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Northern free zones beckon UAE start-ups

Start-ups have attractive options beyond the UAE’s big cities, in emirates such as Ras Al Khaimah. A look at the pros and cons

  • Eco Fresh is a mushroom farm spread over 7,000 sq m in the middle of Al Hamra Industrial Zone, Ras Al KhaimahImage Credit: Supplied
  • Entrepreneurs with bright ideas are drawn to free zones in the UAE's northern emiratesImage Credit: Shutterstock
GN Focus

With its excellent infrastructure and zero taxes, the UAE serves as a big draw for entrepreneurs looking to establish new businesses in the region. The nation continues to rank among the top 20 most competitive economies in the world, World Economic Forum data shows.

And as Expo 2020 Dubai draws closer, the government is encouraging new businesses to set up base in the UAE. With the UAE Ministry of Economy keeping this momentum going by meeting with officials of several free zones, options are now opening up across the country in one of the most competitive business sectors.

Free zones in Dubai and Abu Dhabi have long been popular options for investors but this trend is slowly shifting. The free zones in the northern emirates have swung into focus recently.

Among the benefits they offer foreign investors are speedy start-up processes, labour and immigration procedures, 100 per cent ownership, lower outlays and access to legal services.

Each has its pros and cons and every business owner must understand what works best for them.

Nirmala D’Souza OAK Consulting

Creative options

Take Nirmala D’Souza, a veteran entrepreneur in the UAE who set up Oak Consulting in 2004. Her boutique Public Relations and Communications agency helps organisations/brands stand out in a new era of hyper-connected communications. Over the past 14 years, D’Souza has worked from different emirates and says she finally feels at home at Fujairah Creative City.

“My company has been working out of Fujairah Creative City for eight years and this place works for me as it offers me the flexibility, ease of doing business and scalability at the lowest cost,” says the 44-year-old.

Setting up the business was a seamless procedure, she says. With registration through the Business Incorporation Zone, which assisted her throughout the process,  from collating the required documents to registration, partnership agreements and other formalities. She has been able to access services such as trade licence and visa renewals at the authority’s Dubai office.

D’Souza is rather happy at the moment: with multiple visas, Oak Consulting has received additional business activities as an incentive for early renewals at the free zone.

Tiran RAK

Food and farming

While some entrepreneurs focus on the ease of setting up business, others are looking for large plots of land to establish their business empire, while enjoying a good quality of life.

Eco Fresh was set up in 2012 in Ras Al Khaimah’s Al Hamra Village. “We shortlisted Ras Al Khaimah because it was away from the hustle of the city and it was nice and quiet,” explains Tiran Hakobyan, General Manager of Eco Fresh.

The emirate’s two free zones, the Ras Al Khaimah Investment Authority and the RAK Free Trade Zone, were last year brought under a single authority, the Ras Al Khaimah Economic Zone (RAKEZ).

A mushroom farm spread over 7,000 sq m in the middle of Al Hamra Industrial Zone, Eco Fresh is able to distribute its produce through several well-known companies and supermarkets in the UAE, including Emirates Catering, Spinneys and Carrefour.

For Eco Fresh, the emirate of RAK had all the facilities the company required and registration with the help of the RAKEZ team was a breeze, including getting licenses and permissions as well as in terms of cost-effectiveness, says Hakobyan, a 33-year-old Armenian.

However, idyllic locations may present some challenges, says Vaibhav Bhatia, 41, Managing Partner of Taaza Milk Foods, a producer of fresh cottage cheese.

These may include delivery costs to clients in other cities, as well as fewer options for sea and air connectivity, particularly in the case of imports and exports. “Our product is highly perishable and needs to be transported at a certain temperature to retain its freshness hence we invest quite a lot in our transport fleet,” he says.

Yet the Indian national says RAK remains his preferred base for business since the benefits far outweigh any downsides.

Among the advantages he cites are low traffic, easy proximity to the residential area from the warehouse, low visa charges and warehouse costs, good road connectivity and well-organised infrastructure in the industrial zones. Many of these plus points are unavailable in other cities.

Launchpad for students

Meanwhile, the emirate of Sharjah is looking to attract business by providing a launch pad for aspiring entrepreneurs. Sheraa (Sharjah Entrepreneurship Centre), housed at the American University of Sharjah, hosts a thriving community of students and ambitious entrepreneurs.

“Sheraa played a big role in helping launch our business forward,” says Zeyad Nader, a 24-year-old Syrian who founded Bright Mind, a product design and development firm in 2017. “It provided us with a well-equipped maker space, paid for our free zone licence and provided substantial funding to help us bring our business concept to reality.”

The approach also attracted Juxtapiece, founded by the AUS graduates and interior designers Arghavan Hatamabadi, a 25-year-old from Iran, and Hanin Hazeem, aged 23 and from Jordan. The company focuses on delivering budget-effective customization via portraits, bespoke corporate trophies, and exclusive wall features to everyone.

“Sheraa played a big role in introducing us to successful business mentors and networking events throughout the UAE. We also got support from Sharjah based Free zone (SAIF) which includes a discounted registration fees, they guided us through the business model canvas and helped us secure our initial sales,” shares Hatamabadi. 

For the Green Room, positioned as the UAE’s first online music agency, a free zone in the northern emirates allowed the company to tap into the area’s wealth of resources, history and expertise.

In addition to a straightforward registration process and only three working days to get its trade licence when she launched in 2016, co-founder Sali Elagab appreciates the access to facilities and flexi office spaces. “This makes it very convenient for a small team that is always on the go,” Elagab says.

If you are looking to set-up a new business or renew your licence, take a look at your options around the UAE — particularly as increased government spending on road and infrastructure projects aims to strengthen the industrial and tourism sectors, creating a favourable operating environment.