What is dual licensing and what are the benefits?

There has been a number of announcements from various UAE free zones in the last 18 months about the concept of dual licensing; but what is it and how can it benefit your UAE operation?

A dual licence allows a free zone registered company to apply for an onshore licence, authorising the company to conduct business activities outside the border of that free zone and without the need to acquire additional office premises.

Some potential benefits of having a dual licence include:

  1. Cost savings; including no requirement for office space in the mainland as well as the highly competitive costs involved in setting up the new entity
  2. The timeframe involved in establishing the onshore branch of the free zone company is usually quicker than establishing a new entity
  3. Improved business development capabilities, particularly where an onshore licence may be required to contract with particular government entities
  4. Reducing the risk of non-payment for onshore contracting
  5. UAE expansion as the presence of an onshore entity may allow you to obtain more visas.

The process of applying for a dual licence entity is similar to that of a branch of a foreign company, as you will need to appoint a local National Service Agent (NSA). The NSA will not be a shareholder of the onshore branch, but will act as a representative for the company, particularly in administrative and Labour & Immigration matters.

Holding a dual licence for your business can be a cost effective way to obtain an onshore trade licence, whilst also maintaining your free zone entity and the benefits associated with this.

If you are currently based in a free zone and are interesting in operating onshore, please get in touch with Wayne Merrick, Head of Corporate Solutions on wayne.merrick@linksgroup.com or +971 (0) 4 446 3900.

 

Article by Wayne Merrick on Oct 15th 2018