An increase in GDP, a stable economy, and a strategic geographical location have made Dubai one of the most favorable locations in the UAE. However, one must have a license to set up a business in Dubai, be it the mainland or any free zone in Dubai. Therefore, getting a dual license in Dubai is fast prevailing and has become a demand among business people and entrepreneurs.
Earlier, the Department of Economic Development (DED) disapproved of acquiring more than one business license in Dubai. However, you can now get a dual license by registering a business at Dubai Airport Free Zone Authority (DAFZA) or Dubai International Financial Centre (DIFC) and applying for a business license at the DED.
Breaking-Down Dual Licensing in Dubai
Free-zone companies long demanded dual licensing in Dubai, whose interest lay in operating in multiple enterprises and having a broader outreach in the UAE market. However, before the dual license was approved, these companies were allowed to operate only within the boundaries of the free zone. As a result, they missed many opportunities to trade in one of the fastest-growing markets in the Middle East.
Now that the DED has approved the dual licensing, it will allow the authorities to ensure better governance and regulations. The DED will have the power to alter or add to the existing activities of the businesses. It will also enhance monitoring and joint inspection, which will, in turn, improve transparency and compliance with the free zones and prevent fraud.
Benefits of Getting a Dual License in Dubai
Below are the benefits of obtaining a dual license in dubai;
- Increase opportunities and business choices for commercial enterprises
- Less risk. One or another business will get successful based on the choice of your business category.
- The Dual Licensing system in Dubai will bring much value to the economy of Dubai and the UAE.
Which Freezones are Eligible for Dual License in Dubai?
Such free zones have offered dual Licensing as Dubai Design District (D3), Dubai Airport Free Zone (DAFZA), Dubai International Financial Centre (DIFC), and all Abu Dhabi Free Zones (ADGM, ADAFZ, KIZAD, Twofour54, and Masdar) and the latest addition; Dubai Multi Commodities Centre (DMCC).
What are the Restrictions under Dual License?
Currently, the Dual Licence in Dubai will not be able to register with the Ministry of Labour; therefore, the mainland dual license will not hire staff or issue labor cards and work permits. That means all staff will still be employed within the freezone company and hold freezone resident visas only. It also means that office space will have to be more prominent in the Freezone to accommodate these new staff members; in some Freezone, this can significantly increase costs.
How Does Dual Licensing in Dubai Happen?
DAFZA and DIFC got under an MoU (Memorandum of Understanding) to promote and operate a business across Dubai. With a growing number of foreign investors wanting to start multiple companies, the MoU agreement allowed them to do so across Dubai.
The MoU attempts to intensify Dubai as an ideal commercial destination that supports flexible strategies to create an investment-friendly environment. It is also important to note what the MoU mentions exactly. It says that:
- The Department of Economic Development in Dubai could modify any exercise related to the licensing of corporations.
- The dual licensing is approved only by the particular free zones.
- The company incorporation related to any free zone and dual license would be ascertained by the Department of Economic Development, adhering to the law.
- The MoU endeavors to strengthen Dubai as an ideal business destination and promote compliant approaches to build an investment-friendly environment.
Dual licensing will enable more business opportunities for the business people in Dubai as it will widen their markets outside their free zone. With adherence to the fundamental laws established according to the DED, the business credibility will also sharp rise across Dubai. And with the amazing benefits that it carries along, dual licensing can help your business grow further.
As we look at the business success in Dubai, it is now the right time to start. But the business setup needs the proper techniques, assistance, and guidance. We at Commitbiz can help you make your license process easier. Do contact us for more information.
What are the benefits of holding a dual license?
Businesses operating in the free zones can access the UAE market without setting up a branch on the Dubai mainland.
What are the advantages of establishing a Dual License branch on Dubai mainland for free zone companies?
- Possibilities for further business prospects on the mainland
- Save costs on renting additional offices space
- Expenses for accounting, administration, and operations should be reduced.
- 100% ownership of a mainland company
What is the purpose of Dubai's dual licensing system?
The dual licensing system will bring significant value to Dubai's and the UAE's economies and attract foreign and international investors.
What are the essential stages in establishing a business in the Dubai freezone?
- Determine the legal entity's nature
- Select a trading name
- Make an application for a company license
- Choose an office location
- Get pre-approvals, register your company and obtain a license
Whether I need to pay any tax in freezone?
If you do not conduct any business activity on the mainland, it is not necessary to pay tax in the freezone
In a freezone, who applies for a 9% tax?
The 9% tax applies to freezone enterprises who gain financially from the mainland.