All you must know about Abu Dhabi Dual License Initiative

by Zaara 11, May 2022

All you must know about Abu Dhabi Dual License Initiative

In September 2018, the Abu Dhabi Department of Economic Development (ADDED) announced its first phase of the dual license initiative. The initiative was open to companies headquartered in Abu Dhabi and based in one of its free zones. This includes Twofour54, Abu Dhabi Global Market and Khalifa Industrial Zone. The licence programme comes under Dhs50bn (($13.61bn) of stimulus measures announced by Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces Sheikh Mohamed bin Zayed Al Nahyan in June.

What is Dual License Initiative in Abu Dhabi?

Dual licensing in Abu Dhabi helps companies operating in an Abu Dhabi freezone to operate in both capital's free zones and establish an onshore branch. The main aim of this initiative is to encourage investment and also drive economic development across the Emirate. It also includes an array of initiatives that would improve the ease of carrying on business in Abu Dhabi and support entrepreneurs, Small and Medium-sized Enterprises (SMEs), and the private sector. His Excellency Saif Al Hajeri, Chairman of the Department of Economic Development of Abu Dhabi, affirmed this initiative's purpose to widen the horizons of business transactions in the Emirate.

Who is Eligible to Get a Dual License?

To be eligible, there are several documents that the free zone companies must present as the requisites for the application that would enable them to obtain an onshore license.

Limited Liability Companies (LLC) registered in one of the Free Zones of Abu Dhabi will have the option of obtaining a Dual License. The dual License Initiative will apply to entities registered as a foreign branches in such Free Zones. Additionally, Special Purpose Companies (SPCs) or Special Purpose Vehicles (SPVs) will not open a branch onshore.

Following are some of the documents that need to be presented, and they include, but are not limited to:

  • A No Objection Certificate from the respective Free Zone Authority
  • An undertaking is mentioning that the company has a branch in the Emirate outside the Free Zone.
  • A copy of the Free Zone license of the parent company.

How to Obtain a Dual License in Abu Dhabi?

Here are the steps to consider –

  1. Submit the documents with an application form and get an initial approval
  2. After the initial approval is received, the license then goes for printing post the payment of the applicable fees
  3. Get the dual license

What is the Cost of Obtaining Dual Licensing?

Standard fees apply to dual licenses, as they do for other permits, and the same is following the statement of the Abu Dhabi Department of Economic Development. But it is pertinent to note that the fees may vary between different companies. The same depends on several factors, including which type of a company is applying for such license and the activities carried out by such a company. The signboard and physical address are not included in the dual licenses. For this reason, the costs incurred by the company are reduced by approximately 80%, according to the Abu Dhabi Department of Economic Development.

Amendments Bought with Introduction of Dual License

Here's what has been implemented with a dual license –

  1. Additional Branch Address Elimination

Formerly, a branch in one of Abu Dhabi's Free Zone was required to have a specific address that led to a separate office. This consequently called for an additional agreement (lease). With the introduction of the Dual License Initiative, there is no particular requirement for an address or nameplate that needs to be submitted with the branch application in the Department of Economic Development. Hence, with a Dual License, the branch will not require a separate address that needs to be registered with the Department of Economic Development. The branch may operate from the same office as its parent company. It is still possible for the Dual License Branch to have an address of its own. However, this new approach provides far more cost-saving and flexibility by not setting this as a prerequisite for setting up business in this manner.

  1. Elimination of Local Sponsor for Registration of Dual License

The Parent Company acts as the sponsor for the registration of the Dual License. This is another attractive feature of the initiative that encourages foreign investment in Abu Dhabi. Unlike any other Emirate, the local sponsor is required for such registration. With the elimination of the need for partnering with a local agent, the companies interested in obtaining the Dual License can avoid additional costs. They are saved from comprehensive paperwork associated with the need of a local sponsor, where other documentation is needed on the domestic agent's behalf. As a result, the process is expedited since finding a suitable domestic agent is eliminated.

  1. Appointment of Branch Manager Mandatory

The Dual License Branch is not issued with its establishment card or a Ministry of Labour file since the same is the parent company's responsibility. Therefore, hiring the employees in the Dual License Branch is far more feasible and is sponsored by the parent company of such branch. A Branch Manager must be appointed for the Dual License Branch. Favourably, the Branch Manager so set should also hold a Power of Attorney to have the established Dual License Branch authority. This is to enable the Branch Manager to have adequate authority to act on behalf of its Dual License Branch.

How can we help?

Should you require obtaining a dual license in Abu Dhabi, we at Commitbiz can help you. Right from business incorporation to office space, we cover it all. Get in touch with us today!

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