UAE free zones begin to woo int'l firms as high season arrives

DUBAI (Xinhua) - As the business high season kicks off, the United Arab Emirate (UAE)'s 38 economic free trade zones start to woo international firms.

The beginning of September, when executives return from their annual leaves and conference, marks the beginning of the " corporate high season" in the emirate, which promotes the authorities of Dubai's over 20 industrial free zone reasons to re- launch their marketing campaigns in order to deliver the message to the world that despite the ongoing turmoil in some Arab countries, the UAE remains a harbor of stability and economic openness.

As the diminishing oil reserves contribute only 2 percent of Dubai's gross domestic product (the bulk of Emirati oil is located in neighboring Abu Dhabi), the ruling Al-Maktoum family was motivated to build a number of free trade zones.

On Sept. 2, Chief Executive of the Dubai International Free Zone (DIFC), Jeff Singer, will strive for deals by presenting the financial free zone's business development for the first half of 2013. Opened in 2004, the DIFC managed to lure 313 authorized lenders, insurance firms, asset management companies and fund firms. Among them are 22 of the 25 biggest banks in the world.

In the UAE free zones, which cover nearly all industry segments from "A" like alternative energy to "Z" like zero-customs ports, registered firms are exempted from paying municipality any tax and enjoy free capital repatriation. Free zone companies also do not pay import or export customs.

Despite the DIFC's success, Giyas Gokkent, the chief economist at National Bank of Abu Dhabi is optimistic that the Abu Dhabi World Financial Market can help Abu Dhabi, where 7 percent of the world's oil is located, to recycle petrodollars within the UAE and the Middle East.

"The concept of the free zone were instrumental in lifting the UAE to a global business hub in the last 20 years, linking Europe and Africa on the one hand East Asia on the other hand to lure foreign direct investment to the Gulf state," said Nasser Saidi, the former chief economist of the DIFC.

Besides Dubai and Abu Dhabi, the free zones in the other UAE sheikhdoms also reach out to the world.  

In 2012, the UAE attracted 30 billion Dirham or $8.2 billion in foreign direct investments, up from $7.68 billion in the year before. Apart from the existing 38 free zone, nine free zones are under construction in the UAE.