A Quarterly Newsletter from UAE and Oman member firms of the PKF International Ltd.

VOL 12, Issue 3 July 2010

FREE ZONE UPDATE

Exploring Dubai World Central

Dubai World Central (“DWC”) is a 140 km² development in Jebel Ali, Dubai, centered around the new Al Maktoum International Airport. The Dubai World Central includes the DWC Free-Zone targeting the aviation and logistics industries, which comprises of two elements:

  • Dubai Logistics City (DLC) which focuses on setting up an integrated logistics platform to establish Dubai as the leading hub for the region
  • DWC Aviation City which aspires to become the region’s premier centre of excellence for aviation manufacturing and other aviation support services.

Dubai Logistics City:

Dubai Logistics City (DLC) is an integrated logistics platform with all transport modes, logistics and value added services, including light manufacturing and assembly, in a single customs bonded and Free Zone environment.

Facts:

  • DLC – spread over 21.5 square kilometers – will be part of the world’s first truly integrated multi-modal logistics platform in a single customs-bonded free zone environment made up of DLC, DWC Aviation City and Jebel Ali Port.
  • It is designed as the region’s unchallenged logistics hub catering to some two billion people throughout the Middle East, Indian Sub-continent, Africa, all within three-to-four hours flying time from Dubai.
  • DLC consists of several groups of facilities:
    • Shared warehouses for forwarders
    • Plots of land dedicated for forwarders
    • Plots of land for logistics business of industry, trade, and distributors
    • Plots of land for dedicated facilities of integrators
    • Office buildings, ancillary services
    • Up to 16 air cargo terminals of an average of 30,000 square meters each for a total of 12 million tons of air cargo annually
  • DLC will be a free zone and will have no customs duties, no taxes, liberal visa policy, free capital transfer, 100% ownership, logistics know-how, quality labour at competitive cost and above all abundant space.
  • A bridge will link DLC and Jebel Ali Port and Free Zone allowing for goods to move freely once they are offloaded a ship / flight.
  • Sea-air lead times for transport of goods at DWC can take as less as 3-4 hours as opposed to 1-3 days at the moment.
  • DLC will assist customers to deliver superior cargo handling services.
  • DLC will enable customers to provide world-class value-added supply chain activities.
  • DLC cargo shuttle will enable forwarders to operate from DLC only:
    • Shuttle will operate like a Road Feeder Service, thus DLC will handle DXB cargo the same way as Al Maktoum International Airport cargo
    • Any cargo labeled “DWC-Al Maktoum International Airport” will arrive at DLC terminal
    • Service will be bonded around the clock for full pallets and loose cargo
    • Forwarders can build/break pallets for both Al Maktoum International Airport and DXB locations

DLC is currently targeting:

  • Logistics service providers/forwarders with focus on
    • Airfreight shipments
    • Multimodal transport needs
  • 3PL and contract logistics service providers
    • Warehousing/distribution with multimodal transport requirements
    • Value added services
  • Distributing trading and industry companies and manufacturers who need
    • Warehousing/distribution with multimodal transport
    • Light manufacturing as part of the order fulfillment process

The Dubai Logistics City (DLC) headquarters and office park of 300,000 Sq.mts is integrated with:

  • Offices for lease
  • DLC Head Offices
  • Convention facilities
  • Business hotels
  • Amenities
  • 10,000 car park

DWC-Aviation City:

The DWC Aviation City cater to all aviation manufacturing and associated industries, MRO companies, aviation support services, design and consultancy, research and development, aviation training, products and parts, light manufacturing units and high-technology industries.

Among the components of the Aviation City are the world’s largest Maintenance, Repair and Overhaul (MRO) centre; Heliport Zone; Educational and Academic Zone; Industrial Zone and a hub for aircraft component and parts supply. Aviation City will also have state-of-the-art office buildings, land plots for dedicated industrial business, MRO hangars and Heliport hangars.

Strategic Location

Based in Jebel Ali in Dubai. Aviation City, spread over 6.7 square kilometers, is being designed as a one-stop centre for all aviation-related operations. It is strategically located within Dubai World Central project, next to Al Maktoum International Airport.

Once fully completed Aviation City will provide direct access to Jebel Ali Free zone area, Jebel Ali Port and easy access to main trans emirates highway (Emirates Road and Dubai Bypass Road).

Facts:

DWC-Aviation City will house different clusters to accommodate many disciplines as one of the first-ever cities dedicated to various and unique demands of the aviation industry
Aviation City will have:

  • MRO Hangars
  • Industrial Lands for developers to design and build their required facilities
  • Light Industrial Units, for light industries and warehousing purposes
  • State of the art office park
  • Helicopter landing spots and hangars
  • Executive Jet terminal facilities
  • Cost effective staff residents within Dubai World Central project.

Aviation City is developed to host the following businesses:

  • General Aviation
  • Maintenance Repair and Overhaul
  • Fixed Based Operator
  • Light Aviation Industries
  • Low Cost Carriers
  • Research and Development establishments
  • Support Services – Design and Consultancy
  • Academic & Educational institutions

Types of Registration

Any corporate entity (i.e. a company), association, partnership or natural legal person (i.e. an individual) or any combination of the foregoing may apply to register a Free Zone Enterprise.

All Free Zone Enterprises will be registered as one of the following:

  • as a Dubai World Central limited liability company with the designation DWC-LLC
  • as a Branch of a company/organisation registered and existing outside of the DWC Free Zone (i.e. a branch of an overseas company/organisation or a branch of a UAE registered company)

All Free Zone Enterprises will be private enterprises. No Free Zone Enterprise may issue an invitation to the public to subscribe for any shares, stock or debentures in the Free Zone Enterprise.

The categories of Licenses available within DWC Free-Zone are as follows:

Logistics License

Allows the holder to carry out specified logistics services (e.g. storage, transportation, distribution, sorting, forwarding and clearing activities, order management, inventory management etc.). The license holder will be able to pick up and deliver (but not sell) products within the UAE.
PS: Only for DLC

Industrial License

Allows the holder to carry out a specified light manufacturing activity (e.g. blending, mixing, purifying, assembling forming, repacking, or wrapping of products) by utilising hand labour or quiet machinery in a manner which does not produce smoke, gas fumes, heat, light or other effects which may cause a disturbance or nuisance to others. Industrial Licenses will not be issued without proof that an Environmental Impact Assessment for the project has been carried out and approved by Dubai Municipality.

Trading License

allows the holder to import, export, sell, distribute and store items specified in the License. However, Free Zone Enterprises holding a Trading License may only sell completed products in the UAE market through a local distributor or a commercial agent which is properly registered in the UAE.

Service License

Allows the holder to carry out services specified in the License within the DWC Free Zone and elsewhere in the UAE (although additional local licenses may be required in some Emirates). Service Licenses are issued to Free Zone Enterprises supporting the logistics industry and will include services such as consulting, software, training, repair, catering, insurance, and human resources services.

Education License

Allows the holder to carry out educational and social services, educational aid training, and educational consultancy services. (Aviation field)

Facilities

The DWC has an Office park of a total area of 300,000 Sq.mts. Offices of various sizes are provided as per the needs of the investor.
Apart from the warehouses and land the most attractive facility of DWC is the “Agents Building” which has pre-built warehouses with an offices on the top. The warehouse and office in the agents building comes in various sizes. This facility is located near to the cargo terminal of the Airport. This facility will be of great interest to the freight forwarding license holders.

Share Capital

All Free Zone Enterprises registered as DWC limited liability companies must have a share capital denominated in UAE Dirhams. The minimum capital of a DWC LLC will be AED 300,000. The share capital will be divided into shares of AED 1 each.

Cost of setting up in DWC

No. Type of Service Cost (in AED)
1 Registration fee (DWC-LLC or Branch or conversion of Branch to DWC-LLC) 10,000
2 Licence fee (per package or up to 5 activities per licence) 10,000
3 Licence fee for each additional activity 5,000
4 Reservation of business name 500

Cost of facilities

No. Facility Cost (in AED)
1 Agents building: Office 59 Sq.mts and 74 Sq. mts 800 – 900 per Sq.mts
2 Agents building: Warehouse 80 Sq.mts – 1,000 Sq.mts 750 per Sq.mts
3 Office park: Offices – Minimum office size 100 Sq.mts Not finalized
4 Warehouse (80 Sq. mts to 1,000 Sq.mts) 600 per Sq.mts
5 Land (from 10,000 Sq.mts to 15,000 Sq.mts) 30 – 50 per Sq.mts

Note:

  • Land – minimum size 10000 Sq.mts for freight forwarding license

(This article has been compiled by Mr. Stany Pereira, Partner and Mr. Jawhar A., Free Zone Coordinator)