Definition
A free zone in the UAE is a specially designated geographic area that operates under its own regulatory framework, distinct from the mainland commercial environment. Free zones offer foreign investors and companies unique incentives including 100 percent foreign ownership, exemption from import and export duties, full repatriation of capital and profits, and simplified incorporation procedures. Each free zone typically specializes in specific industries or sectors.
UAE Context
The UAE pioneered the free zone model in the Middle East with the establishment of Jebel Ali Free Zone (JAFZA) in 1985. Since then, the country has developed over 40 free zones across all seven emirates, collectively hosting tens of thousands of companies. Major free zones include DMCC for commodities trading, Dubai Internet City for technology, Abu Dhabi Global Market for finance, and Sharjah Airport International Free Zone for logistics. Following the 2020 Companies Law reform allowing 100 percent foreign ownership on the mainland, free zones have evolved to compete through specialized ecosystems and regulatory advantages.
Key Data
- Total free zones: Over 40 across the seven emirates
- Registered companies: More than 60,000 across all free zones
- Key benefits: Zero corporate tax (for qualifying entities), no personal income tax, no currency restrictions
- Largest by area: Jebel Ali Free Zone (JAFZA) at over 57 square kilometers
- Largest by membership: DMCC with over 22,000 registered companies
Significance for Vision 2031
Free zones remain critical infrastructure for the UAE’s 2031 economic diversification goals. They serve as engines for foreign direct investment, technology transfer, and non-oil GDP growth. The We the UAE 2031 vision leverages free zones to attract specialized industries in AI, fintech, green energy, and advanced manufacturing, creating sector-specific clusters that drive innovation and global competitiveness.