Page 59 - Focus Group

UAE Free Trade Zones & VAT

Free Trade Zone - An Introduction attract employers and thus economic activities
will take place in that area thereby increasing
A Free trade Zones (FTZ) also known as Free employment and cash flow.
Economic Zones (FEZ), Free Economic territories
(FEts) or Free Zones (FZ) are one or more areas of The biggest advantage for private companies to
the Country where tariffs & quotas are eliminated, invest in Free Zones (also known as business havens)
and bureaucratic requirements are lowered in order is liberalized rights of establishment and access to
to attract companies by floating the incentives for competitive infrastructure, transport and logistics

doing business there. facilities and services, according to an OECD report

Free trade zones are special zones where typical Benefits of free trade zones
trade barriers such as import or export tariffs do
not apply, bureaucracy is typically minimized by In general, Free Zones offer some or all of the below
outsourcing it to FTZ operators. Companies can • Enhance Global market presence in the country
seek sheltered area best suited to their needs
• Enhance foreign Exchange Earnings
The organizations set up in the Free Trade Zones
may be given tax breaks as an additional incentive. • Enhance employment
Mostly these zones are set up in the underdeveloped • Develop export-oriented industries
part of the country, the rationale that the zones will

The Institute of Chartered Accountants of India (Dubai) Chapter NPIO TAX JOURNAL 2020 59