Spurred by a healthy growth in the Middle East cosmetics and personal care sector estimated at 12% annually over the past three years, with a sales value of AED 7.7 billion (US$2.1 billion) in 2007, a record ten global cosmetic majors have set up branch offices in Dubai Airport Free Zone in recent months.
Some of the top names in the glamorous world of cosmetics and fragrance are increasingly targeting the prosperous economies of the UAE and the Gulf countries. Prominent among those that have chosen Dubai Airport Free Zone as a base include Chanel Limited FZE, Clarins Groupe (Middle East) Ltd. (Branch), Estee Lauder Middle East FZE, P & G Cosmopolitan Cosmetics (Branch), Perfumes Loewe Middle East (Branch), Guerlain Middle East (Branch), Revlon Middle East (Branch), Parfums Givenchy Middle East (Branch), Parfums Christian Dior S.A. (Branch), and Elizabeth Arden (Middle East) FZE.
“Cosmetics and fragrance companies are being lured by the tax free and 100 per cent ownership incentives being offered by the Dubai Airport Free Zone. A new trend we are seeing is that quite a number of these companies are coming and setting up Middle East regional offices in Dubai’s Airport Free Zone,” said Dr. Mohammed Al Zarouni, Director General, Dubai Airport Free Zone.
“Advantages of setting up a regional office at the Dubai Airport Free Zone include our location adjoining the Dubai Airport and the easy access to the state-of-the-art Dubai Cargo Village. These factors are proving to be particularly attractive to companies that depend on time-sensitive shipments. We also have a one-stop-shop where investors can get all their documentation for licensing, registration and employee sponsorship done, even online,” Dr. Zarouni added.
Estee Lauder’s decision to open initially a branch office, and more recently, a Free Zone company, was a “well thought one,” said Mr. Didier Picard, Vice President and General Manager of Estee Lauder ME FZE. “Besides offering a second to none infrastructure in Dubai, Dubai Airport Free Zone was the ideal place to grow a team of professionals from all over the world to promote our selective cosmetic brands across the Middle East and further.”
Elaborating further, Mr. Picard said over the; last few years, “Dubai and the GCC in general has become visible at headquarters level. This is due to the impressive growth experienced in the region but also more importantly, due to top world class standards achieved in terms of logistics infrastructure, and of course in our industry, retailing environment.”
He added that services and facilities at the Free Zone “have grown rapidly over the past years, resulting in an improvement of the support to companies like ours.”
Mr. Bruno Tissot, General Manager of Elizabeth Arden Middle East FZE said opening an entity abroad, independently of its size or its mother company structure “is always an exercise that starts with a blank sheet. The priority of course is based on the reliability of the project but we all have this first tendency to always take into account existing business ties and links together with resources and or costs related to them.”
He added, “By definition a blank sheet allows thinking and moving out of the box and the identification of opportunities with no existing ties or constraints.”
Mr. Tissot emphasized that the Dubai Airport Free Zone is offering international companies “unlimited business opportunities with a limited amount of constraints at an acceptable cost level.”
On the importance of the Dubai and GCC market to Elizabeth Arden, Mr. Tissot explained “as for the actors present in this industry, the GCC is not only a booming market but also a profitable region. Dubai definitely acts as a trend setter and influences its neighbouring countries both in consumption and distribution network infrastructure.”
Osama Rinno, Managing Director of Clarins Groupe underlined that the advantages Dubai Airport Free Zone offers are immense and being a tax free haven is amongst is strongest USPs.
“Research indicates that residents of the UAE and GCC countries are increasingly appearance conscious with over 30,000 salons in GCC spurring demand for beauty products” remarked Dr. Zarouni.
“In fact, the consumption of cosmetics and perfumes in the region is ranked among the highest per capita worldwide, with an average purchase per head of around AED 1,226 annually,” stressed Dr. Zarouni.
Added attractions for international cosmetics companies apart from total foreign ownership, total repatriation of capital is the total exemption from corporate, personal income, and commercial levies. The Airport Free Zone allows companies in the Free Zone to operate 24-hours and is also provided round-the-clock security.
“At the Dubai International Airport, 135 airlines fly to 210 destinations which is a boon for investors,” added Dr. Zarouni.
With 48,000 Sq. m. of additional office space being added this year and a further 103,000 sqm. planned between 2010 and 2013, the Dubai Airport Free Zone will be able to cater to future demand.
“Established in 1996, the Dubai Airport Free Zone is home to over 1,425 multinational companies from various sectors. With flexible operations processes that meet client demands, the Free Zone makes up a vibrant community of some of the biggest international companies. Leading companies located at the zone include Ferrari, Rolls Royce, Airbus, Pharma Rent, Bauer Equipment USA Inc., Finterra, and Cartridge World.”
Dubai is a strong trade hub presenting re-export opportunities to Gulf states, Iran, India, Pakistan, East Africa and the Commonwealth of Independent States (CIS).
About Dubai Airport Free Zone
Dubai Airport Free Zone established in 1996 offers companies operating at the Free Zone 100% foreign ownership, Free Zone companies will benefit from 100% repatriation of capital.100% Corporate, import/ export, personal income, and commercial levies tax exemption. The Dubai Free Zone facilities offered to companies include “one stop shop” administration services and investors oriented management. Companies can operate 24 hours and enjoy security around the clock, as well as make use of the excellent cargo handling facilities (1.6 million tonnes handled in 2007), 24-hour Customs services, Dedicated Logistics Center (DNATA /FLC), and a range of ready-built and custom-made facilities close to the airport apron.
Trade through Dubai Airport FZ represents approximately seven per cent of total Dubai Trade in 2007. It contributed five per cent to Dubai’s GDP. Businesses at Dubai Airport Free Zone resulted in a 75% increase in DNATA’s cargo handling facilities at Dubai Airport Free Zone since its establishment. The Free Zone has contributed a 100% increase in the handling capacity of DNATA at the Free Zone in the period 2005-2007. (Current capacity 200,000 tonnes per annum).
The Dubai Free zone has received the following awards in the last couple of years:
• ISO 1800-/1999 Health & Safety Certificate.
• Dubai Government Excellence Award-2005
• FDI Award-fastest growing Free Zone in the Middle East-2006
• Middle East Logistic Award-The best Airport Free Zone in MENA-twice 2007 and 2008
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