Freedom of choice

Jabel Ali Free Zone (JAFZ).
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The many benefits of Free zones cannot be ignored but, with the possibility of a new ownership law coming into place, will construction companies decide to take their business elsewhere?

The fast developing Middle East has proven to be a key area of opportunity that is too good to miss for foreign investors hoping to expand into an international market and offer their services to the construction sector.

Despite the downturn, projects are progressing in the region and there is still a demand for building materials, which is expected to increase as the economy gradually picks-up.

But, where is the best place for these companies to do business?

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SETTING UP SHOP
Since their introduction into the UAE, free zones are arguably the best place to set up shop. The main reason being – they play a vital part in the growth of the economy by allowing companies to operate with 100% foreign ownership and 100% exemption from income and corporate taxes.

The construction industry is benefiting from this in two ways: the ability to set up in the UAE without altering their global company status and operational methods, and secondly, the ease with which foreign firms can operate in the free zones has meant a wider choice of international standard services and products are readily available in the local market.

Free zones also provide easy access to airports and seaports, which is ideal for companies importing and exporting cargo.

“We provide our clients with a key location at the apron of the busiest airport in the Middle East. This unique advantage offers unparalleled convenience to businessmen,” says Dubai Airport Free Zone (DAFZ) director general Mohammed Al Zarouni.

“Easy access to the airport reduces cargo costs, which results in an increased profitability of products.”

SIGNS OF GROWTH
The popularity of free zones has grown in recent months, even amid the global crisis, according to recent reports.

“The market is improving,” says George Abraham, marketing manager of Global Resources, a consultancy firm, which helps foreign companies set up in UAE free zones.

During the summer Abraham said monthly enquiries fell to around 200, but since Ramadan the market had improved and now they were receiving closer to 350 a month.Interest has mainly come from within the Middle East, mostly from Saudi Arabia and Kuwait and Qatar.