Definition
A Special Economic Zone (SEZ) is a geographically delimited area within a country that operates under economic regulations distinct from the national norm. SEZs typically offer incentives such as reduced or zero taxation, simplified customs procedures, relaxed labour regulations, and streamlined business licensing. The primary objective is to attract foreign direct investment, stimulate exports, generate employment, and serve as laboratories for economic policy experimentation. SEZs encompass various subtypes including free trade zones, export processing zones, industrial parks, and free ports.
UAE Context
The UAE is one of the most prolific developers of special economic zones globally, operating over 40 free zones and specialized economic areas across all seven emirates. The model began with Jebel Ali Free Zone (JAFZA) in 1985 and has expanded into sector-specific zones such as Dubai Internet City for technology, Dubai Healthcare City for medical services, and Khalifa Industrial Zone Abu Dhabi (KIZAD) for manufacturing and logistics. UAE SEZs offer full foreign ownership, zero import and export duties, and complete profit repatriation. Following the 2020 mainland foreign ownership reforms, SEZs have increasingly differentiated through specialized regulatory ecosystems and industry clusters.
Key Facts
| Metric | Detail |
|---|---|
| Total SEZs | Over 40 across seven emirates |
| First established | JAFZA, 1985 |
| Registered companies | More than 60,000 collectively |
| Key incentives | 0% import/export duty, full foreign ownership, profit repatriation |
| Largest by area | JAFZA (57+ sq km) |
| Sector specializations | Technology, finance, media, healthcare, logistics, manufacturing |
Vision 2031 Relevance
Special economic zones are foundational infrastructure for the We the UAE 2031 diversification strategy. They serve as primary vehicles for attracting foreign investment in priority sectors including artificial intelligence, advanced manufacturing, green energy, and financial services. The national agenda positions SEZs as innovation ecosystems that generate non-oil GDP, transfer technology, and create high-value employment for the knowledge economy.