Currently, the UAE has ten free zones.  They are Jebel Ali, Sharjah Airport International, Hamriyah, Fujairah, Saadyat, Ajman, Ras Al Khaimah, Jebel Ali Seaport, Dubai Airport International and the Dubai Technology, Electronic Commerce and Media Free Trade Zone.  Each offers an open, liberal, pro-business environment where 100 percent foreign ownership is allowed.  The zones have attracted a significant amount of foreign investment.  The three most significant areas in the UAE for foreign investment are Sharjah, Dubai, and Abu Dhabi.  In many ways, it seems that the remaining four Emirates seem to have been forgotten.  

In terms of information technology, the Dubai Technology, Electronic Commerce and Media Free Trade Zone is by far the most significant, followed by the Jebel Ali Free Trade Zone.  Dubai Internet City was created by the government as a high-tech technopolis similar to Silicon Valley.  Although it is not fully operational yet it has, and will continue to, attract both venture capitalists and foreign direct investment in industries related to information technology. 

Free Trade Zones:
Responsibility for regulating business in the UAE is shared between the federal government and the individual Emirates.  In many ways, the government has not encouraged the attraction of foreign IT companies (or any companies for that matter) in the sense that foreign companies must have at least 51 percent ownership by a UAE national.  However, the government has established ten free trade zones where foreign ownership is allowed and encouraged.  When operating a business in any of the free trade zones it is exempt from both corporate and income taxes, as well as ownership requirements.  If a company is not located in one of the free trade zones it must have a national sponsor who owns 51 percent of the company.  In terms of information technology the two most significant free trade zones are Jebel Ali Free Trade Zone and Dubai Internet City. 

Jebel Ali Free Trade Zone:
In 1985, the Jebel Ali Free Zone was established partly as a means of attracting modern technology.  The zone has almost 1,600 companies from over 70 countries.  Over $2.5 billion dollars worth of investment is in the Jebel Ali Free Zone.  This particular free trade zone operates much like the others in the sense that companies are not responsible for paying corporate or income taxes, nor is a local sponsor necessary.  An exact number of information technology companies in this free trade zone is not known. The success of this free trade zone has spurred the growth of other free trade zones. 

Dubai Internet City is actually a part of Dubai’s third free trade zone--the Dubai Technology, Electronic Commerce, and Media Free Trade Zone.  It was established as a means of attracting both venture capitalists and foreign direct investment in the information technology industry.  This particular free trade zone will further help the government realize its goal of diversification and development of non-oil industries. 

Dubai Internet City was actually modeled after Singapore Science Park.  A variety of offices, shopping, exhibition and recreational facilities will be located here.  As of June 2000, over 100 companies were licensed to operate in the DIC and over 350 more had applied.  If all outstanding applications were accepted it would be at around 80 percent capacity (35).  Estimates suggest that thus far investments total approximately $250 million.  The primary foreign players thus far are Microsoft, Oracle, Compaq, Commerce One, Intel, and MasterCard. 

Perhaps one of the most interesting outcomes to the announcement of Dubai Internet City was the application of two Internet Service Providers.  Initially, ETISALAT was going to provide the telecommunications infrastructure.  The applications of the two (unnamed) ISPs have not yet been approved.  However, if they are accepted service will only be limited to DIC.  Furthermore, rumors have suggested that they will have to coordinate on prices with ETISALAT.   If the applications are accepted this could potentially be the first step to disbanding the ETISALAT monopoly. 

Dubai Internet City was established to “create an infrastructure, environment and attitude that will enable Internet-related enterprises to operate globally out of Dubai with significant competitive advantages” (36).  The technical infrastructure was designed with high standards in mind.  DIC will have access to high bandwidth, low cost state-of-the-art telecommunications infrastructure with redundant connections to Internet primary backbone providers.  The initial cost to create the technical infrastructure is approximately $700 million.   There are claims that access prices to broadband Internet connections will be competitively priced for both homes and businesses in the area.  The other major draws to the city are a pool of qualified contractible workers to provide temporary support to businesses in the free trade zone.  Additionally, DIC will allow software developers the opportunity to test new products within the various government agencies and public sector firms.