Dubai free zones mull single licence for all free zones

Dubai - Starting a business within Dubai's free zones will become much more economical and easier with a host of fresh initiatives being planned by the Dubai Free Zones Council (DFZ Council).

The Council said its members have reached a preliminary agreement whereby companies operating in a free zone can operate in other free zones in Dubai without the need for a second licence.

At the Council's 12^th meeting headed by Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai Free Zones Council and chairman of Dubai Civil Aviation Authority and chairman, CEO of Emirates Airline and Group, the Council's members agreed to the One Free Zone Passport Initiative where they agreed to allow firms to operate in multiple free zones on a single licence.

"The DFZ Council aspires to position Dubai as a regional driver of sustainable economic growth, as well as a reference point for forecasting the future in various fields, including education and innovation, while reflecting the outcomes of the Fourth Industrial Revolution. We have completed a study on our e-commerce initiative and look forward to constructive feedback from The Executive Council of Dubai," said Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai Free Zones Council.

Since the UAE last year announced that it would allow 100 per cent foreign ownership in mainland companies, analysts and legal expert believe that free zones will have to come up with novel ideas and incentives to retain existing companies and attract more companies into the free zones amidst growing competition.

Dr Habib Al Mulla, chairman, Baker McKenzie Habib Al Mulla, had said in an interview with Khaleej Times earlier that the free zones have to find other incentives for companies to continue to operate there.

"Main reason people going to free zone was their ability to have 100 per cent ownership. But this new rule (of full ownership in mainland) will eventually have an impact on free zones. Free zones have to be competitive in their rents and costs and also have to find some other efficiencies. For example, procedures for registration need to be more efficient and accessible so that companies continue to stay in the free zones," Dr. Al Mulla said.

In order to improve ease of doing business across the emirate's free zones, its council members approved requirement of an insurance policy instead of a bank guarantee for free zone-based companies.

Importantly, the Dubai Free Zone Council said it would discuss with Dubai Land Department about exempting free zone companies from registering leased property at the Department. In addition, the council with coordinate with Federal Tax Authority to enhance performance of businesses operating in the free zones.

The Dubai Free Zone Council suggested conducting a research on supporting halal industry and a comprehensive assessment of industry-focused free zones.

-waheedabbas@khaleejtimes.com