Dubai Customs signs MoU with Dubai Free Zones Council for Virtual Stock Guarantee
Dubai Customs has signed a memorandum of understanding with the Dubai Free Zones Council to help with the implementation of the ‘Virtual Stock Guarantee’ initiative.
The new solution 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 as a world economic capital.
The initiative is the first of its kind in the world, Dubai Customs said in a release.
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, AED455 billion will be released as company and warehouse securities: AED327 million in bank guarantees and AED128 million in cash guarantees.
“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, Vice President, Prime Minister and Ruler of Dubai,” said HH Sheikh Ahmed Bin Saeed Al Maktoum.
“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,” he added.
“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, DP World group chairman & CEO and chairman of Ports, Customs and Free Zone Corporation said the new solution will help create more investment opportunities and raise Dubai’s competitive edge worldwide.
“Dubai Customs' ‘Virtual Stock Guarantee’ initiative supports Dubai Free Zone Companies that has a 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,” he said.
“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.
Dr Mohammed 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.