Dubai Customs inks “Virtual Stock Guarantee” MoU with Dubai Free Zones Council
Following the directives of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai of facilitating business procedures, Dubai Customs signed a memorandum of understanding with the Dubai Free Zones Council to help with the implementation of the “Virtual Stock Guarantee” initiative. The new facility was developed by Dubai Customs to support re-export activity from free zones to external markets within Dubai Customs’ efforts to help Dubai maintain a leading position and turn into a world economic capital. This initiative is the first of its kind in the world.
The signing ceremony was attended by HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Free Zones Council,Sultan bin Sulayem, DP World Group Chairman & CEO and Chairman of Ports, Customs and Free Zone Corporation and was signed by Dr Mohammed Al Zarooni, Secretary General of Dubai Free Zones Council, and Ahmed Mahboob Musabih, Director of Dubai Customs.
More than 18,000 companies based in 24 free zones and 37 customs warehouses can benefit from the Virtual Stock Guarantee facility, in addition to customs warehouse companies willing to use it to re-export their goods solely through Dubai’s air and sea ports, and the UAE land exits.
According to the agreement, AED 455 billion will be released as company and warehouse securities: AED 327m inbank guarantees and AED 128 m in cash guarantees.
HH Sheikh Ahmed Bin Saeed Al Maktoum said: “After developing a comprehensive geo-economic map of Dubai, this agreement follows hard on the heels of the foundation of the Dubai Free Zone Council as a fulfilment of the 2ndarticle of the 50-Year Charter which was launched by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai. It’s the fruit of cooperation between the Free Zones Council and Dubai Customs to leverage the virtual stock operation, which is the first of its kind in the world. This agreement also supports the 3rd article of the 50 Year Charter of creating the first virtual commercial zone in the region which will provide various facilities to investors, and help attract foreign direct investment, support the economy of Dubai, and enhance its position on the global map”.
His Highness pointed out that the Free Zones Council keeps developing and adopting the latest future trends that meet and even go beyond the investors’ expectations.
“This leverages our national economy and creates a very inviting and attractive environment that employs the most advanced technologies to help entrepreneurs and businesses of different sizes get the best of our free zones, His Highness added”.
Sultan bin Sulayem, DP World Group Chairman & CEO and Chairman of Ports, Customs and Free Zone Corporation said: “We follow the wise vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai and develop certain initiatives to facilitate business activities and maintain economic growth. This will help create more investment opportunities and raise Dubai competitive edge worldwide. Dubai Customs’ “Virtual Stock Guarantee” initiative supports Dubai Free Zone Companies that has significant role on Dubai’s economy, while Free zones have contributed AED 532 billion, representing 41% of Dubai’s non-oil foreign trade in 2018”.
“We will always work hard to help Dubai maintain its leading position worldwide and encourage more investments into the emirate. The Virtual Stock Guarantee facility is the first of its kind in the world and it will pave the road towards the development of the first virtual trade zone in the world which will target 100,000 companies in accordance with the third principle of the 50-Year Charter” bin Sulayem added.
DrMohammed Al Zarooni, Secretary General of Dubai Free Zones Council pointed out the Virtual Stock Guarantee provides more cash flexibility to different companies and licensed customs warehouses within the free zones. Now they can retrieve their securities and bank guarantees and use them to enhance their business and develop their operations, in parallel with enhancing the trade cycle at various. This will have its positive effect on the economy” he said.
Dr Al Zarooni highlighted the importance of Dubai’s innovation culture which is applied in a practical and systematic manner at Dubai free zones. Over the past few decades, it has contributed to the economic, social, and human development of the emirate and the country as a whole and positioned Dubai as a preferred global destination for the ease of doing business, and the go to destination for investment and investors.
On his part, Ahmed Mahboob Musabih, Director of Dubai Customs highlighted Dubai Customs role in developing and innovating smart services and systems following its vision of turning into a world leading organization that supports legitimate trade.
“These steps, facilities and procedures have done their part in helping Dubai reach AED 1.3 trillion in its non-oil foreign trade in 2018 against a backdrop of world economic world volatility and turmoil. Dubai Customs topped the list of happiness meter with 97.5%” Musabih said.
Musabih added: “The return of customs guarantees to free zone companies and warehouses will boost their operations in Dubai. A total of half a billion dirhams, are expected to be reused in their commercial activities, ensuring their growth sustainability and attracting new investments.