What’s new?
The Dubai Multi Commodity Center (DMCC), the UAE’s largest free zone, has announced the introduction of a dual licensing enabling firms registered in the zone to extend the scope of their activity in the UAE mainland by seeking an additional license from the Department of Economic Development (DED).
The long-awaited move is timely, as it is expected to facilitate business for a number of existing DMCC firms, at marginal additional costs.
The announcement follows a similar scheme implemented by the Abu Dhabi Global Market (ADGM) and the Abu Dhabi DED, allowing for a dual license for ADGM tenant companies [link].
How does it work in practice?
Effective immediately, DMCC companies can obtain a separate license from the DED to cover activities to be deployed in the UAE mainland. A No-objection-certificate (NOC) will be required from DMCC as a precondition to seek dual licensing.
While comprehensive implementation technicalities have yet to be released , the registration procedure is expected to be as follows:
- Secure NOC via the DMCC Portal (fee to be paid)
- Application by DMCC Company for a Dual license Office permit [provision of supporting documentation and payment of fees
- Issuance of DMCC’s initial approval
- Application by DMCC Company to Department of Economic Development for issuance of UAE mainland (dual) license
Eligible licensed activities have yet to be defined by the DMCC. It is expected that the spectrum of activities covered will be broad but not fully comprehensive.
As an ancillary benefit, a DMCC company with an existing DED subsidiary or branch, or part of the same group/ownership, will now be able to operate exclusively from the Jumeirah Lake Towers area governed by DMCC. The option will benefit DMCC tenant as it will eliminate the need to lease an office space in both mainland and DMCC free zone.
What’s next?
There is no stopping ease of doing business in the UAE! Here are some trends to watch going forward: continuous lift of restricted ownership rules in the UAE mainland, further ease to expand one’s business beyond the geographical and regulatory boundaries of free zones, “passporting (or migration) from free zone to free zone and ultimately, from free zone to mainland
Operating a DMCC business?
When was the last time you re-evaluated your corporate structure? Does your license accurately reflect the full spectrum of your current operations? Is your structure still fit-for-purpose?
Entrepreneurs operating DMCC entities and willing to expand onshore or already operating multiple establishments including mainland and DMCC should review their corporate structure/licensing, aiming at a potential structural and costs optimisation.
Restructuring operating entity/ies using ADGM SPVs or DIFC Prescribed companies (Read more – UAE Structuring Series V, UAE Structuring Series I, UAE Structuring Series II) will provide immediate value.
Get in touch with team M/HQ for a complimentary health check of your corporate structure.
For more information on how we can assist you on the above, please contact us through ask@m-hq.com