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Abu Dhabi Dual License Initiative: What is it about?

Abu Dhabi Dual License initiative is a scheme of the Abu Dhabi Department of Economic Development to encourage companies in Free Zones to expand their operations in the onshore territory with a view to driving investment and growth across the Emirate. This article discusses the meaning, objectives, documents required, procedure, timeline, costs involved in issuing Dual License and the amendments introduced for smooth adoption of the initiative.   

What is Abu Dhabi Dual License Initiative?  

The Abu Dhabi Dual License Initiative was announced in 2018 Abu Dhabi Department of Economic Development. It aims to encourage companies headquartered in Abu Dhabi or established in one of its Free Zones to incorporate an onshore branch to increase foreign investments and drive economic development across the Emirate.

This license can be taken by the companies that are headquartered in Abu Dhabi and established the region’s Free Zones, including the Abu Dhabi Airport Free Zone, Twofour54, Abu Dhabi Global Markets, Khalifa Industrial Zone, and MASDAR.

Documents required to obtain Abu Dhabi Dual License Initiative

There are a number of documents that Free Zone Companies must submit to obtain an offshore license. The LLCs established in one of the Free Zones of Abu Dhabi will be eligible to obtain a dual license. The initiative also applies to entities registered as foreign branches in such free zones.

Following are the key documents required to obtain Abu Dhabi Dual License:

1. A No Objection Certificate (NOC) is issued by the respective Free Zone Authority.
2. An undertaking stating that the company has a branch office outside the Free Zone in Emirate.
3. Copy of the Parent Company’s Free Zone business License.

Procedure for obtaining the Abu Dhabi Dual License

The following 3 step procedure must be followed to obtain a dual license:

1. Initial approval: Once the above mentioned documents have been gathered, the application for the dual license must be submitted to get the initial approval.
2. Payment of prescribed fee: After getting the initial approval, the prescribed fees must be paid to initiate the printing of the license.
3. Get your dual license: After printing the license, the license is issued to the company.

Timeline for issuance of Abu Dhabi Dual License 

The timeline to obtain the dual license varies from company to company, depending on the type of activities the company is engaged in. According to the data issued by the Dept. of Economic Development, almost 90 per cent of the applicants receive their dual license immediately. The rest of the 10 per cent of companies carrying on commercial activities, which are relatively complicated and technical, take a bit more time because of additional approvals to be taken from the government.

Cost for obtaining Abu Dhabi Dual License 

The standard fee is applicable to obtaining a dual license for obtaining other permits. However, the fee may vary from company to company based on variable business activities carried out by such companies. Companies that are carrying on complicated activities and involve risks to human lives, then such companies are required to obtain a few more permits from the government, which increases the overall cost of obtaining the dual license. However, obtaining this dual license becomes cheaper because the companies are not required to spend on signboards and physical address, which reduces the cost of the license by 80 per cent.

Amendments to Cost for obtaining Abu Dhabi Dual License 

The government introduced some amendments to streamline the implementation of the dual license initiative. The amendments are as follows:

• Elimination of necessity to have additional branch address

Previously, opening a branch in Abu Dhabi’s Free Zone required a distinct address which called for a need to lease a separate office, thereby increasing the cost of an additional branch.

With the introduction of the dual license initiative, the necessity to have an additional branch address and nameplate was eliminated. This allows the branch office to operate from the same office as its parent company leading to huge cost savings for the parent company. 

• Elimination of appointing a local sponsor for registration of dual license

This initiative allows the parent company to act as a sponsor for the branch office, eliminating the need to appoint a local sponsor to register a dual license. Eliminating the need for having a local sponsor encourages foreign investment as it eliminates a lot of paperwork requirements associated with the appointment of a local sponsor. Additionally, the registration process is expedited as the requirements of local sponsor appointments are eliminated. Further, having substantial control over their company encourages them to make investments in the company.

• Appointment of a Branch Manager

Being an extension of the parent company, the dual license branch is not issued its establishment card or Ministry of Labour License, making it expedient for the parent company to hire employees. It has become mandatory for the parent company to appoint a branch manager who will hold a power of attorney to be able to act on behalf of the branch office.

Conclusion

The Abu Dhabi Dual License initiative is a part of the 50 billion dirhams stimulus package, which is initiated to catalyse the important engines of the economy, such as the private sector, SMEs and entrepreneurs^[1]. It is claimed that this initiative will improve the opportunities to carry out their business and further build the business’s capacities to partner and work with government agencies. In order to obtain consultancy regarding which type of company is suitable according to the kind of activities you wish to carry out, get on a call with incorporation experts at Enterslice.   

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