Investment into free zones reflects changes to the global economy, including servicification. Data from fDi Markets shows that the three top sectors in 2023 for foreign direct investment (FDI) projects in free zones were all services, namely software and IT, business and financial. Collectively, they accounted for 45% of total free zone FDI projects, up from 20% in the pre-pandemic year of 2019.

As such, the 2024 edition of fDi Intelligence’s Global Free Zone 2024 awards unveils the world’s best knowledge zones, where the majority of tenants lease or acquire office space and other commercial space designed for the provision of services. The survey asked these zones questions about the main advantages they offer services companies, their priority sectors and efforts to improve their sustainability, governance and transparency.

GLOBAL WINNERS

Winner: Dubai Multi Commodities Centre, UAE

Dubai Multi Commodities Centre (DMCC) has embedded its reputation as the world’s leading free zone for services companies. While missing out on the top spot in the global rankings, DMCC is undeniably the most successful knowledge zone. More than 24,000 companies in the physical commodities and high-value added services sectors have a presence in DMCC. 

The three priority areas in DMCC’s sprawling ecosystem are precious stones, energy, and gaming, artificial intelligence and Web3 — a new iteration of the internet that embraces decentralisation and blockchain-based technologies. For the latter, DMCC has specialised in high-growth and emerging tech sectors such as crypto, for which it has a dedicated centre with 600 members.

In 2023 alone, the zone added 2692 new companies. This followed a record-breaking year in 2022, when DMCC welcomed 3049 new businesses. Combining these two years, DMCC claims it attracted 15% of Dubai’s FDI projects. The zone has not rested on its laurels and continuously strives to future-proof itself as epitomised by its sustainability initiatives. In 2023, the zone did a full review of its Scope 1, 2 and 3 emissions to help shape its decarbonisation strategy. The DMCC sustainability hub was set up to promote green innovation within its tenants and the global trade community.

Highly commended: America Free Zone, Costa Rica

As the most established services-focused hub in Costa Rica, America Free Zone (AFZ) has created an ecosystem of leading technology firms over 25 years. Its tenants include household names like Hewlett Packard, Bosch, Amazon and IBM. The zone’s location — near Costa Rica’s international airport, universities, hotels and capital city San José — is a major draw for companies seeking to set up internal and outsourcing services operations.

As part of its support for clients in various technology development areas, including artificial intelligence (AI) and cyber security, AFZ has high-speed internet, bespoke office space and regular tech-focused events. Data, internet and power redundancy through back-up generators and multiple service providers ensures continuity of its tenants operations. Recent notable companies to set up a presence at AFZ include drug wholesale company Cencora, software firm ServiceNow and Databricks — a data, analytics and AI specialist.

The zone’s embrace of technology is exemplified by the use of robots for janitor services and landscaping as well as drones for its 24-hour security services. AFZ is also deploying chatbots to streamline the creation of work orders and enhance internal financial transactions.

MIDDLE EAST

Winner: Dubai Multi Commodities Centre, UAE

See above.

Highly commended: Dubai World Trade Centre Authority, UAE

The Dubai World Trade Centre (DWTC) Authority resides over a knowledge zone in the heart of the Emirate’s central business district, exhibition space and real estate. It caters to companies ranging from start-ups to large corporations.

Alongside its promotion of emerging tech sectors, such as Web3, blockchain and artificial intelligence, DWTC has a focus on family offices, helping wealth management services providers to set up in the zone. 

DWTC has embedded innovation into its operations. It created an online portal for its tenants to manage their accounts, which offers real-time insights, a personalised dashboard and advanced security measures. The judging panel was impressed by DWTC’s efforts to promote sustainability and work with government entities to boost transparency. This includes DWTC adjusting its policies to assist with the UAE’s removal from the Financial Action Task Force grey list.

ASIA-PACIFIC

Winner: Waigaoqiao Free Trade Zone, China

As an early adopter of the global SEZ concept, Waigaoqiao Free Trade Zone (FTZ) has long been a feature of China’s commercial capital Shanghai. Since its formation in the 1990s, Waigaoqiao has evolved from China’s first FTZ into a home for around 10,000 foreign-invested companies. In 2023, it had trade ties with 227 countries and regions, with total trade volumes amounting to $160bn. The zone claims this makes it China’s largest SEZ by trade volume.

Alongside its focus on international trade, Waigaoqiao FTZ targets the development of logistics and biomedicine. Several notable wins have been recorded in the latter, including oncology company Beigene, medical devices specialist Boston Scientific and Insilico Medicine, an artificial intelligence-driven drug discovery company. The zone has implemented changes to improve its biomedical ecosystem, including streamlining product registration and providing testing and evaluation services to its tenants. In 2023 alone, Waigaoqiao attracted $2.1bn of contracted foreign investment.

Highly commended: The Chongzuo Area of Guangxi Pilot Free Trade Zone, China

Covering an area of 15 square-kilometres, Chongzhou is one of the three areas in the expansive Guangxi Pilot Free Trade Zone (FTZ). As the closest SEZ area to the Sino-Vietnamese border, it focuses on supporting multinational companies doing business in China and fast-growing markets in the Association of Southeast Asian Nations (Asean).

As part of its wide array of services, the Chongzhou area FTZ promotes cross-border trade and the use of the renminbi in Asean. The zone has solutions for cross-border transaction settlement and risk management for enterprises trading with Asean. Notable recent investment projects over the past 12 months caught the judges’ attention, which include Wanjia’s cashew processing plant and Liangwei’s precision power cord plant. High marks were also given for Chongzhou FTZ’s vision to establish a land-border port international logistics hub that aims to develop cross-border co-operation.

AMERICAS

Winner: America Free Zone, Costa Rica

See above.

Highly commended: Cayman Enterprise City, Cayman Islands

Cayman Enterprise City (CEC) has gained esteem for its efforts to create a vibrant tech-focused ecosystem with geographical proximity and the same time zone as major North American markets. Through its business support services, including for immigration and work permits, it streamlines the process for companies and their staff to relocate to the Cayman Islands.

The judging panel was impressed by CEC’s recent investment wins, which included companies in the legal tech, decentralised finance and precious metals industries. Judges also recognised CEC’s strategy and initiatives to reach net-zero emissions by 2050. Decarbonisation projects include the creation of sustainable infrastructure such as solar-powered lighting, green and planted walls and boosting energy efficiency in its buildings.

Education and training plays a central part in CEC’s efforts to boost innovation in the local economy. More than 4200 opportunities were offered in 2023 for citizens to take part in education, training and career development events. CEC has also supported 41 new business ventures started in the Cayman Islands in a sign of its efforts to support the local entrepreneurial ecosystem.

Download the PDF to explore this year’s winners 

Visit the online hub for the Global Free Zones of the Year 2024 awards

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This article first appeared in the October/November 2024 print edition of fDi Intelligence