Dafza cuts business set-up costs by up to 65 per cent
The move aims to boost the free zone's competitiveness and enhance foreign direct investment in Dubai
Dubai Airport Freezone Authority reduced its business set-up costs by up to 65 per cent on Sunday and is planning other initiatives as part of a drive to increase competitiveness and boost foreign direct investment.
The move supports Dubai’s economic competitiveness push as it offers free zone firms “further stability”, which in turn will sustain and drive investment growth, Dafza said on Sunday.
“This is being done through a number of initiatives and incentives that aim to attract and promote foreign direct investment into the emirate, ensuring sustainable growth across all economic sectors and strengthening Dubai’s status on the world economic stage,” said Mohammed Al Zarooni, Dafza director general.
Other initiatives and incentives are “in the pipeline”, according to the free zone.
Dafza said it had reduced registration, licence and staff visa fees for new investors by 65 per cent, 33 per cent and 20 per cent, respectively. Establishment card issuance fees have also been cut by 17 per cent, while fees for Board Resolution and Memorandum of Association issuance have been waived.
The UAE has introduced a series of reforms this year aimed at boosting economic growth, creating jobs and diversifying the economy away from oil income. The measures announced over the last few months include the waiving of corporate fines in Dubai and Abu Dhabi and allowing 100 per cent foreign ownership in companies in selected sectors from the end of this year.
Mr Al Zarooni said the reduced set-up costs were decided following a series of polls and studies to evaluate the free zone’s initiatives, services and business environment.
“We are offering unique services that take into account the global economic climate and allow customers to increase earnings and operational profits as well as achieve business growth and prosperity,” he said. “The ultimate goal is to drive local economic development and support the sustainability of direct FDI, accelerating and increasing its contribution to Dubai’s GDP.”
In June, officials and analysts told The National that some free zones in Dubai, including Dafza, were embarking on new measures to attract FDI as part of broader measures to boost the contribution of the non-oil sector to the UAE economy to 80 per cent by 2021, from the current 70 per cent, following sluggish economic growth on the back of low oil prices. The UAE recorded US$10.3 billion (Dh37.83bn) of inward FDI in 2017, up 7.3 per cent from $9.6bn in 2016, according to the Federal Competitiveness and Statistics Authority.
Other incentives being rolled out by Dafza include halving the capital requirement for new investors to Dh500,000 from Dh1m and allowing member companies to be structured as a Limited Liability Free Zone Company to provide more flexibility in business set-up, licensing and operation.
The free zone is also restructuring its licensing process and any related fees, with the new structure set to be ready for all new and existing customers at the end of the third quarter of this year. This includes waiving expiry fines to ensure investors can renew an expired licence without paying late renewal charges.
Dafza said these incentives will enhance the experience for investors looking to set up in the free zone by offering them greater flexibility in choosing the business and service activities – from the 2,000 economic activities that can be licenced across 18 sectors - that best correspond to the nature of their work.
The new licence structure will be in line with ISIC Rev 4, the UN benchmark for classification of economic activities, Dafza said.
Updated: July 30, 2018 11:41 AM