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 has signed a Memorandum of Understanding, MoU, 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.
In the presence of H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Dubai Free Zones Council, Sultan bin Sulayem, DP World Group Chairman and CEO and Chairman of Ports, Customs and Free Zone Corporation, the MoU was signed by Dr Mohammed Al Zarooni, Secretary-General of the 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 seaports, and the UAE land exits.
According to the agreement, AED455 billion will be released as company and warehouse securities, which includes AED327 million in bank guarantees and AED128 million in cash guarantees.
Sheikh Ahmed bin Saeed 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 2nd article of the 50-year Charter which was launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum. It is the fruits 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.”
Sultan bin Sulayem said, “We follow the wise vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum 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 have a significant role on Dubai’s economy, while free zones have contributed AED532 billion, representing 41 percent of Dubai’s non-oil foreign trade in 2018.”
Dr. Al Zarooni stated that 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.
Ahmed Musabih highlighted the role of the Dubai Customs in developing and innovating smart services and systems following its vision of turning into a world leading organisation that supports legitimate trade. “These steps, facilities and procedures have done their part in helping Dubai reach AED1.3 trillion in its non-oil foreign trade in 2018 against a backdrop of world economic world volatility and turmoil. Dubai Customs topped the list on the happiness meter with 97.5 percent,” Musabih said.