UAE free zone lures Indian companies

Indian companies are making a beeline to set up units in the Gulf region. Over 10,000 companies have already set up units in the United Arab Emirates (UAE) in the last few years and many more are eyeing the free trade zones in the region.

In the last five years, over 200 of the 580 companies to set up offices in the Hamriyah Free Zone (HFZ) Sharjah are from India. The trade volume between India and UAE is more than that between UAE and other Gulf countries.

"The investment incentives provided by our free zone include 100 per cent foreign company ownership, ememption from import and export tax, commercial levies, 100 per cent repatriation of capital and profits, 15-year renewable leases. No corporate taxes and no personal income taxes are applicable for units set up in our free zone," Rashid Al Leem, director general, Hamriyah Free Zone Authority, said on Saturday.

The companies that have set up units at HFZ in the last few years include Larsen and Tubro, Iffco, Blue Star, Loyds, Emitates Techno, D C Mills. Indian companies account for over 26 per cent of the business in HFZ.

"International trade with Middle East countries forms an important aspect in our global trade. Traditionally, India has very warm and dynamic business relationship with the Middle East region. The facilities and the attractive incentives offered in the free zones in the region is extremely helpful for our entrepreneurs in furthering their business activities," said Chinubahi R Shah, president, Gujarat Chamber of Commerce and Industry (GCCI).

With the dismantling of the quota regime from January 1, 2005, foreign trade has become an important sector in the globalised, resurgent and buoyant Indian economy. India has logges a 8.2 per cent growth in its economy during 2003 - 2004.

Its exports grew 25.57 per cent in the first four months of the current financial year to $21,931.1 million from $17,465.8 million recorded in the same period last year.

"HFZ is strategically located near Hamriyah port in Sharjah, the largest emirate of UAE. Sharjah has an enviable network of infrastructure such as highways, international airport and is also well linked with entire Middle East region. Its proximity with Abu Dhabi and Dubai and the most modern telecommunication network are another attractions for the Indian companies to set up their units there. Moreover, HFZ also boasts of fairly deep draft port capable of accomodating large size vassels and with other efficient services such as power supply, labour force, access to other Sharjah ports provides ideal business conditions," said Leela Karunaratne, senior sales officer, Hamriyah Free Zone Authority.