovation. For instance, recently RAK FTZ conducted a business competition with the purpose of cultivating entrepreneurship within the emirate. The prize of this Start-up Champ competition was a business set-up package targeted at innovative business planning.
The UAE free zones play a vital role in the country’s economic development within international trade.  Free zones help in diversifying and globalizing the UAE’s economies and sectors as they boost trade and investment activities as well as transfer knowledge, skills and promote technology.