Dubai to create new ‘Super’ Free Zone Authority
In Blog Dubai
A new body – the Dubai Integrated Economic Zones (DIEZ) Authority – is to be created to oversee the Dubai Airport Free Zone (DAFZA), Dubai Silicon Oasis (DSO) and Dubai Commerce City (DCC). Companies and individuals licensed under the DIEZ will be exempt from all taxes, including income tax, for 50 years as of 1 January 2022.
This new Authority is part of the Dubai government’s strategy to expedite the pace and efficiency of services for businesses and improve the ease of doing business in Dubai, as well as to promote Dubai’s economic competitiveness, with the focus on retail, technology, Islamic economy, e-commerce, industrial, logistics and shipping sectors.
Its key objective of the DIEZ Authority is to attract local and international companies to set up their headquarters in its free zones, and to support SMEs and drive entrepreneurship and innovation across sectors.
More than 5,000 international firms, covering 20 key economic sectors and employing more than 30,000 people, will operate under the DIEZ. The DAFZA, DSO and DCC free zones together generate some 5% of Dubai’s gross domestic product.
According to Law No. (16) of 2021, the DIEZ Authority will be an independent legal entity with financial and administrative autonomy in respect of developing and overseeing the infrastructure and administrative services of the Integrated Economic Zones. As such it will be responsible for licensing, regulation, business activities and set-up services.
Companies and individuals licensed under the DIEZ are to be exempted from all taxes, including income tax, for 50 years, effective from the date of the new Law. All subsidiaries of the DIEZ Authority, and companies and individuals licensed by the DIEZ, will also be exempt from any restrictions on the repatriation of capital, profits and salaries in any currency and to any destination outside the DIEZ free zones.
This exemption will be valid for 50 years and will be renewable for a similar period at the discretion of the Ruler of Dubai. The funds of licensed companies and their employees will also not be subject to nationalisation or restricted ownership rules.
In addition, the operations of the DIEZ and companies licensed by it are not subject to the regulations of Dubai Municipality or Dubai Economy, except in the case of regulations related to safety, security and food control, or any other regulations clearly designated as applicable within free zones.
Sheikh Ahmed bin Saeed Al Maktoum has been appointed as the chairman of the DIEZ Authority and Dr Mohammed Ahmed Al Zarouni as the executive chairman.
The DAFZA, DSO and the DCC are among the premium free zones in Dubai and their integration under a single ‘super’ Authority is likely to streamline the process of business set-up in Dubai. The new law and appointment decrees will be published in the Official Gazette and are to be effective from 1 January 2022. Sovereign will provide further information as and when it becomes available.