Home GULF NEWS LATEST It's advantage UAE free zones as Israeli businesses come exploring

It’s advantage UAE free zones as Israeli businesses come exploring

Dubai: Free zones, particularly ADGM and Dubai’s DMCC, will have the edge as Israeli companies start the process of establishing a presence in the UAE. Played right, the UAE could well emerge as a leading destination for these firms wanting an international presence.

“A lot of successful Israeli companies have been structured in Cyprus, Malta and Gibraltar – and those jurisdictions don’t offer the benefits Dubai has,” said Neil Petch, founder of Virtuzone, a consultancy that helps clients set up a presence in the UAE.

“By registering here, they are availing of the use of English common law through DIFC (Dubai International Financial Centre).” The UAE is a “first world nation in terms of KYC (Know Your Customer), due diligence and [in having] an extremely tax efficient structure.

“Every single dollar that comes in can be reinvested in growing that company, whereas if they were structuring it in Israel, that’s not the case.”

Israeli businesses wanting to enter also have other advantages – leading free zones in the UAE had revised their licensing fees and other rates after the pandemic struck. These are still more or less in place.

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Picking the right spot

This week, another Dubai free zone enterprise initiated a move to tap inward Israeli business interest. KIKLABB, a Dubai Government owned licensing and workspace service provider, struck a deal with NY Koen Group, to expand its presence into Israel. They will offer services to Israeli investors with strategic advisory to launch in the UAE through KIKLABB, which offers offshore and onshore trading licenses.

The Dubai entity even offers workspace on board the QE2. NY Koen Group was in the new recently for its bid to acquire a stake in an Israeli airline.

There are nearly 70 free zones in the UAE, and homing in on the right one will be crucial. “There has been a lot of interest in Abu Dhabi Global Markets, Ras Al Khaimah, and DMCC free zone,” said Scott Cairns, founder of Creation Business Consultants.

Most enquiries are from Israeli companies in cybersecurity, surveillance, artificial intelligence (AI), and medical tech. “Remarkably, a few are interested in setting up on the mainland too,” Cairns said. On whether UAE had started providing resident visas and bank accounts to Israeli investors, Cairns said: “We have been told, yes.”

The Dubai free zones DMCC and DAFZA were quick to initiate an outreach with Israeli industry and trading groups. The Dubai Diamond Exchange, which comes under DMCC, has a deal with its counterpart in Tel Aviv, and senior officials recently confirmed that other precious metals too could come under the ambit of co-operation.

This partnership can provide Israeli companies with not only a UAE trade license, but the tools they need to promote their products, services and increase foreign direct investment and expertise within the region. With estimates suggesting trade with the UAE could reach $4 billion a year, the opportunities are infinite.

Tasawar Ulhaq, CEO of KIKLABB

Investments already kick in

This week, there was confirmation of a $3.8 million investment in an Abu Dhabi-based startup from an Israeli venture capital firm – said to be the first such transaction after the accord between the countries was signed. Fenix, which will soon launch operations in Abu Dhabi with its fleet of electric vehicles for ride-sharing services, picked up the funds from Maniv Mobility. (Fenix is launched by Jaideep Dhanoa and I.Q. Sayed, who were colleagues at Careem.)

Michael Granoff, Managing Partner at Maniv Mobility, said in a statement: “The challenges and opportunities of mobility cross all borders. When it comes to finding safe, affordable, and clean ways of moving people around cities, the same solution sets apply to Tel Aviv, London – or Abu Dhabi.

“Maniv Mobility sees huge potential in the GCC region as a new market for micro-mobility.”

The Fenix e-scooters are all set to get into motion. The tech startup picked up a handsome investment from Israeli venture capital firm Maniv Mobility.
Image Credit: Gulf News Archive

Makes for a smooth entry

Petch said his firm is working closely with various authorities to provide almost a borderless jurisdiction for Israeli entrants. This should give these companies “massive” advantages in terms of forex, usage of blockchain technology, and building debt-free operations.

“We think the UAE has the ability to provide sovereign services (such as) health, insurance and pension services as an incredibly competitive, transparent and secure package,” Petch added.

It’s advantage UAE – and its free zones – as the pace of business and investment exchanges start to pick up.

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