How do I set up a DMCC Dual Licence - What are the steps, requirements and limitations?
What are the key considerations of a DMCC Dual Licence?
Companies with certain activities in DMCC Freezone are able to avail a ‘Dual Licence’ onshore which in turn allows the company to have an onshore Department of Economic Development (DED) Licence in conjunction with the Freezone Licence.
- This DMCC Dual Licence appears as a ‘branch’ of the Freezone entity on the DED Trade Licence – although it is not a true UAE Foreign Branch. It does not need Ministry of Economy Registration and will not be considered as a separate legal entity.
- The Dual Licence is a permit and is not a true branch of the Freezone company. The Freezone company is still the only entity that can invoice, hire staff and undertake operations.
- Only DMCC companies holding a service licence that have one or more of the eligible service activities, can apply for NOC to operate onshore, subject to meeting the eligibility criteria. The NOC is valid for 90 days from the date of issuance.
- The company will need to approach the DED with the provided NOC from DMCC and complete the DED requirements for obtaining the permit to operate onshore.
- When applying for the Dual Licence Permit with the DED, the General Manager will need to pass the consultancy exam held at the American University of Dubai.
Before deciding whether you should set up in a Freezone and then obtain a Mainland Dual Licence, or whether you should set up a full mainland LLC Company or Branch office, there are many factors to consider
Can I hire staff on the DMCC Dual Licence?
- No Ministry of Labour (MOL) Card is issued with the Dual licence, meaning that all employees need to be registered and employed under the Freezone entity.
- All visas are attributed to the Freezone and therefore the employees only have an immigration file and no MOL work permit, they are not strictly authorised to work onshore in the UAE Therefore, if your company requires to place employees into another company, for example in a clients’ place of work, or on a construction site, then this will not be possible using these Freezone visas.
- Most Freezones require you to rent around 8-10 sqm per employee and the office space should be taken in the appropriate Freezone. Therefore, Freezone office space can be expensive with typical costings anywhere from AED 1,500/- per sqm. In the mainland, staff who do not have job titles that require them to work in the office and are on site, will not count against the office space allowance – this means mainland companies can keep office space to a minimum where staff are on site or working from outside the office.
What activities can I undertake on the DMCC Dual Licence?
- Only certain activities can be obtained on the Dual Licence.
- The activities must match those of the parent Freezone company.
- Retail, Trading & Industrial Activities cannot obtain a Dual Licence permit.
- Any activities that require special regulatory approvals cannot be added to the Dual Licence – for example Ministry of Health, Training activities, Food Authority, Youth and Sports, Trading, Import & Export.
- In practice this means that the Dual Licence can only contain general consultancy and similar general, non-regulated activities.
What are the Office Rental Considerations within DMCC & Mainland using a DMCC Dual Licence Permit?
- A minimum office size of 300sqft is mandatory within DMCC to be eligible for a Dual Licence. Companies with a shared office, co working space or use of a Business Centre will not be eligible for a Dual Licence Permit.
- Even if staff are working in another mainland office location or on site, the Freezone authority will normally still require the company to rent larger space within the Freezone (at a normal rate of about 10 sqm per new visa) therefore the cost of renting the office space in the Freezone will increase with staff numbers and can become considerable. Some Freezones may give special dispensation if the company can show that some staff are not working within the Freezone office.
- The Freezone mother company of the Dual Licence is able to rent office space in a mainland UAE area, or from a UAE mainland business centre, provided the business centre is happy to rent out the space to a Freezone company.
- The Staff will still have a Freezone visa and will not have a Ministry of Labour work permit, therefore must obtain special permission to work in a mainland office location.
- The Freezone company cannot obtain an onshore Ejari (Dubai) Municipality lease by renting the mainland office space. The Municipality lease would only be issued to a full mainland company.
Whilst in practice, the route of setting up in a Freezone entity and then obtaining a Dual Licence in the mainland sounds like a good option there are a number of other costs and issues to be considered. In reality the dual licence is limited in its scope and growing the business from a Freezone, when the majority of staff and work is done in the mainland, can be restrictive...
If you have an existing company in DMCC and need assistance obtaining a DMCC Dual Licence, or if you are considering the options between setting up in the mainland versus a Freezone, then please do reach out to us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at firstname.lastname@example.org or complete the contact form below and we will be delighted to assist with meeting your needs at this time.
James Elliot-Square is the Business Development Manager at PRO Partner Group. For further information on how to set up a DMCC Dual Licence or any other related company set up, local partner or PRO service matter in the UAE and wider Gulf, contact James on email@example.com or complete the contact form below.