The Dubai Multi Commodities Centre (DMCC) signed a strategic agreement with the Department of Economic Development (DED) on 19 July to collaborate on the licensing of companies in Dubai. The partnership aims to further facilitate trade and boost economic activity in the emirate by allowing companies to operate within the Free Zone and onshore.
The new Memorandum of Understanding (MoU) introduces a dual licensing scheme to DMCC member companies, enabling them to establish a presence and operation in mainland Dubai under a DED licence. DED regulates the economic activity of all onshore companies in Dubai.
The agreement will also enable Free Zone businesses to carry out some service activities onshore, provided they first obtain a no-objection certificate (NOC) from DMCC . The collaboration commits both entities to exchanging information regarding the companies and businesses seeking to expand beyond their existing remit by using blockchain technology.
DMCC Chairman and CEO Ahmed Bin Sulayem said: “As DMCC, we are committed to removing all barriers to trade and ensuring that our member companies have access to the best infrastructure, services and opportunities required for their businesses to prosper. By signing this strategic collaboration agreement with the DED, we are not only promoting and facilitating trade, but also offering businesses the flexibility they need to operate in a competitive marketplace. We are confident that this will encourage more companies to choose DMCC and Dubai as their home.”
It is not yet clear how dual-licensing will affect some fundamental principles of the UAE Federal Law No. 2 of 2015, especially the foreign ownership rules which require a UAE national or a company owned fully by the UAE national(s) to own a minimum of 51% of the share capital.
Dual-licensing will not automatically allow to DMCC companies to own 100% of a mainland company, except through a branch. Nevertheless, there is no doubt that the MoU will offer a higher level of flexibility and will inspire more companies to invest and establish the business in the UAE, particularly in the DMCC free zone.
DMCC is home to 15,000 member companies and 100,000 people who live and work in its Jumeirah Lakes Towers (JLT) community. The Free Zone contributes over 10% to Dubai’s GDP.