The process of business setup in the UAE demands the foreign investors to make certain strategic decisions such as choosing between a free zone and the mainland. Setting up a business in a free zone comes with benefits including easy licensing procedures, minimal government approvals, modern facilities, and the availability of all the services under a roof. On the other hand, opening a company in the mainland is necessary to trade anywhere in the UAE directly.
Investors setting up businesses in free zones lack the freedoms to trade in the profitable UAE market. However, certain free zones in Dubai and nearly all free zones in Abu Dhabi have signed agreements with the mainland licensing authorities popularly known as The Department of Economic Developments (DEDs) to issue a Dual License which will allow the free zone businesses to operate in the mainland as well. Let’s explore Dual Licensing, the list of free zones that allows Dual licenses and its benefits.
What’s a Dual License System?
The dual Licensing allows the companies operating in the free zones to extend their operations to the mainland without leasing additional office space or having a local shareholder. The system was introduced by certain free zones in Dubai and Abu Dhabi by partnering with the Department of Economic Development (DED), Dubai and Abu Dhabi Department of Economic Development (ADDED). Foreign investors who are keen to know about the Dual Licensing are advised to seek the assistance of the best business setup consultants in the UAE before proceeding with the application.
Which UAE Free Zones offer Dual Licensing?
The following free zones in the UAE offers a dual license:
- Dubai Design District (D3)
- Dubai Airport Free Zone (DAFZA)
- Dubai International Financial Centre (DIFC)
- Abu Dhabi Global Market (ADGM)
- Abu Dhabi Airports Free Zone (ADAFZ)
- Khalifa Industrial Zone Abu Dhabi (KIZAD)
- Twofour54, Abu Dhabi
- Dubai Multi Commodities Centre (DMCC)
Benefits of a UAE Free Zone Dual License
The following are some of the top benefits of applying for a dual license in the UAE:
Cost Saving
By initiating the process of business setup in Dubai or Abu Dhabi free zones under a dual license, the investors can start mainland operations without much spending. Since they can operate from their free zone office, the investors can cut the costs of renting a new office space on the mainland.
Saving Time
Holding a dual license is a better way of setting up a mainland business in lighting speed. Setting up a new entity in Dubai or Abu Dhabi mainland normally takes more time than getting a free zone license. Under a dual license system, it is easier to obtain a DED mainland license without any stringent scrutiny.
Better Governance
The investors can ensure their business will thrive under better governance and regulations implemented by the free zone authority as well as the DED.
A Chance to Boost Profitability
Starting a business in a UAE free zone comes with one great disadvantage. The investors are allowed to do business within the free zone. A dual license allows the investors to do business directly in the UAE market just like any mainland company.
Conditions for Initiating Process of Dual License Business Setup in Dubai
The process of business setup in the UAE under a dual license is covered by certain conditions. The following are some of those conditions and restrictions:
- The workforce can be employed under a free zone visas only as the mainland division is not allowed to register with the Ministry of Labour
- Only those free zones that have an active agreement with the DED can issue a dual license
- Not all activities are eligible for dual license
- The activities of the free zone company and its mainland entity should be the same
The permitted activities under a dual license depend on the free zone’s agreement with the DED. Business set up consultants in Dubai can provide the investors with knowledge about the type of activities allowed by each free zone under the dual license system.
Seek Advice from Best Business Setup Consultants in the UAE
Free zone businesses no longer need to lament their inability to access the lucrative UAE market. Selected free zones in Dubai and nearly all free zones in Abu Dhabi permit the companies to extend their operations into the mainland under the dual license system. The dual license has made the process of business setup in Dubai and Abu Dhabi more attractive for foreign investors. However, the assistance of business setup consultants in Dubai is advisable as there are certain stringent conditions and restrictions.
Company formation advisers in the UAE such as Jitendra Business Consultants (JBC) are experienced in helping out companies with obtaining a dual license. JBC’s highly qualified business setup specialists can assist the investors with the legal requirements they should meet to obtain a Dual License. JBC’s assistance simplifies the process of getting a dual license, which ensures seamless access to the UAE market for free zone companies.
