x Abu Dhabi, UAEFriday 21 July 2017

UAE free zones grow by thousands of businesses

Thousands of new companies registered in UAE free zones last year, despite economic uncertainty elsewhere that curbed many business startup and expansion plans.

A total of 2,033 businesses signed up with Ras Al Khaimah Free Trade Zone (RAK FTZ), an increase of 17 per cent compared with 2010. Ryan Carter / The National
A total of 2,033 businesses signed up with Ras Al Khaimah Free Trade Zone (RAK FTZ), an increase of 17 per cent compared with 2010. Ryan Carter / The National

Thousands of new companies registered in UAE free zones last year, in spite of economic uncertainty elsewhere in the world that curbed many business start-ups and expansions.

A total of 2,033 businesses signed up with Ras Al Khaimah Free Trade Zone (RAK FTZ), an increase of 17 per cent compared with 2010. That brings the total of businesses registered at RAK FTZ to nearly 10,000, a growing portion of which are seeking smaller, more affordable office space.

"We have a lot of shared services. A lot of companies are leaving their large offices, and they come in and join us," said Oussama El Omari, the chief executive of RAK FTZ. "That's why we've grown."

At Dubai Biotechnology and Research Park (DuBiotech), 33 per cent more companies set up operations within the life sciences hub last year compared with 2010, increasing the total of businesses there to 90. Some of these healthcare firms are considering manufacturing products in the Emirates, rather than importing them, as they begin working with local companies to develop customised offerings.

"I think in three to five years time, these companies [will] realise you cannot only adopt the technology that they have in the West, but perhaps also develop something that is home-grown," said Marwan Abdulaziz, the director of business development at DuBiotech.

RAK FTZ, which was established in 2000, and DuBiotech, which started in 2005, are just two of more than 30 free zones scattered about the Emirates. While registration rules can differ between free zones, officials typically attract businesses by offering them 100 per cent tax exemption and the ability to maintain full ownership of their operations - which is not always possible outside a free zone.

Of the 9,933 companies registered at RAK FTZ, more than 5,000 are considered "active", meaning company representatives visit the UAE and provide business services of some sort. While the remainder still hold unexpired licences, they do not seem to be providing services any more.

Still, the number of existing businesses that renewed their registrations at the free zone climbed last year by 16 per cent to 3,776.

New companies at RAK FTZ last year spanned a variety of sectors, with businesses specialising in marketing, information technology and building or construction being particularly well-represented. Other popular areas included food, equipment and general trading.

Both RAK FTZ and DuBiotech targeted the growth of small to medium enterprises (SMEs) within their clusters last year.

RAK FTZ has set up offices and promotion centres in Dubai and Abu Dhabi to help on this front, as well as in countries such as India, Turkey, Germany and the US.

DuBiotech, meanwhile, says high demand from SMEs spurred it to open a second business centre in July outfitted with 20 offices and workstations. Last year, the hub also attracted companies from countries that previously were unrepresented, including Turkey, South Korea and Brazil.

nparmar@thenational.ae

twitter: Follow our breaking business news and retweet to your followers. Follow us