Dubai Airport Free Zone is fastest-growing in Middle East

by Carol on July 19, 2012

in Business

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Proximity to one of the world’s busiest airports helped the Zone to grow by 110 per cent in 2011

Dubai Airport Free Zone grew by 110 per cent in 2011 compared to a year earlier, making it the fastest-growing free zone in the Middle East.

There were 202 new registrations of companies in 2011 pushing the total number of firms in the Dubai Airport Free Zone up to 1,600. In total, Dubai’s 22 free zones form a critical part of the emirate’s economy, contributing 33 per cent to GDP, according to the Airport Free Zone Director General Dr Mohammed Al Zarooni.

General business sector

The biggest growth in the Dubai Airport Free Zone in 2011 was in the general business sector, which expanded by 139 per cent, with 151 new companies. The next biggest growth came in the services sector, in which there were 48 new companies, a 45 per cent increase on 2010.

The highest share of the new businesses at Dubai Airport Free Zone came from the Gulf Cooperation Council states (27 per cent), with Europe close behind with a fifth. European companies now account for more than a third of Dubai Airport Free Zone’s tenants. Germany and France are the most active Europeans, with brands such as Audi VW, Bauer International, Chanel and Clarins.

Indian expansion

Meanwhile, a good sign for the future was the huge rise in the number of Indian firms in the Zone. They were first in year-on-year growth, with a 150 per cent rise. The Indian companies were taking advantage of the growth in their domestic market and motivated to expand by the new globalization policies of their bosses.

Nearly 15 years after it was set up, the Dubai Airport Free Zone has become one of the biggest areas for foreign investment. It has benefited enormously from being situated close to one of the world’s biggest airports.

According to the Zone’s chairman, Sheikh Ahmed bin Saeed Al Maktoum, it accounts for nearly 6 per cent of Dubai’s total foreign trade (around Dh52 billion).

Good news for investors

The steep rise in foreign investment in Dubai’s free zones is great news for investors in the emirate. It is further evidence that Dubai has bounced back strongly from the financial crisis of 2008, and that its property market is more stable and dynamic. This should spark interest in the many new hotel developments, such as The First Group’s two luxury hotel apartment projects in Tecom, Metro Central and Grand Central, which are situated in the bustling business district of Tecom in the heart of “New Dubai”. The luxury end of the market did particularly well in 2011, soaring 17.6 per cent.

Meanwhile, the frees zone of Dubai Airport and foreign trade zone of Dallas/Fort Worth International Airport, have agreed to create a “cooperative business channel” aimed at exchanging expertise and benefiting from business opportunities in global markets. The two parties signed a Memorandum Of Understanding (MoU) which set forth a framework for a collaborative alliance.

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