Dual License

There have been a number of announcements from many of the UAE’s Free Zones in the last 20 months with regard to the concept of Dual Licensing.

In the past, companies that wanted to operate offshore and onshore were required to meet certain legal and geographical conditions. Businesses often complained that in order to meet these conditions, they were required to change their operating model and reduce their profit-earning capacity significantly. This new initiative will now remove all restrictions and conditions, and companies may get an approval for a dual license within 3 business days.

In 2018, the Abu Dhabi Department of Economic Development (ADDED) announced the launch of its Dual License initiative.

This scheme enables companies in the region to carry out business operations in the Emirates’ Free Trade Zones (FTZs), as well as onshore in Abu Dhabi and Al Ain. In addition to boosting foreign investment, the initiative is also expected to foster economic development across the UAE.

With regard to Dubai, there are 4 Free Trade Zones that have signed a strategic agreement with the Department of Economic Development (DED) to collaborate on the licensing of companies in Dubai. This partnership aims to further facilitate trade and boost economic activity in the Emirate by allowing companies to operate within the Free Zone as well as the Mainland.

• However, in essence, what does a Dual License really represent and how can it benefit your UAE operations?

  A dual license allows a Free Zone-registered company to apply for a Mainland license which authorises the company to conduct business activities outside the border of that Free Zone without the need to acquire additional office premises.

• Some potential benefits of having a dual license include:

  - Cost Saving, including not being required to obtain an office space in the Mainland. It also offers the added benefit of highly competitive costs that are involved in setting up the new entity.

  - The timeframe involved in establishing the onshore branch of the Free Zone company is usually quicker than establishing a new entity. Holding a dual license for your business can be a cost-effective way to obtain an onshore trade license, whilst also maintaining your Free Zone entity and the benefits associated with this.

• Which UAE Free Zones offer Dual Licensing?

  Dual Licensing has been offered by Free Zones such as Dubai Design District (D3), Dubai Airport Free Zone (DAFZA), Dubai International Financial Centre (DIFC) and all the Abu Dhabi Free Zones – Abu Dhabi Global Market (ADGM), Abu Dhabi Airports Free Zone (ADAFZ), Khalifa Industrial Zone Abu Dhabi (KIZAD), Twofour54 and Masdar. The latest addition to this list of Free Zones is the Dubai Multi Commodities Centre (DMCC).

• What are the restrictions on Dual Licenses?

  At the moment, the Dual License Branch from the Free Zone will not be able to register with the Ministry of Labor, therefore the mainland dual license will not be able to hire staff or issue labor cards and work permits. That means that all staff will still be employed within the Free Zone company and hold Free Zone Resident visas only.

For further information on how to set up a dual license company, please send us an email [email protected] or WhatsApp +971 524037251