Dual Licensing is the most recent development offered by some UAE free zones providing free zone companies with the ability to extend into the mainland 'onshore' UAE.
The Abu Dhabi Department of Economic Development launched its first phase of the Dual Licensing System in the year 2018. To people who are not aware, DED is the regulatory body responsible for determining the economic policies and the issuance of licenses in the Emirate of Abu Dhabi.
What is a Dual License?
Companies incorporated in the free zones were earlier not allowed to conduct business in the mainland directly. For example – a company dealing in furniture would have to appoint a local distributor (usually an LLC in Abu Dhabi) to distribute products in Abu Dhabi and the rest of the UAE mainland. The Dual Licensing system will allow companies incorporated in Abu Dhabi free zones like KIZAD, to establish a branch onshore. Earlier, to open an onshore branch company in Abu Dhabi included additional conditions like the elaborate process of incorporation, leasing office space, and enlisting the services of a local service agent.
The requirements above are now waived. Which means, businesses applying for the dual license will not have to take extra office space or take on a local service agent for their branch office.
Additionally, the dual license option reduces the costs of operations by over 80%.
Eligibility and Requirements to Obtain the Dual License
Dual licensing will be accessible to companies that are registered in one of Abu Dhabi's free zones, but will not apply to entities listed as branches in such free zones. Other eligibility and requirements include –
- No obligation for a physical address or a nameplate to form part of the branch's submission to the DED. As dual license branch will not need its separate address to be registered with the DED and may function from the same office as its parent company
- The appointment of a service agent will not be essential for the establishment of a dual license branch, as the parent company will effectively act as the sponsor (national agent).
- The dual license branch will not be issued with its establishment card, and it will be the accountability of the parent company to sponsor dual license branch employees. This should ease the procedure for hiring employees as it will not be essential to go through standard onshore immigration channels to obtain work permits.
- Mandatory appointment of a manager of the dual license branch. A power of attorney in favor of the manager will also be wanted to make sure the manager has sufficient authority to act on behalf of the dual license branch and make crucial decisions.
- Straightforward and cost-effective process than the preceding license system
Procedure to Obtain Dual License in Abu Dhabi
The dual license is available to the free zones in Abu Dhabi. Here are the steps to be followed.
- Obtain NOC from the respective free zone and provide it to the Abu Dhabi DED. It must also contain information and supporting documents on the free zone license
- Apply for the license, get it approved, after which a payment voucher is generated of the associated license fee. The fee is standard and depends on the legal form and other matters. Nevertheless, since the requirements of a physical office and nameplate are waived, dual licenses cost up to 80% lesser than conventional licenses.
That's it. There are just two simple steps involved. Most applications are administered within a day. In some cases, external approvals may be required, and hence the process takes up to 2-3 days.
The following are some of the materials that must be presented to the DED.
- A No Objection Letter from the respective free zone authority
- An undertaking mentioning the company does have a branch in the Emirate which is outside the free zone
- A copy of the free zone license of the parent company
Impact of Dual License Initiative on UAE Businesses
The dual license initiative is undoubtedly a positive step that encourages businesses and investors to be motivated for the expansion of their company in Abu Dhabi; as a result, the advancement of economic development, growth, and prosperity in Abu Dhabi is boosted.
How can Commitbiz help?
We at Commitbiz can help you obtain the Dual License in Abu Dhabi. Our specialists are well-versed with the legalities of the DED and can make the process hassle-free. Contact us today to learn more. We’d be happy to assist you.