Breakthrough The Limitations Of Free Zone Company Formation in Dubai with THIS Provision

The free zones of Dubai have been the economic hotspot of the United Arab Emirates, thanks to the number of commercial benefits they offer. Businesses thrive in the tailor-made arena, where, from consumerism to availability of goods and services, are made for each other.

Free zones deal with more than one type of commercial activities and some of them solely support a certain vertical. Say, for example, there are healthcare-dominating free zones that support the healthcare sector exclusively.

Entrepreneurs and foreign investors can choose from several operating free zones scattered across the United Arab Emirates to locate their business. For example, a company dealing with media can opt for Dubai Media City as it deals primarily with media-related activities.

Apart from creating and sustaining the consumerism-provoking environment, these free zones are the hub of business for more than one reason. The prime among many reasons that make free zones a lucrative choice is- no restriction on foreign ownership.

Unlike operating commercial activity in the mainland, free zones doesn’t require foreign business owners to partner with a local UAE resident to get a particular share on their business. Free zones allow one hundred percent foreign ownership, regardless of the type of business, along with other benefits like a fast start-up, and straightforward legal formalities among others.

But then the free zone company formation in Dubai has its own rules and regulations. They are known for imposing rules that vary from free zone to free zone. This can, at times, stand in between the lenience you’ve wanted for your business, and what you’re getting.

For example, free zones in Dubai forbid the companies operating within the zone from conducting business by crossing the borders. Put- free zone companies ideally cannot work outside their restricted zone like in the mainland.

Can Free zone Company Formation in Dubai Allow Business Outside Free zones?

Sounds impossible right? Conducting business outside free zones. But it is possible! Using the provision of Dual License, a free zone registered company can apply for a license to operate onshore in certain places in the UAE.

This allows the free zone business to break through the restriction and participate in a commercial activity outside the borders of the free zone. Acquiring this license doesn’t require the business to obtain additional office premises.

More and more free zones are warming up to the provision of dual licenses like those in Dubai and Abu Dhabi. By contacting the respective Department of Economic Development business operators can get the authority to transact outside their borders harnessing this license.

With dual license comes several benefits like cost-effectivity as you do not have to set up an office space to operate in the mainland. Now you can perform in the region while continuing in the free zone.

Just recently, DMCC partnered with the Department of Economic Development to allow companies operating in Dubai to function in both free zones and onshore. The Deputy Director-General of the Department of Economic Development (DED) and the Executive Chairman and Chief Executive Officer of DMCC, signed the Memorandum of Understanding (MoU) introducing the Dual Licensing scheme to the DMCC companies, according to Gulf Today.

Under a DED license, the Dubai Multi Commodities Center companies will be able to facilitate trade in both the free zone and mainland Dubai.

“By signing this strategic collaboration agreement with the Department of Economic Development, we are not only promoting and facilitating trade but also offering businesses the flexibility they need to operate in a competitive marketplace,”

DMCC’s Executive Chairman and Chief Executive Officer- Ahmed Bin Sulayem was quoted as saying.

Also Read:

Dubai Free Zone Authority Plans for Single License for all Free Zones