How Far Is Dubai Tax Free In Reality?

One of the major reasons why so many travelers flyyear tax exemption period, which is then allowed to
across Dubai's airspace is the duty free goods theybe renewed by another 15 years. Over 2000
can buy from its international airport. However,companies from across the world are functioning at
contrary to the popular belief, Dubai is not a tax freethis juncture from this free zone.
territory. It does provide certain tax incentives forDubai Internet City and Dubai Media City (DIC)
various businesses to function and grow economically.These zones were created in 1990 to address to the
The trend of tax benefits began making rounds withgrowing demands of media and communications
the announcement of Jebel Ali Free-trade zone incompanies seeking benefits on a par with the Jebel
1985. Several more have been added into this listAli Free Zone. A fifty year tax exemption is granted
since then, until recently. These additions includeinitially, and no restrictions of local partnership or
Maritime City, the Internet and Media Cities, thesponsors are applicable for the investors in these
International Financial Centre and the Airport Freeareas. Leading names such as Microsoft, Canon,
Zone.McGraw-Hill, Reuters, and CNN are already among the
Oil revenues were the main segment of Dubai's permajor stake holders of this free trade entity. Benefits
capita income in the post oil exploration period offor the investors include a highly advanced technical
1960s. This however, transformed dramatically onceinfrastructure for their business operations apart from
the free zones began showing dividends. As a result,the general tax booties they could enjoy.
no longer do they have to rely on the oil reservesThe Dubai International Financial Centre (DIFC)
for their economic well being. The amount of foreignDIFC was created in 2004 with an intent on providing
investment has been going up remarkably in the postfinancial companies with a permanent foothold in the
free zones period, and makes much of Dubai'sregion. This will lead to the strengthening of economic
commerce boost right now. We will have a quickactivities in the UAE and the Middle East as a whole.
overview of what these free-trade zones are allThere are no constraints on how long the companies
about and where they are expected to lead Dubai inmay remain under various tax benefits, thus making
the years to follow.investments in this zone far more lucrative. DIFC
The Jebel Ali Free Zonecarries six segments including the Banking Services,
The Jebel Ali Free Zone is the largest of its kind inCapital Markets, Asset Management & Fund
the entire middle east and one of the most taxRegistration, Reinsurance, Back Office Operations and
friendly across the globe. The administration hasIslamic Finance.
spent over $2.5 billion on its development since itsDubai Airport Free Zone
commencement in 1985. Closely linked with theEstablished at the international airport in 1996, the
state-of-the-art Jebel Ali Seaport and the cargoDubai Airport Free Zone already holds over 460
village of Dubai international airport, the free tradecompanies from various sectors. Benefitors enjoy
area provides amazing turnaround for sea-air100% tax exemption, 100% ownership rights, easy
transportation. It also gives an access to theaccess to airport facilities, rapid cargo clearance and
companies to an estimated consumer market of overan availability of cheap labour. Companies such as
1.5 billion in the countries surrounded by the Gulf andBang & Oulfsen, Boeing and Caterpiller are some
Red sea. Companies are initially allowed to have a 15of the stake holders in this free trade area.