Dual License Initiative

In a landmark decision announced by the Abu Dhabi Department of Economic Development (DED), Abu Dhabi DED has launched the first phase of its Dual Licenses Initiative, which enables companies to both operate in the Emirate’s free zones and carry out their commercial activities onshore in Abu Dhabi, Al Ain, and Al Dhafra.  Department of Economic Development is one of the government bodies responsible for identifying economic policies. It is the main government body which deals with the issuance of licenses in the region.  The idea of Dual Licence is influenced by the increasing demand for more investment in the business market in the city and country. Dual Licence will reduce the cost of doing business, improve the emirate’s competitiveness as well as attract more foreign companies to the emirate. It will be highly advantageous for the local and multinational companies to explore the business opportunities available in the country. Dual licensing has become popular with increment in the demand for higher business investment in any city, state and country. A heavy positive impact on the economy of Abu Dhabi and UAE is expected with the launch of Dual Licence Initiative.

Dual license

A dual license for a company in Dubai is a matter of demand among entrepreneurs and people in the business.  A dual license is a contract through which a company or businessman can invest in more than one business opportunity.  Dubai has been one of the fastest-growing economies in the country. A high number of visitors from all across the world come and visit various tourist places in Dubai. Growing tourism sector has opened a vast opportunity for both domestic and multinational companies to expand their businesses in Dubai.

Initially, there was not any policy such as Dual license. Therefore, the businesses were, legally, allowed to invest and focus one business segment or industry. With the presence of enormous opportunities in every sector including real estate, hotel, and tourism sector, it was not enough for the companies to fulfill their desires of higher profitability.  Dual will allow the companies to trade outside the free trade zone. The government officials have expected that this initiative will make the companies contribute to the economy of the City and therefore, of UAE.

Aims and objectives of DED

Dual Licence Initiative is a segment of wider planning set to stimulate financial growth and development in Abu Dhabi.  The government is intended to reduce down the level of limitations on the foreign investors and companies to make investment in the country. In particular, Department of Economic Development has launched the DLI to offer a more stable, streamlined and sustainable approach for entities trading in free zone to operate onshore. The department is also aimed to alleviate the restrictions and costs related to the onshore expansion. As per the DED, the second phase of DLI is under process and will be ready to further encompass the eligibility for Dual Licence.

Benefits of DLI

The first phase is open to those companies which are headquartered in Abu Dhabi and based on one of its free zones. A Comprehended scheme for the second phase initiative is currently being developed. This will allow more companies to qualify for a dual license.  Also, this initiative allows companies to expand their work outside the free zones in which they are based, further increasing their contribution to the economy.The move is aligned with the recent economic initiatives of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Chairman of the Executive Board of the Emirate of Abu Dhabi, that include multiple initiatives to improve the ease of doing business in the Emirate and support entrepreneurs, SMEs and the private sector.Saif Al Hajeri, chairman, Department of Economic Development – Abu Dhabi said,  “Dual licensing is the latest in a series of initiatives we have launched to support entrepreneurs, SMEs and the private sector, which are all key engines of the economy. In its first phase, the initiative will offer companies more opportunities to do business and grow, such as allowing them to work and partner with other government entities”Eligible companies will need to present a no-objection certificate from their free zone, an undertaking that states no ownership of branches located outside the free zone, and a photocopy of the parent company’s free-zone license. After the application is submitted, it will be transferred for primary approval. Once approved, the license will be printed upon the payment of the required fees.

Time Frame of License

The license time-frame depends on the activity. Over 90 percent are immediate activities and those are completed within 20 minutes. Other activities with a technical nature require approvals from certain entities, and those are completed within 2 to 3 days, in accordance with the service agreement.Meanwhile, the department’s expanded Tajer Abu Dhabi license package – which previously only supported Emiratis – is now open to all entrepreneurs in the UAE, allowing new companies to obtain commercial licenses without an office or physical presence for two years. This allows entrepreneurs to officially work from home for the first time.

Fees of Dual Licence

The government has applied certain standard license fees to dual licenses. The fees will be applied based on several factors including legal form & activities to be continued.  This Dual Licence does not include provision of physical location & nameplate. That is the reason why the fee of the dual license is 80% less than that of a normal standard license.

The UAE has introduced other reforms aimed at boosting economic growth. Measures announced over the last few months include the waiving of corporate fines in Dubai and Abu Dhabi and allowing 100 percent foreign ownership in companies in selected sectors from the end of this year. With the policy of Dual Licence, UAE is indented to take its business sector to another level in the welfare, development and prosperity of the country.

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