As Chinese short-form dramas find global traction, the Middle East is fast emerging as the next major destination—following the path carved through the US, Europe, and Southeast Asia.
Production crews are increasingly flying into Dubai and other regional hubs, casting Arab and Western-looking actors and shooting tightly scripted micro dramas tailored for the region. With the distribution power of platforms like TikTok, these studios are able to make an impact quickly. But success in the Arab world demands more than just cross-border reach.
Cultural norms, religious customs, and language nuances vary widely across the region. To truly connect with audiences—and stay in tune with content trends—deep localization is essential.
That’s why Chinese short-form drama studios can’t rely on a fly-in, fly-out model for long. Setting up a local entity is quickly becoming a strategic necessity. Teams that move early to establish a legal and operational presence will gain a head start in forging partnerships, producing tailored content, and navigating local compliance. Once one player cracks the model and starts reaping returns, others are likely to follow, kicking off a new wave of competition for market share.
With localization demand rising, the key question becomes: how can studios balance speed, cost, and compliance?
Based on long-term observations by 36Kr, the UAE’s International Free Zone Authority (IFZA) offers a favorable setup. It gives studios direct access to the Middle East while keeping costs in check—and crucially, allows for compliant operations even without a full team on the ground. That combination of flexibility and stability is especially valuable for content startups entering a new region.
But with more than 40 free zones across the UAE, how do you pick the right one?
The UAE may not be a massive market by itself, but it holds the key to a 600 million–strong Arabic-speaking population. Being closer to that audience means better cultural insight, faster content adaptation, and tighter alignment with local platforms and user behavior.
Having a legal presence in the UAE also makes it easier to collaborate with local advertisers and brands. A registered entity on the ground builds trust. It enables smoother partnerships and provides a legal framework for resolving disputes locally—sidestepping the headaches of cross-border litigation.
Cities like Dubai and Abu Dhabi lead the region in media infrastructure. Government incentives are further accelerating growth in film and digital entertainment. For example, the Abu Dhabi Film Commission raised production rebates to as high as 50% this year—benefits that apply to short-form content, particularly if it incorporates Emirati culture or shoots on location in the UAE.
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Why free zones matter
In the UAE, businesses fall into two categories: mainland and free zone entities. Free zones offer several advantages over mainland setups—lower costs, faster registration, and more flexibility in how capital moves.
Lower costs, smoother process
Setting up in a free zone is significantly cheaper than going the mainland route. Registration fees are lower, and the process is streamlined, saving valuable time during market entry.
There is a tradeoff: free zone companies can’t operate directly in the UAE domestic market. But that barrier is often navigated through partnerships with local agents or distributors—giving companies full regional reach without needing a mainland license.
Full foreign ownership
Free zones were the first in the UAE to allow 100% foreign ownership. For short-form studios, that’s a critical edge. It means no dilution of control, no need for a local sponsor, and full authority over content, copyright, and profit.
That freedom also enables faster, more culturally responsive content creation. For instance, studios can adapt plotlines to emphasize family values or other regional themes—without seeking outside approval.
Lower taxes, stronger margins
Free zone entities are subject to just 9% corporate income tax, and may even qualify for a 0% rate under certain conditions. Profits can be reinvested into production or user acquisition to scale quickly in the region.
There’s no personal income tax either. That means salaries and dividends paid through the company are tax-free—allowing studios to attract better talent with the same budget.
Free capital flow and full repatriation
Capital and profits can move freely in and out of the UAE, with no currency restrictions. Revenue from subscriptions or tips across Saudi Arabia, the UAE, and Egypt can flow into a Dubai-based entity, then be repatriated to a parent company in China—without foreign exchange losses or approval hurdles.
In short, free zone setups offer an optimal mix: tax advantages, foreign ownership, open capital flows, and direct access to the Middle East—alongside the ability to localize marketing, content, and operations.
| Free Zone | Registration Fee | Virtual Office | Remote Setup | Professional Film Facilities | Registration Time |
|---|---|---|---|---|---|
| Ajman Free Zone | Low | Yes | Yes | No | Fast |
| Dubai Media City | Medium | Yes | Partial | Yes | Medium |
| International Free Zone Authority (IFZA) | Low | Yes | Yes | No | Fast |
| Sharjah Media City (Shams) | Low | Yes | Yes | No | Fast |
| Twofour54 | Medium | Yes | Yes | Yes | Medium |
How to choose the right free zone
To determine which free zone suits your studio best, weigh these three factors:
- Cost-efficiency: Compare basic expenses like registration and office rent.
- Talent availability: Does the zone provide access to media, production, and marketing professionals?
- Infrastructure support: Are there soundstages, equipment rental, and post-production facilities nearby?
For lean setups that don’t need extensive infrastructure, IFZA, Ajman Free Zone, and Sharjah Media City (Shams) offer cost-effective entry points. Shams even allows installment plans for registration fees.
For professional production support, Dubai Media City and Twofour54 offer top-tier facilities and established ecosystems.
Need to register remotely? IFZA, Shams, and Twofour54 all support online setup. Dubai Media City allows remote applications but requires an in-person visit to finalize documents.
In a hurry? IFZA, Ajman Free Zone, and Shams are known for fast processing—sometimes within the same day.
And for teams not requiring a physical office, virtual office options are available across IFZA, Ajman, Twofour54, and Shams.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Chang Weiqian for 36Kr.