“Forbes Middle East” has provided in its seventh edition an in-depth study of the free-zones, highlighting the features of these areas and the important role played by them in promoting to investors, and to what extent is it affected by the current geopolitical events. This study comes within the keenness of “Forbes Middle East” to guide the investors in the Arab region in determining the best Arab Free-zone for their business.
The Forbes Team found out that the Free-zone carries a lot of different names, such as; specialized economic zone, free economic zone, industrial zone and free-port zone. And sometimes “development zone”, as in Jordan. These are all different names for one model almost designed solely to encourage investment in the country it’s established in.
Specialized economic regions or Free-Zones are an area where companies enjoy privileges and specific economic incentives not authorized by the laws of the country outside the Free-Zones. Such as exemption from custom duties and tax rates reduced, as well as other privileges. Countries have encouraged the establishment of Free-zones at the aim of encouraging investment in specific sectors, which are often industrial or productive sectors.
Khuloud Al-Omian editor of “Forbes – Middle East”, Explained saying: “Since the beginning of the year, The Forbes Middle East Team has set out for a special investigation that shows the importance of the free zones in the Middle East and North Africa. This research has been designed to meet the needs of potential and current investors through evaluation criteria that are of importance to those of them who are currently choosing the best Free-Zone for their business.
Al-Omian added: “Our team faced several challenges in terms of collecting and classifying information in most free-zones. The lack of co-operation of some of the Free-zones and lack of transparency were the main obstacles encountered by the team. A number of free-zones refused to answer questions and inquiries. Others have bureaucratic mechanisms to obtain information, whereas the answer of some questions required permission from higher authorities. It was also noted in some cases that a number of free-zone employees were incapable of answering questions, which indicates their lack of training. It is important to help investors who are planning to expand or move to the Middle East or North Africa with their choices.”
The importance of the Free-Zones in the Arab Region are shown in the extent of the zone’s contribution to the GDP of its country. For example the free-zone in Jebel Ali (JAFZA) contributes to the GDP of Dubai by 25% annually. As well as the free-zone in Dubai Airport (DAFZ) contributes by 2.27% annually of the GDP in Dubai.
“While we were able to obtain these percentages of contributions in certain countries, we found it difficult to obtain them in others. Thus if we want to be able to learn and measure the impact of Free-zones on the economy, and help educate the people about that, transparency and clear information must be provided to support the country’s investment” elaborated Mrs. Al-Omian.
The Forbes team concentrated on two main regions, the first was the UAE because it combines more than 30 Free-Zones. 20 of them were extensively studied by Forbes. And the reason they are so successful, apart from the number of companies they hold, is the country’s political and economical stability, the many provided incentives, and the specialization of the majority of the free zones due to the ingenuity and maturity of the Free Zone concept in the UAE.
Among the most prominent experiences was that of TECOM, who established first specialized free-zones, through the creation if Dubai Media City, Dubai Internet City, Knowledge village and others.
Those regions introduced the idea of “Clusters” where a free-zone attracts a certain industry.
The second but -not any less important- was that of the Kingdom of Jordan, which has the Aqaba specialized economic zone, south of Jordan, a touristic area characterized by pleasant weather and a strategically important location on the coast of the Red Sea. It is the largest free zone in terms of area, about $ 375 km2. Its working to provide a distinctive pattern through the establishment of (ADC), a company concerned with attracting investments, promoting for them and Supporting the investor’s work.
It is a unique experience, the only in the Arab region. It has proved successful and was able to attract investments worth 16 billion dollars. The Study explores a variety of experiences and advantages of free zones in the region, in order to provide all the needs of Arab and foreign investors to take advantage of the opportunities provided by these areas.
A Brief about “Forbes Middle East”
It is a magazine that has purchased the copy rights and distributions rights from the famous US magazine, Forbes, and it covers all the stories related to the finance and business world, as well as being concerned with looking for new investment opportunities in the Arab region. Forbes Middle East is keen on putting together its lists based on the criterion of neutrality, authenticity, commitment to the methodology of scientific research, and the quality of standards set globally by Forbes through its extensive experience in this field.
Forbes Middle East also serves as a guide for businessmen and decision makers by providing them with information and statistics necessary for making the right decisions. Thus, the magazine becomes the guiding compass for investments in the region. Through its wide network of press correspondents the magazine also works toward covering all the economic fields and issues concerning the Arab region.
