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The United Arab Emirates (UAE) is a global hub for entrepreneurship and innovation. The country has several factors that are attractive to entrepreneurs, including a supportive government and a growing economy. In an innovation-driven environment, the role of free zones is often overlooked.
The UAE has more than 40 multidisciplinary free zones where expatriates and foreign investors can take full ownership of companies. This is definitely one of the reasons why the UAE is considered the best place to do business, according to the Global Entrepreneurship Index Report 2022. At the same time, the UAE’s Vision 2031 aims to double the country’s gross domestic product (GDP) from AED 1.49 trillion to AED 3 trillion, and ranks first in the world in developing proactive legislation for new economic sectors.
Free zones attract a vibrant start-up community, where entrepreneurs from around the world come together to create a creative melting pot within a supportive structure. The high-quality infrastructure and resources of free zones significantly lower barriers to entry for new ventures, allowing entrepreneurs to focus on innovation rather than logistical challenges.
Around 90% of new startups fail to succeed, but a supportive environment that encourages entrepreneurs to experiment and take calculated risks is critical to fostering innovation. Free zones can serve as ideal testing grounds for emerging technologies, where startups can validate and refine their concepts in real-world scenarios, thereby accelerating their growth and development. The proximity of like-minded people fosters collaboration and knowledge sharing, enriching business development.
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Additionally, free zones allow new businesses to leverage their strategic locations and trade agreements to access global markets, which is invaluable for businesses with international ambitions. Free zones also attract venture capital firms, angel investors and other sources of financial support, providing new startups with the capital they need to thrive.
It is vital for governments to recognize the critical role of free zones in driving economic growth and creating jobs. Therefore, committing to supporting and investing in these ecosystems is critical to their continued success.
There are several free zones across the seven emirates, such as Dubai Multi Commodities Centre, Dubai Silicon Oasis and Ras Al Khaimah Digital Asset Oasis, providing unique advantages to new startups. For Ras Al Khaimah, a unique advantage lies in its commitment to providing a cost-effective environment, a key factor in the nascent stage of any business aiming to optimize resources and achieve sustainable growth. Additionally, the ability to hire talent is not limited by geography – a luxury often unavailable to entrepreneurs in other jurisdictions.
The diversity among the UAE’s various free zones also encourages innovation, allowing businesses to leverage their specific expertise while benefiting from a conducive environment and industry-specific infrastructure. In addition, the UAE’s free zones offer businesses the opportunity for 100% foreign ownership, a highly favorable tax environment and favorable conditions for growth, trade and investment. They have specific goals, such as promoting economic diversification, encouraging foreign direct investment and improving the overall business environment in the UAE.
So, my message to the world’s innovators is to harness the power of the UAE Free Zones, where you will find the space and freedom to dream, innovate and ultimately redefine the boundaries of possibility.
Related report: UAE startup Kyma is making (business) sense through sustainable development
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