Dubai has long been one of the most attractive business destinations and the most dynamic markets in the Middle East. The emirate has been able to maintain this reputation over the past many years with a string of visionary policies aimed at building a more diverse economy. The latest in the list of the government’s continuous efforts to transform Dubai into an investment-friendly ecosystem is the introduction of dual licensing.
The result of an MoU between two of Dubai’s free zones (DAFZA and DIFC) and the Dubai Department of Economic Development (DED), the dual licensing system allows foreign free zone companies to extend their operations to the Dubai mainland. This is a transformative new development and comes with the potential to change the entrepreneurship and the business landscape in Dubai.
BREAKING DOWN BARRIERS
Dual licensing was something that was long being demanded by companies and entrepreneurs in the free zones, who were interesting in operating multiple enterprises and also reach out to the UAE market. Before this, these companies were allowed to operate only within the boundaries of the free zones they were registered in. This meant that, even though they were so close to it, they were missing out on a lot of opportunities to trade in one of the fastest growing markets in the Middle East.
INTERCONNECTED BUSINESS LANDSCAPE
The process for obtaining a dual business license involves first registering a company at DAFZA or DIFC and then applying for a dual business license with the Department of Economic Development. The two business activities in a dual business model will be interconnected through the license. Dual licensing allows businesses to explore multiple avenues at the same time. Entrepreneurs will have the chance to take advantage of the various benefits of both the free zone and mainland business models.
IMPROVED GOVERNANCE & COMPLIANCE
The dual business system will also allow authorities to ensure better governance and regulations. With this new agreement, the DED will now have the power to alter or add to existing activities of businesses. The license approvals will be subject to the terms and conditions of both the free zone and the DED. There will also be enhanced monitoring and joint inspections. This is expected to improve transparency and compliance within the free zones, while also preventing fraud and increasing consumer protection.
The dual licensing system is a major milestone in Dubai’s already dynamic business environment. It helps foreign investors and entrepreneurs to explore previously unavailable opportunities in the highly lucrative Dubai market. Additionally, Dubai is also expecting to attract large amounts of FDI and transform the emirate into a more diverse and flexible knowledge based economy, in line with its goals for the coming decade.
If you are a business or an entrepreneur looking to set up a company in Dubai Airport Free Zone or trying to expand your existing operations with a dual license, you might find it helpful to partner with a registered company formation agent who can offer your expert guidance and take you through the complete process.