The UAE Free Trade Zones - Research Paper Example

? UAE Free Trade Zones al Affiliation) Introduction Free Trade Zone is not a novel conception. It is in any case as old as civilizations of the West, having subsisted in 300 BC in the Delos a Greek island, which thus turned into one of the richest islands in the planet for almost a century. It is projected that there are currently well over 1000 Free Zones in use, in about 120 nations (UAE Government, 2008). The rationale for this noteworthy enlargement is that Free Trade Zones have been an unusual system for nurturing industrialization that is export-led worldwide. They advance fiscal improvement by drawing investment and creating employment and overseas exchange income. Without a doubt, the zone conception is so dominant, that to a greater extent nations are distinguishing a novel exemplar of Free Zones. Whilst the old Free Zone was time and again illustrated as stationary, labor-demanding, motivation driven, the novel zone model is a dynamic investment demanding, one that is administration driven, facilitating an incorporated fiscal development device. In the UAE, the initial Free Zone at Jebel Ali came into being in 1985 and made available intercontinental businesses and firms a focus, which linked the East and the West and stretched out the prospects of their maneuvers (UAE Government, 2008). Nowadays there are over 24 Free Zones in the UAE offering first-rate amenities and communications for carrying out business and most significantly are industry detailed in nature. Abu Dhabi Airport Free Zone The Airports Company of Abu Dhabi is setting up Abu Dhabi Airport Free Zone also referred to as ADAFZ. It is a commerce and logistics park, to be functioned as a free zone (UNDP, 2002).With Abu Dhabi having the largest population in the UAE, as shown in the chart below, it becomes suitable for setting up of the Free Trade Zone. Figure 1: UAE population figures by the Emirates Source: http://adafz.ae/images/adafza-brochure.pdf Every justifiable logistics actions apart from banking are permissible in the park, conditional on the observance to the surroundings, health and safety necessities. As the park is located near the suburban region, all actions ought to be friendly to the environment. An investor ought to encompass a let out amenity to acquire the license to work from the park. There are straightforward and proficient measures for handling of cargo and authorization. ADAFZ is working together closely with Ports Company of Abu Dhabi for haulage of commodities from the park. There are no explicit restrictions of labor. However, the visa will be given out founded on the approval of the government. Once the imbursement is completed in conjunction with the obligatory credentials, the registration will take just two days of work. Corporations can let out offices, plots of land or Industry of Light Units founded on accessibility. A corporation can contain multiple amenities (Kemp, 2002). All services are priced as per usage by the confined giver. Numerous business sectors are being persuaded, a number of them being, Logistics, cargo & freight, Aviation & aerospace Electronics, Computers, internet and IT Electrical, Consultancy and business development, medical equipment, Telecom, express transportation, and pharmaceuticals. ADAFZ offers three sorts of commerce licenses; license of trade, license of service and an industrial license (Mustafa, 2002). FTZ1-Positive Contributions to the UAE This trade park provides the clientele with a dynamic overcrowding, an environment that is free. They proffer rapid and proficient clearance cargo services. Entry to the apron of the airport in addition to global shipment forward, and agencies of cargo clearance is readily obtainable. Onsite inspection amenity of cargos is given. ADAFZ offers all inclusive shop resolution for every investor necessities and overhauls (UNDP, 2003). The amenities can be obtained daily with online client support scheme. A variety of services such as commerce registration, certification, letting, member of staff correlated services, maintenance and other functional overhauls are made effortlessly accessible. FTZ1-Negative Contributions to the UAE However, the Abu Dhabi Airport Free Zone has a number of disadvantages. The Abu Dhabi Airport Free Zone is not allowed to encompass processes with the main land corporations and with the authorities; limits in visas and other commerce communications. Assessment prerequisite is obligatory in the free zone setup on every fiscal year; business cannot lease mainland property; business cannot continue the actions such as banking, insurance etc. There are also limits to acquire visas for employment; and Office ought to be leased in the Free zone however, not in other regions lawfully (Verma, 2009). Raw materials can not be warehoused for over three months under the regimen of free trade zones. In spite of the fact that free trade zones are capable of making buys that are local with no charges on tax, there is a lot of paperwork engaged than expected. FTZ1-Benefits to investors The financiers can establish their trade right away using the saleable offices which come in ready to use the provision. Most modern ICT communications are offered. A company can also go for Light Industrial Unit where they can carry out assembly that is light and storing. The Free Zone proffers serviced plots of land additionally for putting up industrial processes. The commerce park is set with the high-tech business center with conference amenities and postal overhauls. In addition, banking and insurance amenities are preparedly accessible (Mustafa, 2002). There are dinning places, hotels and restaurants to supply to the diverse client requests. The commerce park has health centers and agencies of travelling and fueling stations. ADAFZ proffers exceptional site advantage with one of the largest airports of the area being right nearby. This ensures access to an enormous market extend across Asia, Europe, Middle East and Africa. With the emergent economy and commerce openings all around, financiers can get themselves in the midst of extremely lucrative business setting. These particulars, together with the consumer centric overhauls make the ADAFZ a rapid emergent commerce destination. FTZ1-Strategies for Growth In an attempt to endorse novelty and private enterprise, the Airport Free Zone started an Enterprise Center and Incubation Center for Business founded on international finest practices. Business incubation is a commerce prop up procedure that fosters the flourishing improvement of start-up businesses by giving capitalists with a variety of targeted assets and overhauls (Mustafa, 2002). A commerce incubator’s key objective is to create thriving firms that will depart the program fiscally viable and self-supporting. The enterprise center is a high standard, full overhaul commerce incubation and offers a helpful, physical, and rational setting for novel business undertakings that have a well-built possibility to develop into flourishing ventures and add to the fiscal expansion of UAE. Dubai Media City Dubai Media City was formed as an international focus for media industries to develop jointly. Proffering a first-rate setting for all probable media production, DMC fosters media and marketing, issuing and distributing, music, movies, novel media, vacation and amusement, broadcasting and agencies of information (Pan Arab Research Center, 2003). DMC has been formed with a duty to offer first-rate enabling overhauls to media production. With the solid conviction in the ‘liberty to Create’ conception (Al Bakry, 2001), DMC endeavors to make available the obligatory communications and inducements to businesses to discover the enormous unexploited markets, easily reached from this stage. To endorse and foster the media industry DMC has instigated International Zone of Media Production, proffering the state of the art production amenities (Kelaita, 2001). FTZ2-Positive Contributions to the UAE DMC has an array of real estate proffering apposite to diverse kinds of media industries. There is saleable office space, attic offices, offices for boutique and retail room obtainable. Every DMC office spaces are cabled and elegantly complete, proffering the inventive space obligatory for the media experts. DC offers assistance in visa dispensation and habitation and access authorization processing, and overseas processing of visa; interfacing with the agencies of government. The financiers are allowed to pay for one member of staff for every 80 sq. ft. of rented space. FTZ2-Negative Contributions to the UAE Dubai Media City has a lofty least amount of capital obligation of US$70,000 that is equivalent to Dhs250, 000, which ought to be paid up at some point in integration (World Bank Group, 2005). Dubai Media City Free Zone has lofty license charges measured up to other free zones. For instance, the yearly fee billed to the Dubai Media City authority for a saleable license is US$6,800 that is equivalent to Dhs25, 000. Dubai Media City business structures stay close to two months to complete. Drudges and small businesses are unable to take advantage of minimal input charges in other nations. Organizations in free trade zones are at all times in competition with each other which leads to restructuring. Dubai Media City may impact a number of regions more than others in relation to the degree of fiscal progression. This under-progression may have an effect on the GDP of the nation and lower the entire exports of the nation. FTZ2-Benefits to Investors DMC proffers its associates a variety of exceedingly scalable and most recent technology founded IT communications. The IT and telecom overhauls have been planned and run making sure the uppermost accessibility and performance corresponding the intercontinental principles. DMC proffers telecom, LAN, WAN, Internet and services of hosting as requisite by the industries. A widespread associate exultations program is run at DMC, enveloping an intricate list of overhauls and structures which will assist make certain a flourishing joint venture. In the course of a variety of boundaries and assessments, the department makes certain that the say of the purchaser is heard and rapidly acted upon. The associate affiliation department also interrelates with other divisions to make certain that the major results of the analysis are acted upon to make sure ever progressing consumer contentment (Morrison, 2000). Founded on the feedback of the client, exploration and improvement of novel goods and overhauls is also taken on. Whichever form of supplementary visa requisites is also processed. The subdivision also produces networking procedures to endorse the associates and counterpart potential business openings. Study and scrutiny of the associate dealings and profiles are accumulated to help out their development. They also assist shooting authorizations at DMC. The service department of hospitality assists the latest workers of the associates to move to Dubai, from finding the residence to shifting the goods of the household. The division also cares for local expeditions, haulage, and suburban furnished dwellings. The commerce center proffers licenses to the following groupings of media industries; Broadcasting, services of Media and marketing, services of Business & Information, services of New Media and Media support, Events and Music, amusement and Leisure, issuing, motion picture amusement / Production, and Freelancers (Tejari, 2005). Four sorts of officers are offered; senior managers Offices, Executive counters, Open Offices and Hot reception desks; catering to the diverse commerce requirements and financial plans. Founded on the office space rented the figure of staff are allowed. FTZ2-Strategies for Growth From the time, when it commenced the City has constantly progressed remarkably. The society comprises intercontinental media missives for instance Bertelsmann, CNBC, Showtime, MBC, Sony, CNN, and Reuters. DMC has also initiated Media Business Centers to promote talent and entrepreneurship in the area. These exceptional services are aimed at freelancers and independent media experts. In June of 2001, the Ibda’a Awards for Media Student were started on, a yearly occasion carried out by Dubai Media City to be familiar with and prop up young media abilities in the region (Walters & Quinn, 2003). The Awards of Ibda’a envelop lots of media correlated groupings. In July of 2003, DMC set up the intercontinental Media Production Zone also referred to as IMPZ, the primary free zone in the region dedicated to media correlated production actions, pointing on the issuing, publishing, and wrapping sectors. Increasing worldwide alertness in Dubai as a motion picture production purpose led to a novel inventiveness, Dubai Studio City (DSC), average in February of 2005, DSC is ardent to the manufacture of music, TV saleable, motion pictures and transmission. Dubai Media City is placed to additionally build up its communications to proffer value-added amenities for a wealthier and more varied general public. Employment rules – Inside and Outside a Free Trade Zones In Free Trade Zones companies have a written employment contract representing terms and conditions of overhauls encompassing the category of the staff member, regular working hours , pay rate, training period, if necessary the probation period, leave, vacations and contributions of superannuation’s which has to be given out each staff member and recognition of the receipt acquired by the employer. Normally, a day of work equals 8 working hours, where also one is given a one hour lunch break or rest. This rules apply in and out of Free Trade Zones however, there is a small disparity when it comes to night shift. In Free Trade Zones, there are limitations for females working at night whilst outside the Free Trade Zones there are no restrictions. Nevertheless, in both basic disciplinary issues are observed and an employer may put to a stop the overhauls of a staff member on disciplinary grounds, given that the basic procedures of discipline are followed. The employment of persons under the age of 15 is prohibited both inside and outside the free trade zones. Prior to employing a person, the employer ought to obtain the persons certification of birth, a certificate of healthiness issued by a certified physician and a written approval from the persons caregivers. Additionally, employees are entitled to National holidays with full wage given on those occasions. The score of a country over time (2011 Index of Economic Freedom retrieved from http://www.heritage.org/index/country/UnitedArabEmirates) . Reference 1. Al Bakry, A. (2001). "Media advised to implement liberty". Gulf News. 2. Kelaita, Kim (2001) "Dubai venturing in the information business". Time magazine, volume 155 number 21, 4. 3. Kemp, L. J. (2002). Organizational panel, contemporary and postmodern perceptions in prime health care. British Library. 4. McDougall, Dan. (2006). Economy of Dubai. The Guardian. 5. Morrison, A. J. (2000). Building up a global leadership replica. Human Resource Management Journal, 6. Mustafa, A. (2002). "Function of Novel Media in fiscal Change, in the Arab Globe." Arab World conference. Amman, Jordan. 7. Pan Arab Research Center. (2003). The United Arab Emirates. Pan Arab Research Center. 8. Sirri, O. (2003). Can Dubai’s Media City deliver?" Cairo Times, Volume 6, Issue 43. 9. Tejari. (2005). The future of commerce [website]. 10. UAE Government. (2008). 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