Once the decision is made to establish an entity in a free zone
of the United Arab Emirates ("UAE"), the investor has to
choose the most suitable free zone for the business endeavour.
Apart from the cost of the actual business set up,
considerations regarding the location of the free zone, the
licensability of the preferred business activities, the
availability of office and storage space as well as the efficiency
of the free zone authority play a vital role in the selection
One free zone which is frequently selected by investors from
different industry sectors is the Dubai Multi Commodities Centre
DMCC is located along Sheikh Zayed Road in the district Jumeirah
Lakes Towers ("JLT") which is in close vicinity to Dubai
Marina and The Palm Jumeirah. Hence, these new areas of Dubai as
well as Abu Dhabi are within easy reach.
2. Business Activities
When licensing free zone companies, DMCC closely follows the
activity catalogue of the Dubai Department of Economic Development.
With very few exceptions, for example manufacturing activities,
almost all lines of business are licensable in DMCC.
DMCC currently stands alone in offering a company the
possibility to hold two different licenses. This administrative
practice proves to be advantageous as it enables the free zone
company to combine various activities in one legal entity alone
instead of establishing two separate corporate bodies, for instance
one for trading and one for consultancy services.
3. Office Solutions & Warehouse Space
DMCC offers various office solutions. Investors may either
choose offices in variable sizes and stages of fit-out or rent
workplaces in the DMCC Business Centre on an hourly basis.
Furthermore, offices within JLT cannot only be rented from DMCC
directly, but also from external landlords.
As JLT is a so-called freehold area in which, apart from UAE
nationals, all persons regardless of their nationality as well as
certain legal entities are permitted to own property, it is
possible to both rent and buy real estate in JLT.
Although warehouse space is not available in DMCC, DMCC may
permit that small parts of the office are used for storage
The annual fees per license amount to AED 20,000 which is rather
costly in comparison to other free zones.
However, a financial benefit can result from the fact that,
aside from DMCC, a variety of other landlords is available so that
the rent for the free zone company's office space is freely
Furthermore, DMCC requires a lump sum of only AED 3,000 as
deposit per employment visa whereas it is customary in several
other free zones to charge an amount of one and a half monthly
(basic) salaries as well as the cost for a one-way-ticket to the
employee's home country.
5. Free Zone Authority
In the last couple of years, the collaboration with DMCC was
occasionally complicated resulting in applications for business set
ups and residence visas to take some time, thus, trying the
patience of the parties involved. With the implementation of the
web-based DMCC Free Zone Member Portal in spring 2014 - through
which all applications are initiated and processed - the
cooperation with DMCC has improved considerably. Procedures have
been simplified and designed more transparently which significantly
shorten the duration of the individual approval steps. The online
portal can even be considered as one of the most efficient and user
friendly in the UAE at the moment.
Due to its options for business set up and office premises, its
location and internal administrative structure, DMCC has evolved
into a free zone that creates an attractive business environment
for investors. Thus, it may be worthwhile to consider DMCC when
choosing a suitable free zone.
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