Dubai, by its progressive business location backed by government initiatives and policies in the upbringing of different business ideas, had become a favourable choice for entrepreneurs. The availability of different free zones like JAFZA, DMCC, Dubai Airport Free Zone, etc. makes the establishment easier. Investors are showing more interest in these free zones because of the significant benefits provided by them. There are more than 30 free zones in Dubai, which provide easy and quick establishment policy. Entrepreneurs are keen to know about the benefits of setting up business in a free zone, to avail 100% ownership and local sponsorship.
Dubai Multi Commodities Centre (DMCC)
Dubai Multi Commodities Centre (DMCC) is a free zone, which is growing fast and is amongst the largest economic zones in the United Arab Emirates. DMCC came into existence in 2002, and achieved prosperity by getting registered with 15,000+ members till 2018. DMCC registers approximately 170 companies every month. Some of the leading industries accommodated by DMCC include gold, diamonds, colored stones and pearls, energy-related sectors, steel and base metals, and soft agricultural commodities (tea, cotton, and others). Trading and establishment are quite easy in DMCC, and with the increase in government initiatives, company formation in DMCC has proven to be very effective and profitable.
DMCC recently launched the Middle East’s first Google for Entrepreneurs Global Tech Hub in collaboration with AstroLabs Dubai. The Dubai Expo 2020, a global platform to exhibit innovation, ideas and collaboration, is grabbing more attraction of investors towards Dubai free zone. Before we take a big dive into business setup in DMCC, let’s go through the essential factors to be considered before setting up a business in DMCC.
Seven Factors to Consider before Setting Up a Business in DMCC
Here is the list of factors we should be aware of before setting up a business in DMCC:
1. The Company Type
The first step is to determine the kind of company you want – (1) Branch of local or foreign company, or (2) Limited Liability Company (either as a newly formed entity with single or several shareholders or as a wholly owned subsidiary of a foreign or local company).
The decision is mandatory as you can proceed further for visas and other requirements accordingly.
2. The Type of License
DMCC license is of the following three types:
General Trading License
Permits the import, export, distribution, consolidation, and storage of products, excluding a few.
Gives authority to engage in service or consultancy activities that are specified in the license.
Allows the implementation of light production activities specified in the license.
3. Business Activity
The type of business activity you want to involve in like trading, manufacturing, services, etc. are to be fixed before handed so that you can proceed as per your specified business plan. The fixation of business activity will help you to apply for visas and license; accordingly, different licenses are issued for different business activity.
4. The Name of Company
The company name is an integral part of the legal procedure, and the title should signify the type of business activity. The company’s name should not contravene the activity you are involved in. The name should not be similar with the name of an already established company. The name should also be unique. The DMCC rules and guidelines for a company name can be found on the DMCC website.
5. Choosing an Office Space
The important point here is to choose an office space, as you have to decide what type of office area you need. Whether you need a warehouse, an office or a building, it is to be chosen as per your requirement. The decision of appropriate office is required to save your over expenditure cost for the place.
6. Capital Requirement
In DMCC, the minimum share capital required for forming a free zone company is AED 50,000 per company and AED 10,000 per shareholder. For a general trading company, it should have a minimum share capital of AED 1 million.
7. Bank Account in Local Bank
A local bank account is needed to deposit a company’s share capital value within three weeks from the issue date of the company license. Shareholders can withdraw the amount any time after that. Branches of the company do not require a share capital requirement.
DMCC formation seems to be attractive and effective as the government is giving full ownership and full right without local sponsorship. This free zone is now one of the most preferred choices of an entrepreneur because of the various benefits provided by it. An investment in DMCC is sure to be fruitful.
Commitbiz is here to help you set up your business profitably in DMCC Free zone in Dubai. Our team has enabled hundreds of businesses to run successfully in the region. To know how we can help you, contact us today.