How Free zones advance the UAE’s economic ascent

Whilst free zones may not be a relatively new concept in the UAE, they continue to evolve with enhanced regulatory frameworks, digital initiatives and sector-focused incentives, making them more lucrative for investors than ever before. Such progress is positive news for the economy as free zones remain key drivers in economic growth, and further bolster the nation’s position as a competitive global business hub.

Currently, free zones are witnessing huge growth in businesses setting up in the region. Although there are almost 50 multidisciplinary free zones around the UAE, one of Dubai’s fastest-growing free zones for trading, brokerage, and service-oriented businesses is Dubai South Business Hub Free Zone (DSBH).

The figures speak for themselves as a spokesperson for DSBH says, “According to 2025 data from Dubai Economy and Tourism, free zones account for nearly 41 per cent of new business registrations, while non-oil sectors contribute over 75 per cent of the UAE’s GDP. Dubai South Business Hub Free Zone has emerged as one of the UAE’s most active destinations for entrepreneurs in wholesale trading, commercial brokerage, e-commerce, consultancy services, and the events sector. These sectors reflect the wider strength of the UAE’s non-oil economy, which contributed more than 74 per cent of national GDP in 2024, supported by total foreign trade exceeding Dh2.6 trillion, according to Dubai Customs.”

These bullish calculations are possibly the tip of the iceberg as the spokesperson adds, “Within the consultancy industry, the UAE market is projected to grow by approximately 14 per cent, reaching $1.8 billion in 2025. The events market is forecast to expand at a compound annual growth rate (CAGR) of 12.5 per cent, with market size estimated at $8.5 billion in 2024, rising to $27.1 billion by 2033.”

Demand for free zones

It is evident that location, connectivity and reduced logistic fees are helping fuel the demand for free zones.

“The free zone’s most dynamic growth has come from general trading, food and beverage distribution, electronics and building-materials trading, and consumer-goods import and re-export. Its proximity to Al Maktoum International Airport and Jebel Ali Port creates direct connectivity between air and sea, enabling faster regional fulfilment and reduced logistics costs for SMEs,” says the spokesperson from DSBH.

“To support these expanding sectors, DSBH provides a 100 per cent platform-based digital business registration system, multi-activity selection on a single licence, and scalable office and warehouse solutions through registered partners, designed to evolve with each business’s size and scope. Entrepreneurs benefit from a single-window service covering licensing, visa processing, and customs coordination, ensuring minimal administrative effort.”

Naturally, time is money for any entrepreneur or investor, and the ease and timeframe of setting up a business is a high priority, which is perhaps an added reason that DSBH is such a success.

According to the spokesperson from DSBH, “Dubai South Business Hub Free Zone stands out for its digital first policy, simplicity of set-up, regulatory efficiency, and strategic access to global markets. It operates through a 100 per cent digital business-set-up platform, allowing investors to complete company formation, visa processing, and licence renewals entirely online, reducing the set-up timeline to just a few working days.”

The spokespersons says that a key advantage of the free zone lies in its in-house business compliance and approvals team, which coordinates directly with relevant Dubai government departments and regulatory bodies to secure all required external approvals based on the chosen activities.

“Whether a business needs clearance from Dubai Municipality, customs, or specialised sector authorities, the team endeavours to support clients with the relevant paperwork, permits, and documentation are completed efficiently so companies can operate and trade legally from day one.”

Foreign investment

Investing in the UAE is less about chasing short-term trends and more about establishing capital in a market that has evolved into a diversified industrial and services economy with a clear long-term strategy, says Zubair Makhdoomi, Director of Sales at the Free Zones Authority of Ajman.

“The country has moved beyond its historical dependence on hydrocarbons, developing manufacturing corridors in Abu Dhabi, logistics and re-export hubs in Dubai and Ajman, technology clusters in Sharjah and Ras Al Khaimah, and specialised free zones across the Emirates that together form a solid industrial base. These domains are supported by modern infrastructure, major seaports and aviation gateways, and a regulatory environment built on speed, predictability, and investor protection.”

Of course, it also has to be highlighted that with a straightforward corporate tax system in the region, this gives the country a hugely competitive edge.

Makhdoomi says, “The UAE’s tax architecture is a core differentiator. Zero personal income tax, zero capital gains tax, and a corporate tax system that rewards genuine economic activity, especially within designated free zones, create an environment where capital is preserved and growth is scalable. Investors are not simply establishing shell structures, they are building operating entities, regional headquarters, distribution networks, manufacturing assets, and research capabilities because market access across the GCC, Africa, and South Asia is frictionless and commercially viable. The result is durable growth grounded in industry, mobility, and cross-border connectivity, positioning the UAE as a long-term destination for strategic capital.”

Incentivising investors

Whether in Dubai, Ajman, or Sharjah, free zones have succeeded in luring entrepreneurs from around the world with their many incentives. Within the publishing and media sector, Sharjah Publishing City (SPC) is offering investors a lucrative business model through its regulatory framework, cost-structure, and location.

“SPC free zone offers a strong competitive edge through a supportive regulatory framework and cost-efficient, globally connected location. With 100 per cent foreign ownership, zero corporate and personal tax, and access to over 1,500 activities under one license, companies scale quickly with minimal complexity,” says Saif Alsuwaidi, Director, SPC Free Zone

“Flexible license packages, scalable office options, and transparent costs help businesses of all sizes reinvest in talent, technology, and market growth instead of administrative burden.”

SPC has built a next-generation business environment where technology, speed, and scalability drive operations.

“For publishing, media, and creative companies undergoing digital transformation, our smart infrastructure is a key advantage,” he says.

Business growth in Sharjah

Sharjah is ideally located for growing investments and trade. “Located at the heart of the UAE’s cultural and knowledge economy, SPC provides direct access to a vibrant creative market, leading book fairs, and global trade routes giving publishers and media companies the clarity, efficiency, and reach they need to grow and compete internationally,” Alsuwaidi says.

Meanwhile, at the nearby Sharjah Media City (SHAMS), Director General, Rashid Al Obad, explains its draw for entrepreneurs.

“Affordability and efficiency are at the heart of SHAMS’ appeal to emerging entrepreneurs. With streamlined procedures and competitively priced packages, founders can allocate more resources towards building their product, expanding their network, and refining their creative output. This ease of entry is crucial for nurturing a thriving creative community; one where ideas flow freely, talent feels supported, and businesses can grow without the strain of heavy financial commitments. In making set-up simple and accessible, SHAMS free zone cultivates an environment where creativity can flourish from day one.”

Through free zones such as SPC and SHAMS, there is high-value growth in the media, publishing and creative sectors which are also helping contribute to the region’s economic growth.

“Free zones like SHAMS are driving sustainable, high-value growth in the media and creative sectors by offering an ecosystem tailored for innovation, talent, and entrepreneurship,” says Al Obad.

“With flexible licensing, affordable packages, and fully online set-up, SHAMS attracts start-ups, freelancers, and SMEs, fostering collaboration and cross-disciplinary ventures.”

Thanks to expert collaboration, progressive policies, state-of-the-art infrastructure, and digital initiatives, launching a business has never been easier than it is today. Since entrepreneurs are a driving force of the nation’s economic growth, free zones will continue to play a pivotal role in propelling the UAE into its next stage of development.