Abu Dhabi’s First Phase of Dual License Initiative

by commitbizadmin 08, Apr 2019

Abu Dhabi’s First Phase of Dual License Initiative

The Abu Dhabi's Department of Economic Development (DED) has launched the first phase of its Dual License Initiative (DLI) as announced on 15th September 2018. The Department of Economic Development function as regulatory body for the issuance of licenses and regulating the economic policies in the Emirate of Abu Dhabi.

Why the Dual License Initiative?

On the implication of Dual License Initiative, companies operating in Abu Dhabi free zones shall have the capability of holding dual licenses, empowering for such a company to establish and enforce an onshore branch in Abu Dhabi’s Al Ain and the Al Dhafra regions.

  • The previous license system placed various conditions on free zone companies looking to operate onshore, such as applying for a separate onshore license, associating with an onshore service agent, leasing suitable premises.
  • This initiative allows companies to up work outside the free zones in which they are based, further increasing their contribution to the economy. The Dual License attracts more foreign investment into Abu Dhabi.
  • In its first phase, the initiative offers the companies more opportunities to do business and grow, such as allowing them to work and partner with other government entities.

The DED has stated that the second phase of the Dual License Initiative aims to bring in various types of companies under the eligibility of dual license.

Eligibility and Procedure for Obtaining the Dual License in Abu Dhabi

Dual licensing will be available to companies registered in one of the free zones of Abu Dhabi, but will not apply to entities registered as branches in such free zones.

  • No-objection certificate

Companies present a no-objection certificate from the respective free zone they were established. The no-objection is for acknowledging that no ownership of branches situated outside the free zone and a supporting document of free zone license in the name of the parent company.

  • Dual License Cost

Once the application is submitted, it transfers for further approval. Once approved, the license will go for print upon the payment of the required fees. According to Abu Dhabi DED, Standard license fees apply to dual licenses. The costs depend on several factors, such as the legal form and pursue further tasks. The Dual licenses exclude physical location and a nameplate. Therefore, the cost of a dual license is 80 percent less than that of a standard license.

The license time-frame depends on the activity. Over 90 per cent are immediate activities done within 20 minutes. Other businesses with a technical nature require approvals from certain entities, and those takes within two to three days.

What Implemented With the Dual License?

With the announcement from the Abu Dhabi DED the below mentioned amendment has taken place. 

1. Elimination of Additional Branch Address

Previously, a branch of a free zone company in Abu Dhabi was supposed to have its distinct address leading to a separate office which in turn called for an additional lease agreement.

With the Dual License Initiative, there is no such requirement address or nameplate to form part of the branch's submissions to the DED. A dual license branch will not need its separate address to be registered with the DED and may operate from the same office as its parent company. This new approach for the dual license branch to have its address to provide far more flexibility and cost saving by not setting this as a prerequisite.

2. Elimination of Local Sponsor for Dual License Registration

Another feature the dual license highlights at Abu Dhabi unlike any other emirate is the absence of requirement of a local sponsor to register a dual license. Parent company itself acts as the sponsor.

By eliminating the requirement to partner with a domestic agent, companies interested in acquiring a dual license can avoid the additional costs and paperwork associated with these associations, as well as the time spent finding a suitable agent.

3. Mandatory Appointment of Branch Manager

The dual license branch does not with issue its establishment card. To make the hiring of employees more feasible, the parent company is to sponsor dual license employees. Appointing a manager of the dual license branch will be compulsory. Favourably the manager is also to hold the power of attorney to have the authority of dual license branch.

To know further about the Dual License Initiative, a hassle free registration for the dual license contact us at Commitbiz Business Setup Consultants.