How Far Is Dubai Tax Free In Reality

How Far Is Dubai Tax Free In Reality



One of​ the​ major reasons why so many travelers fly across Dubai's airspace is​ the​ duty free goods they can buy from its international airport. However,​ contrary to​ the​ popular belief,​ Dubai is​ not a​ tax free territory. it​ does provide certain tax incentives for various businesses to​ function and grow economically. the​ trend of​ tax benefits began making rounds with the​ announcement of​ Jebel Ali Free-trade zone in​ 1985. Several more have been added into this list since then,​ until recently. These additions include Maritime City,​ the​ Internet and Media Cities,​ the​ International Financial Centre and the​ Airport Free Zone.

Oil revenues were the​ main segment of​ Dubai's per capita income in​ the​ post oil exploration period of​ 1960s. This however,​ transformed dramatically once the​ free zones began showing dividends. as​ a​ result,​ no longer do they have to​ rely on​ the​ oil reserves for their economic well being. the​ amount of​ foreign investment has been going up remarkably in​ the​ post free zones period,​ and makes much of​ Dubai's commerce boost right now. We will have a​ quick overview of​ what these free-trade zones are all about and where they are expected to​ lead Dubai in​ the​ years to​ follow.

The Jebel Ali Free Zone

The Jebel Ali Free Zone is​ the​ largest of​ its kind in​ the​ entire middle east and one of​ the​ most tax friendly across the​ globe. the​ administration has spent over $2.5 billion on​ its development since its commencement in​ 1985. Closely linked with the​ state-of-the-art Jebel Ali Seaport and the​ cargo village of​ Dubai international airport,​ the​ free trade area provides amazing turnaround for sea-air transportation. it​ also gives an​ access to​ the​ companies to​ an​ estimated consumer market of​ over 1.5 billion in​ the​ countries surrounded by the​ Gulf and Red sea. Companies are initially allowed to​ have a​ 15 year tax exemption period,​ which is​ then allowed to​ be renewed by another 15 years. Over 2000 companies from across the​ world are functioning at​ this juncture from this free zone.

Dubai Internet City and Dubai Media City (DIC)

These zones were created in​ 1990 to​ address to​ the​ growing demands of​ media and communications companies seeking benefits on​ a​ par with the​ Jebel Ali Free Zone. a​ fifty year tax exemption is​ granted initially,​ and no restrictions of​ local partnership or​ sponsors are applicable for the​ investors in​ these areas. Leading names such as​ Microsoft,​ Canon,​ McGraw-Hill,​ Reuters,​ and CNN are already among the​ major stake holders of​ this free trade entity. Benefits for the​ investors include a​ highly advanced technical infrastructure for their business operations apart from the​ general tax booties they could enjoy.

The Dubai International Financial Centre (DIFC)

DIFC was created in​ 2004 with an​ intent on​ providing financial companies with a​ permanent foothold in​ the​ region. This will lead to​ the​ strengthening of​ economic activities in​ the​ UAE and the​ Middle East as​ a​ whole. There are no constraints on​ how long the​ companies may remain under various tax benefits,​ thus making investments in​ this zone far more lucrative. DIFC carries six segments including the​ Banking Services,​ Capital Markets,​ Asset Management & Fund Registration,​ Reinsurance,​ Back Office Operations and Islamic Finance.

Dubai Airport Free Zone

Established at​ the​ international airport in​ 1996,​ the​ Dubai Airport Free Zone already holds over 460 companies from various sectors. Benefitors enjoy 100% tax exemption,​ 100% ownership rights,​ easy access to​ airport facilities,​ rapid cargo clearance and an​ availability of​ cheap labour. Companies such as​ Bang & Oulfsen,​ Boeing and Caterpiller are some of​ the​ stake holders in​ this free trade area.

The Dubai Maritime City

The Dubai Maritime City will be the​ latest addition to​ the​ growing list of​ free zones in​ Dubai. an​ estimated marine area of​ 2.5 million square meters will be handed over to​ the​ marine and maritime related industries. the​ zone is​ expected to​ be completed before the​ end of​ 2018.

As Dubai’s administration continues on​ with their free trade policies,​ the​ share of​ oil revenues in​ the​ GDP is​ bound to​ go down further with each passing year. the​ development of​ free zones was aimed on​ achieving this miracle for Dubai's populace and they have handsomely succeeded in​ doing so until this date.




Related Articles:



Related Topics:

Tax News - Tax Guide - Tax Tips - Tax Advice - Tax Videos - Tax Support - Tax Questions - Tax Answers - Tax eBooks - Tax Help



Powered by Blogger.