Dubai Port visit Report

Dubai business landscape bifurcated into two parts: - Free zone and non-free zone.
For non-free zone (example mainland Dubai), an LLC needs to be signed between a
foreign company and an Emirati partner. The Emirati partner has 51% share within
this LLC while the foreign company can only have 49%. This leads to problem where
the local partner can claim up-to 51% of the profits any time, even though it may
not be involved in the operations of the LLC. Further, there are regulations that
mandate a specific number of employees to citizens of UAE. In order to circumvent
these regulations and improve ease of doing business, the concept of free zones
have been established. The key benefits of a free zone are
No need to partner with an Emirati and thus a foreign company can have
a hundred percent ownership of the firm within the free zone area.
No mandatory require to hire minimum number of local population. Also,
each free zone behaves as an independent sovereign area and thus
require visas specific to the free zone. Anyone holding a visa for a
particular free zone cannot work in any other area in Dubai
No corporate and income tax within the free zone. Also, if a company uses
the free zone area exclusively for the purpose of re-exporting, then no
custom duty is levied. However, in case the free zone area is used to
supply to the domestic market, there is a tariff of 5%
In some of the free zone, local sharia law does not apply. Instead, the
common law is applicable within the boundaries of the free zone. These
free zones can have internal courts to settle internal dispute as per the
common law. Example, Dubai International Financial Center (DIFC)
These free zones can be industry specific, for example, pharma city free zone,
internet city free zone, media city free zone, textile city free zone and financial
center free zone. Else, there can be clustered free zones like KIZAD and JAFZA
where in multiple industries are clustered together. .