Trade in the Free Economic Zones of the UAE

15 / 07 / 2020

Along with the extraction and refining of oil and gas, trade is one of the largest activities in the UAE, which replenishes the state budget and attracts foreign investment.

Due to its location in the center of trade routes between Asia, Africa and Europe, the UAE is one of the largest re-exporters in the world. The Free Economic Zones, specially created by the UAE government to attract foreign investment in the development of import or export of goods, help to remain the main re-exporter of the UAE.

Also, due to the current political and economic situation in the UAE, more than 75% of emigrants from the total population live and work. All of them have their own consumer priorities and habits. Annually, goods worth more than 60 billion US dollars are imported into the UAE. Also, the demand for imports provides an increase in the welfare of residents of the UAE. Among the main goods imported into the UAE are textiles, machinery, vehicles, agriculture, food, and so on.

Free Economic Zones have seaports and airports on their territory, huge unloading warehouses, storage facilities for imported goods, convenient and fast customs points, etc.

The main opportunities and restrictions on trade in the Free Economic Zones include:

    • The existence of 2 types of registered companies;

You can open both onshore companies and offshore companies on the territory of FEZ. In the UAE, there are 3 Free Zones in which registration of offshore companies is allowed.

The differences in onshore and offshore are the conduct of activities in the UAE, as well as the possibility of obtaining a residence permit in the UAE.

    • 2 types of trade licenses in the UAE;

A regular trade license is issued for trading no more than 5 types of goods in the UAE. A general trade license is issued if it is necessary to trade in real estate market, stocks and other securities market, etc.

    • Duties and taxes;

Companies are exempt from income and corporate taxes. VAT is only 5%. There are no export duties, and virtually no import duties on goods in the UAE. When goods are imported into the UAE, a 5% fee is paid, which is refunded if that the goods have been exported within 6 months.