The Free Zone Special Legislation Exemption is a factor used to determine the applicability of data protection laws in certain jurisdictions, specifically for companies and institutions located in designated free zones that are subject to separate data protection legislation. ## Provision > "Federal PDPL Art.2(2)(g) in UAE Mainland: 2. The provisions of this Decree Law shall not apply to the following: g. companies and institutions located in the free zones of the State and are subject to special legislation on Personal Data Protection." > ## Description The Free Zone Special Legislation Exemption is a unique approach to data protection law applicability that recognizes the special status of designated free zones within a jurisdiction. This factor is incorporated into laws to accommodate the distinct regulatory environment often present in free zones, which may have their own legal frameworks designed to attract foreign investment and facilitate business operations. The rationale behind this exemption is to allow for potentially more stringent or tailored data protection regulations within these zones, acknowledging their specific economic and regulatory needs. Lawmakers may choose to limit the application of general data protection laws in these areas to avoid regulatory overlap or conflict with the specialized legislation governing free zones. In the case of the UAE, the provision explicitly excludes "companies and institutions located in the free zones of the State" from the application of the general data protection law. However, this exemption is conditional on these entities being "subject to special legislation on Personal Data Protection." This approach ensures that while free zone entities are exempt from the mainland law, they are still required to comply with data protection standards, albeit under a different legal framework. ## Implications The Free Zone Special Legislation Exemption has several important implications for businesses: 1. Dual regulatory environment: Companies operating both within and outside free zones may need to comply with different data protection regimes, potentially requiring separate compliance strategies. 2. Jurisdictional considerations: When determining whether a data protection law applies, businesses must consider not only their physical location but also their status as a free zone entity. 3. Compliance complexity: Multinational corporations with presence in both mainland and free zone areas of the UAE would need to navigate two distinct sets of data protection rules, potentially increasing compliance costs and complexity. 4. Data transfer implications: The exemption may affect how data can be transferred between mainland entities and those in free zones, as they may be subject to different data protection standards and transfer requirements. An illustrative case where this factor would be relevant is a global technology company setting up operations in the UAE. If the company establishes its regional headquarters in a UAE free zone, it would be exempt from the Federal Personal Data Protection Law and instead be subject to the free zone's specific data protection legislation. However, if the same company also operates branch offices in the UAE mainland, those offices would need to comply with the Federal law, creating a dual compliance scenario for the organization.