Dubai’s new Design District – popularly known as d3 – promises to deliver an ecosystem for fashion and design in one of the region’s prime retail hubs. d3 was established by the Ruler of Dubai as a collective space to nurture new ideas in fashion and design.

Legislation with the specific aim of establishing a design community is unusual, and existing hubs (such as Shoreditch) have mostly grown organically. However, the purpose-built facilities at d3 have designers’ specific interest in mind. In particular, up-and-coming labels and designers can utilise studios, ateliers and workshops. In the longer term, d3 will also establish its own hotels, retail space and residential areas. Ultimately, the d3 ecosystem will occupy 25 million square feet adjacent to Dubai’s business district.

d3 is one of several government-led initiatives aiming to diversify the UAE economy and foster the growth of SMEs. By facilitating design-led business, Dubai’s leaders hope that the number of jobs within the sector will increase and make a greater contribution to GDP. A broader aim is to promote UAE and regional designers and to host design industry-related events. The GCC luxury fashion market was estimated to be worth AED 54 billion in 2013, AED 23 billion of which was attributable to the UAE. However, a relatively small proportion comprises home-grown labels, and another goal of d3 is to raise the profile of local brands.

The licensing authorities have taken the unusual step of allowing d3 businesses the choice of establishing either an onshore or free zone entity. Foreign investment rules in the UAE restrict non-UAE shareholdings in onshore entities to 49 percent, with the majority share held by a UAE entity. Although non-UAE nationals may own 100 percent of the share capital in a free zone company, these companies may not trade onshore. d3 is technically part of the Dubai Technology & Media Free Zone, but businesses operating within d3 will have the choice of establishing either an onshore LLC or a free zone licence (which may be 100 percent foreign-owned). Both entities will be permitted to operate within d3.

d3 is being launched in several phases and the first licences have already been issued. Going forward, d3 seems likely to be a catalyst for change in the UAE’s design sector. For example, the IPR regime in the UAE is not always consistently implemented. Enforcement can be slow, there are no specialist IP courts and certain remedies (such as injunctions) are rare. Historically, the UAE market tended to license-in IPRs (most notably, brands and trademarks) from outside, meaning that the main impact of these challenges was felt outside of the UAE. As the UAE’s own creative output increases, and its market matures, this may well drive increased recognition and awareness of IPR.Certainly, a robust enforcement regime will place the UAE in an excellent position to cement its reputation as the design and retail hub of the Middle East.