Federal Law No. 1 of 1979
(II)
Free Trade Zone
3.3.1.
Specific Schemes
I.
Federal Law No. 1 of 1979
(166) This scheme permits the import of duty-free raw materials, packing material and capital goods at zero-duty rates.
(a)
Legal Basis
(167) The scheme is based on the Federal Law No. 1 of 1979, Organising Industrial Affairs.
(b)
Eligibility
(168) In order to avail the benefits of the abovementioned Federal Law, it is necessary to obtain an Industrial License released by the Ministry of Finance and Industry.
(169) According to Article 8 of the Federal Law, licences for the establishment of an industrial project may be granted only to UAE citizens, or to companies with local capital shares amount to 51 % minimum, and provided the manager in charge thereof is a local, or the board of directors is constituted in its majority by local citizens.
(170) Furthermore, the same Federal Law provides a set of other eligibility requirements that parties should fulfil: fixed capital should not be lower than 250 000 Dirhams, the number of employees not lower than 10 persons, the use of motive power exceeding 5 horse powers (Article 2). Another requirement is that 25 % of the employees should be locals, but the Minister may decide to exempt or reduce this percentage (Article 33). According to Article 13, application for industrial projects has to be considered in light of the following: industrial project belonging to the industrial development program of the country and agreement made with Arab countries, local consumption requirements. To those projects that comply with the requirements set out in the Article 13 and that are competitive and export-oriented, Article 21 provides a special priority in the granting of privileges.
(171) On the basis of the application provided and the relevant documentation submitted, a relevant committee of the Ministry of Finance and Industry recommends to the Minister the approval or rejection of the application. In line with Article 12 of the Federal Law No. 1, the Minister may decide to grant or not the license.
(c)
Practical implementation
(172) In order to fall within the scope of application of this scheme, the applicant has to comply with the following procedure: application for Industrial Licence to be submitted to the Ministry of Finance and Industry; grant of Industrial Licence by the Ministry; approvals for duty-free imports through on-line application.
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