A byproduct of globalization, popularly known as the UAQ Free Trade Zone (FTZ) is also referred to as an export processing zone (EPZ). A UAQ Free Trade Zone (FTZ) is a region that has been set aside specifically for export-focused foreign direct investment. As a result, through agreements between states, the majority of tariff and non-tariff obstacles are removed, and investments are encouraged. These incentives typically consist of the removal of taxes and tariffs, the suspension or reduction of regulations governing labor and environmental rights, and the simplification of licensing procedures for foreign businesses wishing to establish operations in the country.

Development of infrastructure

To support UAQ Free Trade Zone, host nations frequently develop infrastructure in sectors like transportation and telecommunications. If only a few natural resources are available, FTZs can be created specifically to sustain a single industry.

Nigeria’s Onne Oil and Gas Free Zone serves as one such. Because industry- and sector-specific skills are matched to the zone, a particular free trade zone may also have other advantages. Actual trade agreements, like the North American Free Trade Agreement, between trading partners, would be the next step to eliminating the tariff and non-tariff obstacles between states. An FTZ is typically used to define foreign exporting zones in less industrialized countries like Bangladesh that aim to draw in multinational firms and investment. FTZs serve as an example of the advantages of free trade.

Favorable investment conditions

These zones offer businesses favorable investment conditions while also giving developing countries access to vital capital, the ability to export, the ability to fill positions that would otherwise go unfilled or be filled by someone else, and, in some cases, the transfer of technology from multinationals to domestic industries in the host country. Through the implementation of free trade zones, developing countries can gain a competitive advantage that they would not typically have. FTZs are subject to some criticism, nevertheless. Some claim that multinational corporations unfairly exploit developing countries by taking advantage of their greater incentives and competitive advantage.

Additionally, these corporations harm local communities through unfavorable trade agreements, unethical labor practices, environmental degradation, and a lack of technology transfer.

To sum it up

When you wish to start a business in Dubai, consider investing your time and money in the free trade zone. The free trade zone has been a boon for the businesspersons contemplating establishing their business with the support of the nation. They would be given numerous opportunities to establish a successful business in the free trade zone in the UAE.