Established in the year 1999 in the heart of New Dubai, Dubai Internet City (DIC) free zone is the largest Information and Communications Technology (ICT) business park in the entire Middle East and Northern Africa (MENA). DIC is the typical provider of a tactical and economic platform for ICT companies which are trying to find their share in the market, and with the introduction of “in5 system” in 2013 for tech start-ups in Dubai and new entrepreneurs, it has witnessed a great boom. Located 25 kilometers from Dubai, the free zone is strategically great for attracting dynamic IT international community to set up their operations in DIC.
With great facilities and world-class infrastructure, a business-friendly environment, flexible legal structure and an affable ecosystem for global and regional companies and entrepreneurs to set up their IT firms in the UAE, DIC is a domicile for many global ICT companies, including Microsoft, Oracle, HP, IBM, Dell, Siemens, Canon, Logica, Sony Ericsson, Schlumberger, Cisco, as well as many of the small and medium-sized businesses and entrepreneurial ventures.
Why Dubai Internet City (DIC) for Business Setup?
Dubai Internet City is one among the three initiatives by Dubai government to make it the global hub for knowledge and innovation, the other two being Knowledge Village and Dubai Media City.
DIC is the perfect place for IT business setup as it offers the best technology start-up ecosystem and has all the elements of the ICT value chain. Robust IT infrastructure, an extensive talent pool of multi-lingual & skilled staff, tranquil landscape, state-of-the-art offices, excellent retail services, residences & hotels, and 24-hour security ensures that this IT free zone is the strategic base for over 2 billion IT people around the world contributing towards a GDP of $6.7 trillion. The benefits of setting up a business in this Dubai free zone are:
- 100% exemption from personal and corporate income taxes for 50 years
- 100% exemption from customs duty
- 100% foreign ownership
- 100% repatriation of profits
- Dynamic international community
- Opportunities for business interaction, networking and market development
- Communications infrastructure based on next-generation technologies
- Digital voice and high-speed data services offered at competitive rates
- World’s largest commercial IP telephony network
- Reasonable operating costs
- Pre-existing infrastructure, business conference facilities, and commercial office setup apt for technology companies
- Presence of star hotels, and retail chains, 24-hour medical help and security and access to advanced fitness, banking, and ATM facilities
Types of Legal Entities in DIC
Dubai Internet City is isolated from mainland UAE due to which the companies set up in DIC are not allowed to do business outside the free zone, although companies have been provided with sufficient amenities to start their venture in DIC. The following entities can be legally registered in DIC:
1. Free Zone Limited Liability Company (FZ-LLC)
A limited liability company in a free zone can be owned by 1 to 50 individuals or corporate shareholders with a minimum share value of AED 1,000 and a minimum share capital investment of AED 50,000.
2. Branch of a UAE Company
This refers to a branch by an applicant who is a UAE resident. It doesn’t have any capitalization requirement.
3. Branch of a Foreign Company
A branch of a foreign company in DIC can be formed by an applicant who is a foreign national, and such a company doesn’t have any capitalization requirement.
Business Licenses in Dubai Internet City
DIC allows all types of businesses to be set up in the free zone, but these are the most prominent licenses:
1. Software License
A software license in DIC is for any activity related to developing, installing and/or modifying software products of the company or of a third party.
2. Telecommunication and Network
This license must be obtained for any activity related to developing, installing, modifying, and/or operating networks or providing relevant services designed for operating network-based applications or services for self or for third parties.
An e-commerce license is required for any activity related to individual services and products to third parties through electronic media such as an internet search engine, portal, website, social media etc. for the purpose of selling goods and services.
4. IT Service
An IT service license encompasses any activity related to developing and/or providing standardized repeatable IT-based services, which may also include security solutions, localization, training and corporate learning.
5. Internet and Multimedia
This license should be procured for any activity related to developing and/or distributing internet or multimedia content. Other activities may include distributing goods or services via the internet, such as by providing an online platform and acting as an intermediary between multiple companies or multiple individuals.
Licensing Cost in DIC
|Activity||1st Yearl6 (in AED)||2nd Year (in AED)|
|License Cost per Segment||15,020||15,020|
|Additional Cost per Segment||10,010||10,000|
Process of Starting a Business in Dubai Internet City
To start a company in Dubai Internet City, one can follow these steps:
- Submit a business license application along with the proposed business plan and passport photocopies of all shareholders, managers, and directors to the Free Zone Authority.
- DIC Authority will review the application and grant provisional approval letter to the applicant with a checklist of required legal documents.
- Provisional approval letter must be accepted by the applicant, signed, stamped and sent back to DIC.
- Submit all legal documents within 15 working days from the acceptance of the Provisional Approval Letter [there are different set of legal documents to be submitted depending on who the applicant is – a corporate body, branch of a foreign or UAE company, or an Individual).
- DIC will review the legal documents, send applicant a Customer Confirmation Letter and check if the required office space is available.
- The applicant has to return a signed and duly stamped Customer Confirmation Letter to the DIC.
- After receiving the Customer Confirmation Letter, DIC will issue an invoice for initial payment (fee for license and registration and 34% rental of the total annual lease).
- DIC will issue Personnel Sponsorship Agreement and office space Lease Agreement after receiving the initial payment.
- Upon receiving the signed and stamped Lease and Personnel Sponsorship Agreement, DIC will issue a trade license allowing the company to start trading.
- DIC will issue the invoice for outstanding lease rental amount payable in two installments after issuing the trade license (33% first installment payable after 4 months from the initial payment date, and 33% second installment payable after 4 months from the date of payment of first installment).
Commitbiz has been facilitating IT start-ups, SMBs and multinationals set up their base in DIC, by offering them business support services like business licensing and registration, administrative support, legal documentation, fully-furnished office-setup, etc., to foster their business growth. Our specialized team will connect you with investors and help you in your new venture by evaluating the market potential. Contact us, and we will shoulder all your company formation needs in DIC.