CUSTOMS CLEARANCE PROCEDURES FOR FREE TRADE ZONES IN THE UAE
FEBRUARY 2024
The United Arab Emirates (UAE) has become a global hub for trade and commerce, with Dubai being at the forefront as a key logistics center in the Middle East. With its strategic location, ease of access to global markets, and favorable regulations, the free zones across the UAE attract international businesses. Here’s a detailed guide to customs clearance procedures in the free trade zones throughout the UAE.
FREE ZONES AND INTERNATIONAL TRADING BUSINESS ACROSS THE UAE
The UAE’s free zones are highly appealing to international businesses. These zones often come with Customs Department offices, airport access, warehousing facilities, easy trade license issuance, and robust business infrastructure support. While Dubai is a significant player, other Emirates also host specialized free zones catering to various industries. From cutting-edge technology hubs to centers focused on healthcare, media, and renewable energy, the diversity of the free zones reflects the UAE’s ambitious economic vision. They present a strategic advantage for businesses looking to enter and flourish in the Middle Eastern markets, providing an ecosystem that fosters growth, innovation, and global connectivity.
IMPORT INTO FREE ZONE
Goods imported into the various free zones are typically exempt from local import duties and taxes, provided that they are not entering the country’s domestic market. This allows businesses within the free zone to operate more cost-effectively, especially if they are involved in activities such as manufacturing, assembling, trading, re-exporting, or providing services to other businesses within the free zone or to international markets. These goods can be stored indefinitely, subject to the trade license type and validity.
For the importation of goods into the free zones, trading companies must present the following documents:
Import Goods Declaration Form: A detailed declaration of the goods being imported. The Import Goods Declaration Form is typically provided by the Customs Department within the Free Zone or the relevant customs authority in the UAE. It can be obtained either directly from the customs office or, in many cases, downloaded from the official website of the UAE Customs Department or the specific Free Zone’s website.
Shipping Documents: Second copy of the bill of lading (for sea), original airway bill (for air), and road manifest (for land).
Delivery Order: Order from the airline or shipping agent for the licensed company in the free zone.
Import Permit: Required by the competent agencies for restricted goods.
Packing List: Detailed list based on packaging method, weight, etc.
Certificate of Origin: Approved by the chamber of commerce in the country of origin.
Sale Invoice: Detailed invoice including total quantity, value, goods description, and currency.
IMPORT FROM FREE ZONE INTO UAE/GCC
The procedure for moving goods from the free zones to GCC or local markets requires submission of relevant documents to the Customs department. These include the documents needed for importing into the free zones, along with specific forms for local or GCC distribution. The designated local or GCC importer, or their authorized customs clearance agent, can present these required documents to the Customs department in order to secure the Free Zone Transit Out (Ex-FZ Import Bill). This essential authorization empowers Free Zone companies to seamlessly transport their goods from the free zones to various destinations within the GCC or the local UAE markets.”
EXPORT OF GOODS FROM FREE ZONE
In the strategically positioned free zones of the UAE, businesses have the unique opportunity to acquire goods from local markets for the purpose of export. This streamlined process, known as FZ Transit In, permits Free Zone companies to engage with local suppliers and extend their products to international markets.
However, executing this process requires adherence to a comprehensive set of prerequisites, tailored to ensure transparency and compliance with customs regulations.
Robust Inventory Control: The company must implement an entirely computerized inventory control system that can be methodically audited. This ensures complete accountability in tracking goods.
Meticulous Record-Keeping: Proper filing of all relevant documents is essential. This includes all bills, import-export transactions, and accurate account verifications, ensuring that every step of the transaction is correctly documented.
Coordination with Customs Authorities: For the alignment of inventory with customs records, the company must be prepared to provide detailed inventories to customs officials when requested. This compliance ensures that the entire process is conducted under the watchful eye of regulatory authorities.
By meeting these requirements, trading companies operating within the free zones can tap into the local market’s potential and efficiently export goods through a system designed for both agility and compliance. This underscores the UAE’s commitment to fostering a conducive environment for international trade, one that emphasizes innovation without compromising on regulation
EXPORT OF GOODS FROM UAE TO THE GLOBAL MARKETS
The export procedures in the UAE, including Dubai, are designed to be streamlined and efficient, promoting a favorable environment for international trade. Before initiating the export process, exporters must adhere to certain administrative tasks and provide the Customs Office with specific documentation. This includes paying registration fees and collecting the essential clearance certificates.
The required documents for exporting goods to international markets from the UAE are:
Declaration of Customs Clearance: A customs declaration is a legally required document that outlines vital information about the goods to be exported or imported. It includes specific details such as the nature of the goods, quantity, value, destination, and origin. In the context of customs clearance within the UAE’s Free Zones, understanding the various types of declarations is essential for compliance with regulations and smooth operations. The different declarations include:
Import Declaration (FZ Inbound): This is for goods entering a Free Zone from abroad or from the local UAE market.
Export Declaration (FZ Outbound): This applies to goods leaving a Free Zone for international markets or the local UAE market.
Transfer Declaration (FZ Transit): This covers goods being transferred from one Free Zone to another within the UAE. This might involve specific paperwork and compliance with the regulations of both the originating and receiving Free Zones.
Re-export Declaration: This declaration is required for goods that are being re-exported from the Free Zone to other international markets, after being temporarily stored or processed within the Free Zone.
Temporary Admission Declaration: This may be applicable for goods temporarily entering the Free Zone for purposes like exhibitions, repairs, or processing, and then being re-exported.
Destruction Declaration: If goods within the Free Zone are to be destroyed, a specific declaration needs to be filed, following the relevant guidelines.
Export Permit for Restricted Goods: If the goods fall under restricted categories, a special permit must be obtained from the relevant authorities.
Approved Export Declaration Certificate: An official document that outlines the specifics of the exportation, including the parties involved and the goods being transported. This document serves a similar role in both free zones and non-free zones in the UAE, detailing the specifics of exportation. In free zones, the customs procedures are often simplified, and exports may be exempt from local duties and VAT, subject to specific regulations unique to the free zone. In contrast, exporting from the UAE’s mainland requires adherence to standard customs procedures, including regular VAT and export duties, and compliance with all federal and local regulations governing international trade.
Sale Invoice: A comprehensive invoice that details each item, the total quantity, the description, and other essential information pertaining to the sale.
Packing List: This document outlines the method of packaging, weight, quantity, and other information relevant to the shipment.
Certificate of Origin: A document that verifies the origin of the goods, usually approved by a recognized Chamber of Commerce in the country of origin.
Shipping Documents: Depending on the mode of transport, this may include the original airway bill for air shipments, the second copy of the bill of lading for sea shipments, or road manifest for land transport.
Transfer within Free Zones: Transferring goods between different Free Zones within the UAE typically necessitates a FZ Transit declaration, maintaining the goods within the Free Zone regulatory framework. The requirements for this transfer may vary depending on the specific regulations of the Free Zones and the nature of the goods being moved. It is advisable for businesses to coordinate with their customs clearance agent or Free Zone authorities to ensure adherence to all relevant regulations and procedures.
By diligently providing these documents and following the outlined procedures, exporters can assure a seamless and timely export process. The UAE’s commitment to facilitating global trade continues to attract businesses worldwide, reinforcing its reputation as a leading hub for international commerce.
GENERAL GUIDELINES FOR FREE ZONE TRADING COMPANIES
Free Zone trading companies must adhere to specific guidelines, including maintaining a valid importer code from customs, ensuring compliance with relevant standards, rules, or laws meant for the licensed company, and adhering to timeframes and inspection requirements. Once customs is declared, goods must arrive in the free zone within 72 hours and should not be opened or altered until they are checked and cleared by customs officials. Regular inspections are part and parcel of the customs clearance process.
Furthermore, the process requires stringent accountability; any non-compliance with regulations may lead to delays or even sanctions. All goods must align with the criteria set by the authorities, reflecting the UAE’s commitment to maintaining quality standards and international trade agreements. By following these guidelines, Free Zone trading companies can operate efficiently and effectively, benefiting from the strategic advantages offered by the UAE’s trade environment.
Read more about Customs Clearance Delays: Causes and Solutions.
COMPREHENSIVE LIST OF FREE ZONES IN THE UAE
The United Arab Emirates (UAE) is home to numerous free zones that cater to various industries and sectors. These free zones are spread across the different Emirates, offering specialized facilities, incentives, and benefits tailored to specific business needs. Here’s a list of major free zones across the UAE:
DUBAI
Dubai Airport Free Zone (DAFZA): Focused on aviation, logistics, and trading industries.
Dubai Multi Commodities Centre (DMCC): A hub for global commodities trading.
Jebel Ali Free Zone (JAFZA): One of the world’s largest free zones, specializing in trading, manufacturing, and logistics.
Dubai International Financial Centre (DIFC): A global financial center.
Dubai Media City (DMC): Dedicated to the media and entertainment industries.
Dubai Internet City (DIC): A technology and IT hub.
Dubai Design District (d3): Catering to the design and fashion industries.
Dubai Silicon Oasis (DSO): Focused on the technology sector.
Dubai Healthcare City (DHCC): A hub for healthcare and medical education.
Dubai Knowledge Park (DKP): Focused on human resource management and learning excellence.
Dubai South Free Zone: An economic zone supporting various industries including aviation, logistics, and real estate.
Dubai World Trade Centre Free Zone (DWTC): Centered around trading and exhibitions.
Dubai Gold and Diamond Park: Specialized for the gold and jewelry industries.
Dubai Auto Zone (DAZ): Catering specifically to the automotive industry, this free zone focuses on the trade and re-export of auto parts, and accessories, as well as offering storage and handling solutions for various automotive products.
Dubai Studio City: For broadcasting and production.
Dubai Production City (DPC): Focused on the global printing, publishing, and packaging industries.
International Humanitarian City (IHC): A hub for humanitarian aid.
Dubai Science Park (DSP): Dedicated to the science sector.
Dubai Maritime City: Specialized for maritime services.
Dubai Outsource City (DOC): For the outsourcing industry.
Dubai Textile City (DTC): Focused on the textile trade.
Dubai Logistics City (DLC): A hub for logistics.
Dubai Flower Centre (DFC): Dedicated to flower trading.
Dubai Industrial Park (DIP): A designated district within Dubai Wholesale City, catering to the industrial sector.
Dubai International Academic City (DIAC): DIAC is a dedicated zone for higher education institutions, providing a platform for universities, colleges, and research institutions to offer educational services and collaborate on academic initiatives.
Dubai National Industries Complex: This free zone is designed to support industrial and manufacturing companies. It offers a variety of facilities, including warehouses and industrial lands, to help businesses operate efficiently in the manufacturing sector.
Energy and Environment Park (ENPARK): ENPARK is aimed at fostering growth in the energy and environment sectors, encouraging innovation, and facilitating collaboration between companies engaged in energy, green technologies, and sustainability.
Jumeirah Lakes Tower Free Zone (JLT Free Zone): Part of the Jumeirah Lakes Towers development, this free zone offers opportunities for businesses across various sectors, including trading, consulting, and services.
ABU DHABI
Abu Dhabi Global Market (ADGM): A broad-based international financial center for local, regional, and international institutions.
Abu Dhabi Ports Company (ADPC) Free Zone: Focused on logistics, trade, and marine services.
Khalifa Industrial Zone Abu Dhabi (KIZAD): Known for its integration with Khalifa Port; offers a wide range of business solutions in the industrial and manufacturing sectors.
Masdar City Free Zone: Focused on clean technology and renewable energy.
Abu Dhabi Airport Free Zone (ADAFZ): Located near Abu Dhabi International Airport, it’s a hub for aviation and aerospace industries, as well as logistics and warehousing.
twofour54: A media and entertainment free zone aiming to foster talent and drive growth in the media sector.
Higher Corporation for Specialized Economic Zones (ZonesCorp): Established in Abu Dhabi, ZonesCorp focuses on the development and management of specialized economic zones, catering primarily to the industrial and manufacturing sectors. It operates several industrial cities in Abu Dhabi, providing facilities, services, and investment incentives to promote growth in these areas.
SHARJAH
Sharjah Airport International Free Zone (SAIF Zone): Situated near Sharjah International Airport, this zone is ideal for trading, manufacturing, and service companies.
Hamriyah Free Zone (HFZ): Known for its flexibility and ease of doing business, HFZ caters to a wide range of industries including oil, gas, petrochemicals, and maritime.
Sharjah Media City (Shams): A hub for media and creativity, Shams offers opportunities for entrepreneurs in the media, marketing, and creative sectors.
Sharjah Publishing City Free Zone: The world’s first publishing free zone, focusing on the publishing, printing, and related industries.
Sharjah Research Technology and Innovation Park (SRTI Park): A zone focusing on innovation, research, and technology, aiming to create a vibrant ecosystem for various scientific sectors.
U.S.A. Regional Trade Center (USARTC) Free Zone: Aimed at providing opportunities for U.S. businesses looking to enter the Middle Eastern market, offering various facilities and services.
RAS AL KHAIMAH
RAK Free Trade Zone (RAK FTZ): A versatile and wide-ranging free zone that offers benefits for various types of businesses, from startups to SMEs and industrial entities.
RAK Maritime City Free Zone: Catering to the maritime industry, this free zone provides facilities for shipping, logistics, and related maritime services.
RAK Economic Zone (RAKEZ): Established by consolidating RAK FTZ and RAKIA, RAKEZ offers customized solutions for free zone and non-free zone entities, attracting various sectors like manufacturing, consulting, trading, and more.
Al Hamra Industrial Zone: Part of RAKEZ, this zone specifically focuses on industrial and manufacturing companies, providing them with the necessary facilities and incentives.
AJMAN
Ajman Free Zone: Provides opportunities for businesses across various sectors, including trading, manufacturing, and services, providing benefits such as competitive lease rates, low tariffs, and efficient licensing procedures, making it an attractive location for both local and international businesses.
UMM AL QUWAIN
Umm Al Quwain Free Trade Zone (UAQFTZ): Strategically located near Dubai and Sharjah, UAQ FTZ is an attractive option for various business sectors, including trading, consulting, and manufacturing.
FUJAIRAH
Fujairah Free Zone (FFZ) – Strategically located near Fujairah Port, this free zone caters to various business sectors, including trading, logistics, and manufacturing. FFZ offers benefits such as streamlined setup processes, flexible office solutions, and tax exemptions.
Fujairah Creative City Free Zone – Focused on media, communications, and creative industries, this free zone provides a platform for entrepreneurs, startups, and established companies to thrive in the creative sector.
BENEFITS OF OPERATING IN A UAE FREE ZONE
Each of these free zones is designed to cater to different industries such as technology, media, healthcare, finance, trade, and logistics. Understanding the unique attributes and offerings of each free zone is crucial for businesses aiming to navigate clearance procedures in the UAE.
100% Foreign Ownership: Unlike mainland UAE, free zones allow full foreign ownership of businesses, offering complete control to international investors.
Tax Exemptions: Many free zones offer substantial tax advantages, including exemptions from corporate and import-export taxes.
Simplified Registration and Licensing: The ease of setting up a company in free zones, with streamlined registration and licensing, attracts businesses seeking quick and hassle-free commencement.
Strategic Locations: Located near major transportation hubs such as ports and airports, free zones provide businesses with efficient access to global markets.
No Import or Export Duties: The absence of customs duties on imports and exports within free zones significantly reduces operational costs.
Access to Skilled Labor Pool: With a diversified and skilled workforce, free zones support businesses in various sectors, helping them find the right talent.
