In the last four years, there have been several announcements about dual licensing from many of the free zones in the UAE.
There was a time when there were certain legal and geographical restrictions on companies that wanted to operate onshore or offshore. The majority of businesses complained that they had to drastically reduce their profit-earning capacity and alter their business model in order to meet this defined set of requirements.
This new initiative will now remove all conditions and restrictions, and within no more than 3 business days, businesses may get approval for their dual license.
The Abu Dhabi Department of Economic Development or simply called ADDED launched its dual license initiative back in 2018. If you want to know how to obtain a dual license in Abu Dhabi to operate your company onshore and offshore, you are at the right place. Follow the steps given ahead to issue a dual license for your business.
Brief Introduction of Dual License Abu Dhabi
Most people must be knowing what a dual license is. This section is for those who don’t have a clear idea of the dual license. Previously, companies operating in the free zones of the UAE were not permitted to conduct direct business activities on the mainland. Let’s take an example of a furniture manufacturer. He/she would need to hire a regional distributor to sell its goods in Abu Dhabi and in the mainland of the United Arab Emirates. The local distributor is often an LLC in Abu Dhabi.
Companies formed in free zones of Abu Dhabi, UAE such as KIZAD, will be able to open a branch onshore thanks to the Dual Licensing system. Previously, it was necessary to rent an office space, go through a laborious incorporation process, and hire local service agents for their services in order to start an onshore branch company in Abu Dhabi.
The preceding conditions are now not implemented anymore. Therefore, companies submitting applications for a dual license won’t need to hire a local service agent or rent additional office space for their branch office.
Furthermore, operational costs of a business are reduced by more than 80% due to the dual license option.
Let’s move on with the process of issuing a dual license:
Documents Required to Issue Dual License in Abu Dhabi
Some of the documents that must be given to the DED are listed below.
- A copy of the parent company’s free zone license
- An undertaking document stating that the business has a branch in the Emirate that is not within the free zone
- A letter of no objection from the authorities of the relevant free zone
Requirements and Eligibility to Get the Dual License in Abu Dhabi
The process of obtaining a dual license is more cost-effective and straightforward than the prior license system. There are is eligibility criteria and a number of requirements to obtain a dual license in Abu Dhabi, UAE. Companies that are registered in one of Abu Dhabi’s free zones will be able to obtain a dual license. However, this will not be the case for firms that are listed in the free zones as branches.
Other requirements and eligibility criteria for getting the dual license in Abu Dhabi include –
- The dual license branch won’t receive an establishment card. Plus, it will be the parent company’s responsibility to sponsor the dual licenses for branch employees. This should make the recruiting process easier as work permits can be obtained without going through typical onshore immigration systems.
- Since the parent firm will serve as the sponsor in effect (national agent), it will not be necessary to hire a service agent for the setup of a dual license branch.
- Appointment of a dual license branch manager is also required. A power of attorney in the manager’s favor will also be required to ensure that the manager has the necessary power to act on behalf of the dual license branch and take important decisions in the hour of need.
- There is no requirement for the nameplate or physical address to be included in the branch’s application to be submitted to the DED. It is so because the dual license branch will be able to operate from the same location as its parent business and will not require a separate address to be registered with the DED.
How to Get a Dual License in Abu Dhabi, UAE
Here are the steps to follow to obtain a dual license in Abu Dhabi for your company:
- Submit your required documents including NOC along with an application form for the dual license to the relevant government body
- Once you have got your initial approval, pay the dual license charges
- After you have cleared your application fees, the relevant authorities will go through your application. After your application is completely approved, you will get your dual license. In general, the dual license is issued within 2 or 3 business days.
Dual License Amendment
Several procedures are being practiced as a result of the launch of dual licensing. This program has changed multiple things like:
1. No Need for Extra Branch Addresses
In the past years, branches situated in a Free Zone of Abu Dhabi needed a completely different address. This would need an extra lease arrangement. Branches are now allowed to conduct business operations in the same location as their parent company but it is still possible for them to have other office addresses.
2. Removal of the Local Sponsorship Requirement
The dual licensing concept has eliminated the requirement for local agents by allowing parent companies to sponsor businesses that apply for dual licenses. Companies can save extra expenses and the associated hectic paperwork due to this amendment in the dual license.
3. Hiring a Branch Manager
Dual-licensed branches are now required to appoint a branch manager. Branch managers are given a Power of Attorney that gives them the necessary authority to operate operations in a branch.
The Impact of the Dual License Initiative
The Department of Economic Development in Abu Dhabi has a strong opinion that streamlining multi-branch organizations and reducing administrative and logistic workload will immensely strengthen important economic sectors. This procedure’s first stage is to increase the number of business opportunities in the area.
Moving forward, a sizable stimulus package is a component of a huge financial strategy for the UAE. It would further invigorate the Emirate’s economic growth. Existing businesses have been ordered to evaluate their goals and make any required adjustments due to the dual licensing system. The cost of doing business will be significantly reduced because businesses located in the free zones would be permitted to operate on the mainland.
Benefits of a Dual License
Having a dual license may provide certain advantages, such as
- No need of renting office space on the mainland. You will save yourself a lot of money that you would have otherwise spent on setting up a new company.
- Establishing the onshore branch of the Free Zone company typically takes less time than creating a new company. Having a dual license for your company may prove to be an affordable option to get an onshore trade license while keeping your Free Zone entity and all the advantages that come with it.
UAE Free Zones That Issue Dual Licensing
Free Zones that offer dual Licensing are:
- Dubai Design District (D3)
- Dubai Multi Commodities Centre (DMCC)
- Dubai Airport Free Zone (DAFZA)
- Dubai International Financial Centre (DIFC)
- Abu Dhabi Airports Free Zone (ADAFZ)
- Khalifa Industrial Zone Abu Dhabi (KIZAD)
- Abu Dhabi Global Market (ADGM)
Restrictions on Dual Licenses
Due to the free zone’s dual license requirement, the branch will not be able to register with the Ministry of Labor. In consequence, the mainland dual license will be unable to hire staff and issue work permits and labor cards. In other words, all staff will still hold free zone resident visas and work within the Free Zone company only.
How Riz and Mona Can Help You Obtain a Dual License in Abu Dhabi
Depending on the kinds of operations the applicant company engages in, different licenses may be issued. The activities needing a huge number of permissions from governments and are extremely technical in nature will take a lot more time to process completely.
Despite being a simple procedure, a lot of business owners, well-established businesses, and entrepreneurs opt to get benefits from third-party advice to get rid of some burdens and manage crucial tasks like obtaining business licenses.
Riz and Mona are business setup consultants in the UAE that have the experience needed to communicate with government officials, handle crucial renewals, and much more. If you will get support from business professionals, you can focus more on managing the firm and less on small concerns. Simply contact us right now and we will assist you in getting a dual license in Abu Dhabi.