
NEWS

UAE Strengthens Anti-Money Laundering and Counter-Terrorism Financing Framework
• As of September 23, 2024, the UAE Cabinet has approved a resolution replacing the Executive Office of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CTF) with the newly established National Anti-Money Laundering and Combating Financing of Terrorism and Illegal Organisations Committee (NAMLCFTC). This committee will assume all the rights and obligations previously held by the Executive Office. • The transition, which took place in accordance with Federal Decree Law No. (7) of 2024, also mandates that all employees of the Executive Office be transferred to the NAMLCFTC. • As part of the reforms, a General Secretariat has been established within the NAMLCFTC, tasked with overseeing the implementation of the national strategy on anti-money laundering and countering the financing of terrorism. This move reflects the UAE’s ongoing commitment to protecting both its domestic and international financial systems from illegal activities. • The creation of the NAMLCFTC aims to enhance coordination and communication between local and federal institutions, as well as improve international cooperation. This effort is seen as a vital step in reducing financial crime risks while reinforcing the UAE’s position as a leading global financial hub, promoting economic sustainability, and ensuring compliance with global standards.
Free Zones in UAE: types and advantages
In the dynamic growth of the United Arab Emirates (UAE), the concept of free zones has emerged as a powerful engine of economic transformation. These specialized economic zones, play a great role in the UAE’s grand strategy of economic diversification. In MEA region historically depends on oil revenues, these free zones are attracting businesses from every corner of the world. Their allure lies in the unique benefits and incentives they offer – tax exemptions, streamlined regulations, and 100% foreign ownership. The number of Free Zones in UAE is now 47 with the recently established Sharjah Communication Technologies Free Zone. Let’s explore the different types of free zones in the UAE. Free Trade Zones Free Trade Zones in UAE are designated areas where businesses can operate with special regulatory and economic privileges. The primary purpose of establishing FTZs is to attract foreign direct investment, promote economic diversification, and boost trade by creating a business-friendly environment with simplified procedures and reduced barriers. Export Processing Zones Export Processing Zones (EPZs), also known as Free Export Zones, are specialized areas within a country where goods are produced, processed, and exported with specific incentives and benefits. In the UAE, EPZs are designed to promote export-oriented industries and attract foreign investment. These zones are strategically located near transportation hubs, such as ports and airports, to facilitate efficient logistics and distribution. Special Economic Zones Special Economic Zones (SEZs) in the UAE are designated areas that offer unique incentives, regulations, and infrastructure to attract domestic and foreign investments. These zones are established to enhance economic diversification, promote innovation, and drive sustainable growth. SEZs are designed to create a conducive environment for various types of businesses, including manufacturing, technology, logistics, and more... Industrial Zones Industrial Zones in the UAE are specialized areas designated for manufacturing, processing, and other industrial activities. Industrial zones provide a supportive environment for businesses engaged in manufacturing, production, and related activities, offering various facilities, infrastructure, and incentives to facilitate their operations. Benefits and Limitations of Different Free Zone Types Detailing the Advantages of each Free Zone type 1. Free Trade Zones (FTZs) cater to a wide range of industries, promoting economic diversification and attracting various types of businesses. Also, businesses in FTZs benefit from tax exemptions, 100% foreign ownership, import duty exemptions, and streamlined customs procedures to reduce import/export costs and delays. 2. Export Processing Zones (EPZs) encourage export-oriented production, contributing to a country’s export revenue. For this reason, there are customs duty exemptions on raw materials to reduce production costs. Furthermore, EPZs provide industrial facilities and logistics support to optimize business operations and generate employment opportunities to improve local economies. 3. Special Economic Zones (SEZs) promote economic diversification by attracting investments across various industries and attracting foreign direct investment through tax incentives and business-friendly policies. SEZs often encourage research and development to foster innovation. 4. Industrial zones provide dedicated infrastructure for manufacturing and production activities, provide storage facilities in UAE and encourage shared facilities to reduce operational costs and capital investment. Explore Any potential Limitations or Considerations 1. Free trade zones (FTZs) focus on international trade, which might limit access to the local market. Free zone businesses in certain sectors might find more specialized free zones better suited to their needs. 2. EPZs’ focus on exports can make businesses vulnerable to fluctuations in international markets. Additionally, businesses solely focused on the domestic market stand to benefit from export processing zones. Yet, adhering to export regulations and standards in EPZs can be complex. 3. Essentially, the diversity of industries within Special Economic Zones (SEZs) can lead to heightened competition. Changes in government policies can impact business operations. Also, balancing between attracting foreign investment and benefiting the local economy can be challenging. 4. Industrial zones involve managing heavy industrial activities with potentially harmful environmental implications. As a result of these environmental or safety concerns, some activities might have zoning limitations.
