Dubai Airport Free Zone is situated within the vicinity of an airport, so the activities permitted at the Zone are limited to high value, low volume products, which require a rapid access to markets. Therefore, DAFZA is an ideal location for high tech / IT products, luxury items, jewellery, light industry & activities related to the aviation industry.

Free zones in Dubai are getting some serious competition from regional free zones are developing themselves to attract investors from Dubai as well as other Arab countries.

Until recently, Dubai was seen as a safe investment but now analysts are predicting nightmarish inflation rates like 6.5% and higher. The prices have been going up steadily and the high inflation is having a big negative impact on profit margins and several major companies are looking to other countries or regional free zones to avoid this potential crash.

There have been many free zones in Dubai since the 1980s it is only recently this mad rush for them has developed in conjunction with countries developed free trade agreements (FTA) with their neighbors and others wanting to become part of the world trade organization (WTO).

Dubai has pushed hard and fast to become the main business hub in the Middle East, other nations like Egypt, Jordan, and Lebanon other countries have also been developing their free zones and infrastructure without all the noise generated by Dubai. Moreover, those countries are operating with the advantage of hindsight provided by the Dubai free zone fiasco.

There are almost 20 free zones (working or under development) between Egypt, Jordan, and Lebanon. The UAE is far ahead of them with 15 working free zones and another 13 under development but the other countries are quickly catching up and focusing on development of specialized free zones.

Currently, the competition for the global media industry and regional investors is between 3 regional free zones. There is the Dubai Media City (DMC). There are advantages to Dubai but then Media Production City (MPC) in Egypt has a large and cheaper human resources pool. Jordan's Media City has already attracted organizations with offices in Dubai.

Free zones in Dubai have become a risk not only because of the increase in costs but also because of other factors like the establishment of the new export-oriented free zone by Egypt located east of Cairo after the Cairo Zone reached saturation. More recently, auto-parts manufacturers like Rover, BMW, and Land Rover also moved to Egyptian free zones.

Analysts believe that if ever increasing trends in the costs associated with free zones in Dubai is not controlled soon then there might be a massive outflow of companies to cheaper and newer regional free zones that offering the same level of service at lower production and operational cost.

The Dubai Airport free zone recorded a 62% increase in the number of companies operating during 2005 as compared to 2004. There were over 318 multinational and regional companies operating in this free zone in Dubai in 2005 bringing the total number of companies in the free zone to 825.