VZCZCXRO9047
RR RUEHDE
DE RUEHDE #1068/01 0571352
ZNY CCCCC ZZH
R 261352Z FEB 06
FM AMCONSUL DUBAI
TO RUEHC/SECSTATE WASHDC 8688
INFO RUEHAD/AMEMBASSY ABU DHABI 1313
RUEHDE/AMCONSUL DUBAI 1609
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 DUBAI 001068 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL:  2/7/2016 
TAGS: ECON PGOV PREL TC
SUBJECT: AJMAN FREE ZONE 
 
REF: 05 DUBAI 6284;  DUBAI 0003 
 
CLASSIFIED BY: Jason L. Davis, Consul General, Dubai, UAE. 
REASON: 1.4 (b), (d) 
 
 
 
¶1. (SBU) SUMMARY. Sheikh Mohamed Al Nuaimi, Director General of 
the Ajman Free Zone (AFZ), discussed the zone's operations with 
PolEconoff on January 24. AFZ has been in operation since 1986 
and has registered more than 1600 companies. AFZ's registration 
requirements and due diligence are not stringent, making it 
potentially attractive to front companies. End Summary. 
 
¶2. (U) Sheikh Mohamed Al Nuaimi, Director General of the Ajman 
Port and Customs and Free Zone, accompanied by Rishi Somaiya, 
the Ajman Free Zone's (AFZ) marketing manager, met on January 24 
with PolEconoff to discuss the zone and its operations. 
 
Background 
---------- 
 
¶3. (U) AFZ was established in 1986. It was the UAE's second free 
zone after the Jebel Ali Free Zone. It is also the UAE's second 
largest free zone in terms of registered companies, with more 
than 1600 registered companies.  Based on information provided 
by AFZ, 60 percent of companies registered there are trading 
companies, 30 percent are involved in industrial production, and 
the remaining 10 percent are services companies. Approximately 
35 American companies are registered in the zone. Al Nuaimi did 
not know the number of Iranian companies registered in the zone; 
he said he believed that most of them shipped foodstuffs and 
consumer goods to Iran. By nationality, Indian owned companies 
are the largest group in AFZ, outnumbering Iranian companies by 
a wide margin. 
 
Requirements to Register 
------------------------ 
 
¶4. (SBU) AFZ's registration requirements are simple and easy to 
meet. A company must only submit a one or two-page business 
plan, show evidence that the company has on deposit AED 50,000 
(USD 13,624), and pay a fee of USD 5000. No other documents are 
required by AFZ. 
 
¶5. (C) From Somaiya's descriptions, it was clear that the 
requirement to show AED 50,000 on deposit was merely a 
formality. He said that submitting a recent bank statement 
showing the money was on deposit for one day was sufficient. 
Essentially, a company could borrow the sum, deposit it on one 
day, withdraw and return it to the lender the next and that 
would still satisfy AFZ. 
 
¶6. (C) Companies meeting the minimum registration requirements 
are able to operate as an "e-office."  Companies with an 
"e-office" in AFZ are limited to one UAE work/residence visa. 
AFZ offers such companies "shared" office spaces, and shared 
office equipment, for their occasional use. 
 
Due Diligence 
------------- 
 
¶7. (C) AFZ does not independently investigate companies seeking 
to register in the zone, relying instead on the Ministry of 
Interior (MoI) in Abu Dhabi to vet all applicants. Names and 
company details are sent to MoI when AFZ applies for visas for 
applicants. Al Nuaimi said that all financial transactions are 
checked by the Central Bank. He implied that reliance on MoI and 
the Central Bank was sufficient due diligence and AFZ couldn't 
be expected to do more than that. 
 
Visas 
----- 
 
¶8. (C) It appears AFZ makes greater efforts to curb visa abuse 
by companies in the zone, an issue probably of greater concern 
to Ajman authorities than corporate financial practices. Al 
Nuaimi said AFZ is aware that some businesses seek to register 
in any of the UAE Free Zones solely to obtain UAE work visas. 
AFZ strictly limits the number of visas a company can get until 
it has established a track record in the zone and has proven a 
necessity for additional visas. As noted above, AFZ will only 
issue one employment visa for a company with the basic e-office 
presence. A company applying for additional visas must satisfy 
the zone's assessment team that the company's operations justify 
additional visas. 
 
Customs 
 
DUBAI 00001068  002 OF 002 
 
 
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¶9. (C) Al Nuaimi claimed that customs officers inspect all 
containers entering AFZ, whether the goods are being 
transshipped to a third country or they are destined for the UAE 
market.  Al Nuaimi claimed -- not credibly in our assessment -- 
that customs officers open every container and match the goods 
to the supporting documents. 
 
Advantages and Constraints 
-------------------------- 
 
¶10. (SBU) Somaiya said AFZ's advantages are its proximity to 
Sharjah and Dubai and 20 percent lower operating expenses. He 
said that the main problem facing AFZ is the lack of space in 
Ajman for expansion. Ajman is the smallest Emirate; bordered in 
three directions by Sharjah and on the fourth by the Gulf, it 
has little available land available for a possible AFZ 
expansion. AFZ has one million square meters of space for office 
buildings, warehousing, and industry and very little of this 
land is vacant. 
 
Comment 
------- 
 
¶11. (C) Ajman Free Zone, like Ras al-Khaimah Free Zone (reftel 
A) and Fujairah Free Zone (reftel B), has inadequate due 
diligence and vetting procedures, a fact that leaves the zone 
vulnerable to exploitation by individuals desiring to establish 
front companies. Al Nuaimi's claim that all financial 
transactions are checked by Central Bank is likely nothing more 
than a reference to the fact that bank transactions in general 
in the UAE are technically subject to CB scrutiny. His claim 
that customs officers open every container and match the goods 
to the supporting documents is likewise suspect. 
DAVIS