DUBAI: More than 3,500 Special Economic Zones or Free Trade Zones – also known as Free Zones – spread across 130 countries handle US$3.5 trillion worth of exports annually, according to a latest report by the Organisation for Economic Cooperation and Development (OECD).
With global exports reaching US$15.46 trillion, the share of free zones has crossed 22.63 percent.
Of this, free zones or Export Processing Zones in Asian countries handle US$2.4 trillion worth of trade – leading the free zone output in the world while free zones in the Middle East handles $552 billion worth of exports.
Free zones add US$500 billion worth of trade-related value globally while 66 million people are employed by companies registered within free zones, according to the report.
A free trade zone is an area geographically within a country’s boundaries, but designated outside of its customs area. In theory, a free port allows manufacturing and value added processing to take place on goods before customs are imposed.
Global free zone movement started in 1959 in Ireland with the establishment of a free zone at the Shannon Airport in Ireland and there are more than 3,500 free zones in operation today.
Free zones offer foreign companies maximum freedom to do business and create employment. Usually set up next to ports, harbours and airports, free zones provide the best storage and most efficient logistics corridors for easy movement of goods and transports and eases doing business for foreign investors.
UAE Free Zones
The number of free zones in UAE is more than 45 including 10 new under construction. Among this 45, more than 30 are in Dubai, making it the region with highest number of free zones.
The UAE, which has one of the highest number of free zones in the world that offers foreign investors 100 per cent foreign ownership in companies registered with any of these free zones.
Dubai’s free zones handled Dh434 billion worth of goods or a third of the Dh1.3 trillion worth of foreign trade in 2017.
The exports from UAE’s free zones amounted to Dh225.5 billion ($61.39 billion) in 2017, a growth of 6.6 percent from the previous year, according to the UAE Central Bank.
The free zone exports account for 19.5 percent of the country’s total exports during 2017, and comprised 16 percent of the trade balance.
The past three years saw some discrepancy in the free zone export volume, which reached Dh221.3 billion in 2015, before declining to Dh211.4 billion in 2016 and then rebounding significantly last year in a way that reflects the boom witnessed on the non-oil sector.
The World Free Zones Organization (World FZO) was launched in Dubai, UAE, in May 2014, by its 14 founding members and under the auspices of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai.
Registered in Geneva and headquartered in Dubai, the World FZO is the only truly international, multi-lateral organisation for free zones in the world today.
Dr. Mohammed Alzarooni, Chairperson of World Free Zones Organization and Director General of Dubai Airport Freezone (DAFZA) said, “Free zones have been instrumental in developing the economies of many countries around the world. One of our key objectives is to raise awareness of the benefits that free zones can bring in terms of enhancing foreign direct investment and trade; promoting cultural diversity; driving innovation and skills development; creating new jobs and industries, as well as bringing stability to the global economy and prosperity to nations.
“As a not-for-profit entity, we are committed to supporting the management and continuous development of free zones and offer a range of support services for our members. These include training and development programs as well as research and analysis on free zones and wider trade and investment trends.
“We have a very clear mandate and set of goals that we believe will benefit the world’s many free zones and, ultimately, have the potential to transform the communities that we serve.”
Dawood Al Shezawi, the CEO of AIM, said “Free zones reduce red tape, eases business regulations, liberate the global trade and supports global economic growth that has been struggling for a while.
“Free zones are a major growth catalyst and they not only a facility for import, export or trade, free zones are in fact economic growth enabler, job creator and attracts investment.
“That’s why the Annual Investment Meeting also focuses on free zones as a tool to boost investment and private capital flow into the developing economies as well as help their economic growth accelerates.”
The eighth edition of the AIM is all set to be held at the Dubai International Convention and Exhibition Centre from April 9-11, 2018,will produce an outstanding investment conference with top-notch global experts, renowned academics and experienced consultants to update AIM audiences with contemporary investment trends in an ever-changing domain of FDI.
“Since Dubai and the UAE has championed the free zone concept with 45 free zones, it is befitting that we, at the AIM promote free zones as an enabler to investment. We have lined up a number of interactive seminars, workshops and match-making initiatives to promote foreign investment – from which participants and delegates could learn the most effective ways and means to attract investment,” Dawood Al Shezawi said. News Desk
