UAE free zones Records 4.4% growth
UAE free zones have marked a 4.4% growth when compared to the earlier period this year, accommodating around 60,600 companies by the end of mid-February. As per the UAE’s National Economic Register (NER) more than 8% of the total businesses set up in UAE are included in the free zones, most of them in Dubai and Abu Dhabi.
There is a total of 44 free zones in UAE which aims to attract foreign investments. The luxury of 100% business ownership for all nationalities and the ease of setting up the business, employing labor and immigration processes are all offered in the free zones.
The NER said in its statement to the state news agency WAM that, “The growth is reflective of the successful business continuity and disaster recovery plans adopted by the UAE to lure more foreign investors to work across the nation amidst the global economic slowdown caused by Covid-19 since the second quarter of 2020.”
The free zones offer numerous incentives to the investors, but with the implementation of new laws regarding the foreign ownership in the country, the future of the free zones can’t be foreseen at the moment.
It was the free zones in UAE that offered 100% foreign ownership to businesses, but recently in November 2020, the government amended the Company Law extending the foreign ownership of businesses to UAE mainland as well. The mainland companies required the sponsorship of a UAE national who held 51% of the company’s shares.
The amendment made to the Commercial Companies Law of 2015 was the latest addition to the measures for liberalizing the business activities in UAE. The improved government policies will help the country in bringing in more foreign investments.
Experts have said that the amendment will have a “challenging” and “significant” impact on the free zones.
The free zones were always the primary choice for foreign investors, the growth of the free zones have proven that it still remains as the most preferred location for businesses.