A recent article in Emirates 247 highlighted the need for correct licensing when operating in Dubai.
Mohammed Shael Al Saadi, Chief Executive Officer of Business Registration & Licensing (BRL) Sector, DED was quoted as saying: “Under no circumstances can a free zone company in Dubai operate outside its jurisdiction unless it has a branch licensed by DED. The same applies to companies in any free zone in the UAE. Alternatively, such companies may appoint an intermediary to sell their products or services in Dubai, but the intermediary should have a DED license,”
At The Links Group, we have been stressing the importance of correct licensing for a decade for a very simple reason: if your company is operating outside its permitted jurisdiction it can fined or be closed down by the Dubai government.
Many people looking to start a business, or register an overseas company, in the UAE opt for a Free Zone company because 100% foreign ownership is allowed and there are perceptions that the rules for onshore company ownership are altogether more complicated with a requirement for a 51% local ‘sponsor’. The reality, however, is that through a professional corporate sponsor like The Links Group 100% foreign ownership onshore is possible via a number of different regulated & correct licence options. An onshore business licence, enables your company to deal directly both with onshore companies/customers and those in the Free Zones too.
Mr Al Saadi also stated in the article: “Recently, we have been receiving complaints from various Free Zone companies, most of them operating outside Dubai, that their licensors had promised they can do business in Dubai under the free zone license. We have clarified to them that there is an established route to doing business in Dubai,”
If you know someone operating under a Free Zone license in Dubai who is dealing with clients who are established onshore (with a Department of Economic Development license), please put them in touch with us. We are happy to answer any questions they may have. Business owners face enough commercial risks in starting & operating a company, so why add to that with unnecessary exposure to regulatory and legal hazards that can be avoided?