DMCC: Expanding the Scope of a Service License
  • By Danielle Lobo, Saurbh Kothari and Omer Bakri, 4 May 2020

     
    Corporate and Commercial

     

    DMCC to issue NOCs to operate onshore
    A DMCC licensed company holding a valid service license (with one or more of the Eligible Service Activities (identified below)) can apply to the DMCC for a no objection certificate (NOC) to operate/conduct business onshore (i.e. in mainland Dubai outside of the boundaries of the DMCC free zone).
    The NOC, in itself, is not sufficient to operate onshore. The applicant company will also be required to obtain a permit from the local licensing authority (i.e. the Dubai Department of Economic Development (DED)).
    In order to obtain an NOC from the DMCC, the applicant company will need to apply through the DMCC portal. If the applicant company has a sanction on its DMCC portal account or has an application (service request) pending (for services such as the amendment of its licensed activities), it will not be able to apply for the NOC.
    Once an NOC has been issued by the DMCC, the applicant company will be required to approach the DED for a permit to operate onshore. The DED will issue a permit provided the applicant company has satisfied the DED’s requirements.
    Requirements of the DED 
    Based on an NOC issued by DMCC, the DED will issue a permit to the applicant company for conducting business onshore. The activity which the applicant company wishes to conduct onshore must be mentioned on its license (issued by DMCC) and such an activity(ies) must be one or more of the Eligible Service Activities. In order to obtain a permit, the applicant company is neither required to lease any separate office space onshore in Dubai nor is it required to appoint a UAE national service agent or partner.
    The DED permit shall be valid for the duration of the applicant company’s DMCC license.
    The DED will charge a fee of AED 5,070 for issuing its permit.
    Eligible Service Activities
    Accounting & Bookkeeping
    Events Management
    Cargo Loading & Unloading Services
    Cost Control & Risk Management Services
    Cyber Security Consultancy
    Data Entry Services
    Documents Destroying Services
    Electronic Chips Programming
    Exhibition Organising
    Facilities Management Services
    Facilities Resources Planning Consultancy
    Feasibility Studies Consultancies
    Performing Arts & Music Festivals
    Financial Instruments Quotation Services
    Fine Arts Consultancies
    Food & Dairy Consultant
    Health Planning Consultancies
    Information Technology Consultants
    Internet Consultancy
    Logistics Consultancy
    Management Consultancies
    Marketing Research & Consultancies
    Media Studies & Consultancies
    Network Consultancies
    Noise Control, Vibration & Acoustics Consultancy
    Pharmaceutical Consultancies
    Public Networking Services
    Quality & Standardisation Consultants
    Science & Technology Consultancy
    Sourcing & Procurement Consultant
    Spa & Fitness Clubs Consultant
    Technical Installations Consultancies
    Current Market Practice
    Rule 3.2.11 of the DMCC Licensing Rules (effective date 2 January 2020) states as follows:
    “A DMCC Entity must conduct its business in or from the DMCC Free Zone in order to maintain an active License. If a DMCC Entity has any business or operations outside of the DMCC Free Zone, it must have obtained the required acknowledgement letter from the Registrar and approvals from any other relevant UAE Governmental Authority to do so.”
    The market practice has been that a free zone company can have customers located outside of the free zone as long as the said free zone company is providing its services from the geographical area of the free zone. However, there is no clear definition of whether something constitutes having “any business or operations outside of the DMCC Free Zone” so consequently there is no “bright line” test.
    It would appear that many of the Eligible Service Activities can be conducted from the geographical area of the free zone. However, should a DMCC company consider that its current operations may constitute it doing business outside of the DMCC free zone or if it wishes to operate onshore and it is licensed for an Eligible Service Activity, it should consider applying for the relevant NOCs. ■
    * * * *
    Afridi & Angell’s corporate department works with many DMCC company clients and has extensive experience in advising such clients. Should you have any questions with respect to obtaining the relevant approvals to conduct business onshore, please contact the authors or your usual Afridi & Angell contact.

    DMCC to issue NOCs to operate onshore

     

    A DMCC licensed company holding a valid service license (with one or more of the Eligible Service Activities (identified below)) can apply to the DMCC for a no objection certificate (NOC) to operate/conduct business onshore (i.e. in mainland Dubai outside of the boundaries of the DMCC free zone).

    The NOC, in itself, is not sufficient to operate onshore. The applicant company will also be required to obtain a permit from the local licensing authority (i.e. the Dubai Department of Economic Development (DED)).

    In order to obtain an NOC from the DMCC, the applicant company will need to apply through the DMCC portal. If the applicant company has a sanction on its DMCC portal account or has an application (service request) pending (for services such as the amendment of its licensed activities), it will not be able to apply for the NOC.

    Once an NOC has been issued by the DMCC, the applicant company will be required to approach the DED for a permit to operate onshore. The DED will issue a permit provided the applicant company has satisfied the DED’s requirements.

     

    Requirements of the DED 

     

    Based on an NOC issued by DMCC, the DED will issue a permit to the applicant company for conducting business onshore. The activity which the applicant company wishes to conduct onshore must be mentioned on its license (issued by DMCC) and such an activity(ies) must be one or more of the Eligible Service Activities. In order to obtain a permit, the applicant company is neither required to lease any separate office space onshore in Dubai nor is it required to appoint a UAE national service agent or partner.

    The DED permit shall be valid for the duration of the applicant company’s DMCC license.

    The DED will charge a fee of AED 5,070 for issuing its permit.

     

    Eligible Service Activities

    Accounting & Bookkeeping

    Events Management

    Cargo Loading & Unloading Services

    Cost Control & Risk Management Services

    Cyber Security Consultancy

    Data Entry Services

    Documents Destroying Services

    Electronic Chips Programming

    Exhibition Organising

    Facilities Management Services

    Facilities Resources Planning Consultancy

    Feasibility Studies Consultancies

    Performing Arts & Music Festivals

    Financial Instruments Quotation Services

    Fine Arts Consultancies

    Food & Dairy Consultant

    Health Planning Consultancies

    Information Technology Consultants

    Internet Consultancy

    Logistics Consultancy

    Management Consultancies

    Marketing Research & Consultancies

    Media Studies & Consultancies

    Network Consultancies

    Noise Control, Vibration & Acoustics Consultancy

    Pharmaceutical Consultancies

    Public Networking Services

    Quality & Standardisation Consultants

    Science & Technology Consultancy

    Sourcing & Procurement Consultant

    Spa & Fitness Clubs Consultant

    Technical Installations Consultancies

     

    Current Market Practice

     

    Rule 3.2.11 of the DMCC Licensing Rules (effective date 2 January 2020) states as follows:

    A DMCC Entity must conduct its business in or from the DMCC Free Zone in order to maintain an active License. If a DMCC Entity has any business or operations outside of the DMCC Free Zone, it must have obtained the required acknowledgement letter from the Registrar and approvals from any other relevant UAE Governmental Authority to do so.”

    The market practice has been that a free zone company can have customers located outside of the free zone as long as the said free zone company is providing its services from the geographical area of the free zone. However, there is no clear definition of whether something constitutes having “any business or operations outside of the DMCC Free Zone” so consequently there is no “bright line” test.

    It would appear that many of the Eligible Service Activities can be conducted from the geographical area of the free zone. However, should a DMCC company consider that its current operations may constitute it doing business outside of the DMCC free zone or if it wishes to operate onshore and it is licensed for an Eligible Service Activity, it should consider applying for the relevant NOCs. ■

     

    * * * *

     

    Afridi & Angell’s corporate department works with many DMCC company clients and has extensive experience in advising such clients. Should you have any questions with respect to obtaining the relevant approvals to conduct business onshore, please contact the authors or your usual Afridi & Angell contact.

     

     
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