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Who is DMCC?

DMCC, a strategic initiative of the Government of Dubai, was established in


2002, with a mandate to provide the physical, market and financial infrastructure
required to set up a commodities market place in Dubai. DMCC offers a unique
opportunity for market participants in a wide range of commodities industries in
four broad sectors including precious commodities (gold, diamonds, coloured
stones and pearls), energy related sectors, steel and base metals and soft
agricultural commodities (tea, cotton and others). The Centre aims to attract key
players throughout the entire value chain of each of these commodity sectors,
together with a range of support industries such as finance, logistics, consulting
and insurance. DMCC was the first UAE free zone authority to offer freehold
business premises, in addition to all other standard free zone services. These
comprise a 50-year holiday on personal and income taxes, full foreign ownership
of business and a one-stop shop facility for processing of all documentation
including immigration and licensing needs.

Are DMCC and JLT two separate Free Zones?

Until January 2014, the DMCC Authority offered two types of licenses: DMCC
and JLT. DMCC Free Zone companies operate in the commodities and related
sectors, while JLT Free Zone companies operate across non-commodities
related sectors. From February 2014, the authority licenses all activities under
the one DMCC license. All companies previously licensed under the JLT license
will progressively transfer to a DMCC license.

BENEFITS OF FREE ZONE COMPANIES

What is a Free Zone?

A Free Zone or Free Trade Zone or Free Economic Zone, is a designated


geographical area where certain taxes or restrictions on business, employment
or trade do not apply in the same manner that they apply to the country in which
the zone is located. An area within which goods might land, handled,
manufactured or reconfigured, and re-exported without the intervention of the
customs authorities. Only when the goods move to consumers within the country
in which the zone is located do they become subject to the prevailing customs
duties. Free Zones are often organised around major seaports, international
airports, and national frontiers — areas with many geographic advantages for
trade.

What are the main benefits of setting up a Free Zone company with DMCC?

In summary, DMCC Free Zone companies enjoy 0% corporate and personal tax
for 50 years, 100% foreign ownership, simple set up process, assistance with
sponsorship of employees and many other UAE government related services,
which incorporate a wide range of affordable property choices.
Is there any corporate/income tax applied to the companies or to the
individuals?

There is no corporate/income tax on individuals or companies operating in the


Free Zone. This applies for 50 years from the time of registration of the company.

Do I need a UAE Partner to form a company?

One of the many advantages of setting up a company in DMCC is that it offers


100% foreign ownership. You do not need a UAE Partner to form a company at
DMCC unless your business is a pharmacy. In this instance, the Dubai Health
Authority requires a UAE National shareholder in order to issue the required No
Objection Certificate (NOC).

Do I need to visit different government departments and ministries in order


to form a company?

No, the DMCC Service Centre offers you a comprehensive set of solutions
allowing you to license and set up your business quickly and efficiently in the
DMCC Free Zone. Services ranging from registering the trade name, licensing
the company, visa applications, Emirates ID typing, real estate, insurance, IT,
telecom, interior, and other services are all strategically located at the first floor of
Almas tower.

What kind of activities are allowed in the DMCC?

With DMCC, you can choose from over 600 business activities. These range
across 20 sectors that include Energy, Commodities, Gold and Diamonds,
Technology, Construction, FMCG, Healthcare, Aviation, Shipping, Education and
Media, as well as services such as Professional, Financial, Personal and
Community. For further details, please refer to the DMCC Allowed Activity List
here.

Can a trading and service activity be on the same license?

No, they have to be on two different licenses. All trading activities will be grouped
under one Trading License and all service activities will be grouped under one
Service License.

How many activities can I have under one license?

Within each license type (Trading, Service or Industrial), up to six business


activities in the same Division (activity code beginning with the same first two
digits i.e. 50xx-xx) can be included in the standard annual license fee. Additional
fees will apply when adding activities from a different Division. (Please refer to
Costs Section)

Can I add an activity after my license is issued, what should I apply for?
Yes, you can.
In case you wish to add an activity from the same license type (adding a trading
activity on your trading license), then you can apply for ‘Change of Activity’
through your DMCC Member Portal. For further details, please refer to the How-
To-Guides under Managing a Company on DMCC website www.dmcc.ae.
In case you wish to add an activity from a different license type (adding a service
activity while holding a trading license), this will be considered as an additional
license, hence, you will need to apply for a new Service License through your
DMCC Member Portal. For further details, please refer to the How-To-Guides
under Managing a Company on DMCC website www.dmcc.ae.

If I have a Free Zone company, can I do business outside the Free Zone?

Yes, your company may conduct business outside of the UAE without restriction,
provided it is legal. If you wish to trade within the UAE (known as “Onshore”)
there are two main methods for doing so. The first one is to trade directly with an
LLC company that has an import/export license. As part of the terms of trade,
they would need to clear any goods through customs. Secondly, you may enter
into an agreement with a logistics company that would clear the goods and
deliver them to the mainland. For services companies wishing to provide services
to a company outside the free zone, the general rule is that the services must be
provided within the Free zone. There are certain exceptions, such as recruitment
services where stricter rules apply.

Are there any activities that would require special approvals?

Yes, there are a number of activities that are regulated by third party authorities
where a No Objection Certificate (NOC) is required in order to add such activity
on DMCC license. For example, In order to open a Clinic in DMCC Free Zone,
an approval from the Dubai Health Authority is required.

Do business activities require specific property type(s)?

Yes, while most activities do not require a particular property type (Flexi Desk,
Service Office, Physical Office or Retail Space), certain activities require a
specific property type such as a physical office space or retail space. Please
check the Property Type requirement related to your selected activity when
searching for or selecting activities on DMCC Member Portal. For further details,
please refer to the DMCC Allowed Activity List on www.dmcc.ae under the How-
To Guides webpage.

Are there any additional property requirements related to additional


licenses?

Yes, having more than one license will require additional property arrangements,
which depends on the property type designated to the selected business activity.
Such as additional physical office space that should maintain a minimum of 50
square meters per license, additional Service Office per license, or additional
Flexi Desk per license.

Is a business plan required for all business activities?

Not all activities require a business plan. Please check the Business Plan
requirement related to your selected activity when searching for or selecting
activities on DMCC Member Portal. For further details, please refer to the DMCC
Allowed Activity List on www.dmcc.ae under the How-To-Guides webpage.

As a Branch Company, can we add any activity that we wish?

A Branch Company can indulge in the activities that the parent company is
currently performing provided these activities are available in DMCC.

Does DMCC require a specific Business Plan format?

No, DMCC does not require any specific format for business plan. A typical
business plan should include details of the business, its operating activities and
regions, SWOT and financial analysis.

How can we reserve the name of the company?

You will be asked on your online initial application to provide three preferred
company names. DMCC will always aim to reserve your first choice and will
ensure that there are no other companies with the same name or a name similar
enough to be indistinguishable. Please be aware that there are certain words that
may not be used and these are clearly mentioned on the application. The name
of all new companies will end in DMCC. Please note that branch companies will
always adopt the name of the parent company followed by the suffix ‘DMCC
Branch’.

I have decided to form a company in DMCC. Whom should I contact next?

Congratulations on your decision. You are among a large and growing group of
entrepreneurs and business people who have chosen DMCC as their preferred
destination to do business. To continue the process please: 1) Complete the
online form
2) Call the DMCC Call Centre at 800 3622 or +9714 4249600
3) Email us on setup@dmcc.ae
4) Visit our New Company Set Up Counter number 13 at Level 1, Almas Tower,
Jumeirah Lakes Towers

How many days will it take to set up a company?

As soon as the necessary documents have been submitted online, your company
can be set up within two to three weeks. In the interest of maintaining DMCC
Free Zone’s reputation as the place for good business, DMCC conducts due
diligence reviews as part of all company setup procedures. In a limited number of
cases, DMCC reserves the right to refuse to set up a company and the applicant
will be informed.

I currently have a company in another UAE Free Zone, can I transfer that to
DMCC?

No, you cannot transfer a company or license from any Free Zone to another;
you will need to set up as a new company. However, we can aim to give you the
same company name and activity. Please contact our Member Services Team to
discuss further.

What is the Ideas Platform for Members and how can I submit my Ideas?

Find answers to all your questions related to the Ideas platform here; such as who can submit Ideas, how to
submit on the member portal, the number of Ideas that a company can submit and more.

What is the process for hand-carry imports?

Hand-carried rough diamond shipments must be submitted together with their


original KP certificates to the respective customs authorities on arrival at any
UAE port. The passenger carrying the rough diamond shipment will be given a
copy of the ‘Passenger Baggage Receipt’ by the customs authority, who will then
attach a copy of this receipt to the shipment prior to the transfer of the goods to
the UAE KP Office. Upon completion of the routine inspection and verification
procedures by the UAE KP Office, the passenger must then submit documents
including a copy of their passport, their ticket details and their baggage invoice,
along with the original KP certificate and a copy of their import invoice in order to
clear the diamond shipment.

If I import rough diamonds set into jewellery do I need a KPCS?

No, once rough diamonds are set into Jewellery they are considered as such.

Can I import a rough diamond into UAE and export it to a GCC country?

No, UAE is the only country to introduce and operate KP compliance in the GCC.

Do I require a Kimberley Process Certificate for semi-polished diamonds?

Yes, semi-polished diamonds fall under the KPCS and require certification.

Do I have to declare all rough diamonds at customs whatever the


destination?

Yes, it is mandatory to declare hand carried rough diamonds at customs


whatever the destination.
Can Free Zone Companies import and export goods?

Yes, Free Zone companies can import goods as per the below general
guidelines:

1. Only Free Zone licensed companies holding trading licenses are allowed
to import goods.
2. Goods must be in conformity with the activity of the licensed company;
except in the case of the company importing goods for its own use such
as furniture, and equipment for their office operations. It will be allowed,
however, those companies must keep a record of all items that have been
brought into the Free Zone, as Dubai Customs will need to see that those
items have not been, later, transferred to the mainland without payment of
the customs duties.
3. The importer must obtain a valid importer code from Dubai Customs.
4. Dubai Customs issue two types of Import/Export Codes which are ‘Free
Zone Code’ and ‘Onshore Code’.
5. The Free Zone code allows only the import and re-export to other
countries and hence goods are not allowed to enter the mainland unless
they are cleared through a limited liability trading company or a logistics
provider.
6. DMCC companies have an exception to obtain an ‘Onshore Code’ for
Gold and Diamond Trading only.

Do I need to pay Customs duty to bring the goods to DMCC?

Free Zone licensees can import goods or equipment into the Free Zone from a
foreign country without payment of customs duties. While Free Zones are
physically within the borders of the UAE, they are outside the customs borders.
Customs duty is only paid when goods are moved out of the Free Zone; that is,
imported into the UAE. Numerous warehousing facilities are available in the port
for companies that wish to store and re-export their goods. A deposit is payable
to the full value of the customs duty, which is refunded on re-export. DMCC
recommends that its members contact Dubai Customs to ensure they are
completely familiar with all requirements. It is important to ensure that customs
records are kept in good order otherwise penalties may apply. Please
visit www.dubaicustoms.gov.ae and go to the Free Zone section under
Declaration and Clearance.

What can I import?

Generally, Free Zone companies may import goods that are consistent with their
commercial license. The main exception to this is when a company wishes to
import goods for their own use, say furniture, and equipment for their office
operations. This is allowed, however it is important for those companies to keep
good records of all items that have been brought into the Free Zone, as customs
will need to see that those items have not been, later, transferred to the mainland
without payment of customs duties. It is important to ensure your company is fully
compliant.

Can I sell goods in the local market?

You can sell goods in the local market through a distributor. A Free Zone
company may not directly retail goods to the local market.

What import and export duty applies to goods?

The Customs duty for most items is calculated on the CIF value at the rate of 5%.
Imports of liquor/alcohol are subject to a 50% customs duty on their CIF value
while imports of tobacco products draw a 100% duty on their CIF value. Many
essential items are duty free such as staple foodstuffs and pharmaceuticals. Gold
and diamond traders benefit from a special arrangement between Dubai
Customs and DMCC. Diamonds may be imported at a rate of 1% service fee,
and gold is imported at a rate of 0.32% service fee, both payable to Dubai
Customs. Due to the changing nature of customs, it is always advisable to refer
to www.dubaicustoms.gov.ae, wherein the duties applicable are available
according to HS codes.

How easy it is to market / exhibit our products in Dubai?

The UAE has a growing economy with demonstrable political stability. The Dubai
Government has invested significantly in developing a robust framework for
foreign direct investment. Moreover, DMCC actively works with member
companies, creating opportunities for business, through industry networks and
clubs. Dubai World Trade Centre hosts a vast programme of exhibitions and
conferences that are attended by global industry leaders.

What documents do customs need to see?

The documents required by customs may include goods declaration, bill of


lading, certificate of origin and invoice copies. However, other documents may be
required. As customs requirements may change from time to time, we advise you
to visit the Dubai Customs web site for the most up to date
information. www.dubaicustoms.gov.ae

What are HS codes?

The Harmonised System Codes (HS Code) is a standard issued by the World
Customs Organization (WCO) to unify the classification of the goods. These are
six digit codes for identifying different products across the world. For example the
code for natural pearls is structured as follows: Section XIV: Natural or cultured
pearls, precious or semi-precious stones, precious metals, metals clad with
precious metal, and articles thereof; imitation jewellery; coin. Chapter 71: Natural
or cultured pearls, precious stones, precious metals, metals clad with precious
metal, and article thereof; imitation jewellery, coin. Heading 71.01 Pearls, natural
or cultured, whether or not worked or graded but not strung, mounted or set;
pearls, natural or cultured, temporarily strung for convenience of transport. Code
7101.10 Natural pearls. A full record of HS codes is available through Dubai
Customs.

Does DMCC have a Port of its own?

No, however, Jumeirah Lakes Towers is located within 10 km of the main Jebel
Ali port, one of the largest ports in the world.

What is the Kimberley Process?

The Kimberley Process is an international certification scheme that regulates


trade in rough diamonds. It aims to prevent the flow of conflict diamonds and
protect legitimate rough diamond trade. The Kimberley Process Certification
Scheme (KPCS) outlines the rules that govern the trade in rough diamonds.
The KPCS has developed a set of minimum requirements that each participant
must meet. The KP is not, strictly speaking, an international organisation: it has
no permanent offices or permanent staff. It relies on the contributions – under the
principle of ‘burden-sharing’ – of participants, supported by industry and civil
society observers. Neither can the KP be considered as an international
agreement from a legal perspective, as it is implemented through the national
legislations of its participants.

Do synthetic diamonds need a KP Certificate?

No, synthetic diamonds do not require a Kimberley Process Certificate; only


rough diamonds require a Kimberley Process Certificate.

Do I need a registered UAE company to trade in rough diamonds here?

Yes, to trade in rough diamonds in the UAE you will need to register a company
here with attendant trade license related to jewellery, gold, pearls, diamonds, or
general trading. However, an individual who wishes to bring rough diamonds into
the country can do so only once under his/her name.

What are conflict diamonds?

Conflict diamonds, also known as blood diamonds, are rough diamonds used by
rebel movements or their allies to finance armed conflicts aimed at undermining
legitimate governments.

How can I be absolutely sure I am not buying a conflict diamond?


You can only be sure by buying jewellery from a reputable, professional retailer.
All Diamond Guild members are committed to eliminating trade in conflict
diamonds and, as such, have put in place an auditable means by which they can
prove all diamonds sold comply with the World Diamond Council Kimberley
Process.

KPCS CERTIFICATES / SYSTEM OF WARRANTIES

How does the System of Warranties work?

The diamond industry also adopted a System of Warranties to further assure


consumers of provinence. A written statement must accompany all sales invoices
guaranteeing the diamonds or jewellery are from legitimate sources. Diamond
traders and diamond jewellery manufacturers are required to keep records for
annual audit.

LICENSE RENEWAL

Are you looking for information on renewing your license?

Find answers to all your questions related to license renewal such as the tenancy
contract, Annual Operation Fitness Certificate, Third party liability insurance,
workmen’s compensation and more at www.dmcc.ae/license-renewal-faqs.pdf.

MEDIATION SERVICES

What is mediation?

Mediation is a voluntary and flexible form of dispute resolution in which a neutral


third party assists parties to work towards a negotiated settlement of their
dispute. The parties retain control of the decision on whether or not to settle and
on what terms.

What are the advantages of mediation?

Mediation provides a private forum in which the parties can gain a better
understanding of each other's positions and work together to explore options for
resolution. It often narrows the issues in dispute very quickly and whilst it does
not always result in settlement, it is a highly successful method of ending
disputes. Most importantly, in case of settlement between the parties, it avoids
the significant time and expense of formal court proceedings.

Does mediation mean that I cannot take my claim to court?

No, mediation is a consensual, optional process and a party can end its
participation in a mediation whenever it chooses to, and for any reason.
Mediation does not prevent a party taking its claim to court at any time unless the
parties have settled their claims and have agreed that the matters between them
are resolved.

Who can attend a mediation?

The parties themselves should attend the mediation. However, the parties may
choose to bring along another person to act in a supportive capacity if they feel it
would be helpful. In the case of a party that is a company, its representative
must have authority to negotiate a settlement at the mediation.

What is the role of the mediator?

The mediator will act as an impartial facilitator to assist the parties with their
negotiations. It is not the mediator's role to tell the parties what their rights are, or
how they should resolve the dispute, and he or she does not have authority to
impose any binding decision on the parties.
Unlike a judge or arbitrator, the mediator will not decide the case on its merits,
but will work to facilitate agreement between the parties. The mediator will also
ensure that all parties understand and agree to the terms of any settlement
reached.

What should the parties do to prepare for a mediation?

The dispute is more likely to be resolved when the parties are well prepared.
Parties should review the documents relevant to the dispute in advance of the
mediation and be clear as to where they stand on each of the issues. It is also
important to provide documents to DMCC Disputes Centre ahead of the
mediation so that the mediator can prepare for the mediation.

What happens at a typical mediation?

The mediator will review the documents provided to him or her in advance of the
mediation to identify the key issues. The mediator conducting the mediation will
greet the parties, provide an overview of the process and his or her role, and will
invite each party to give its perspective on the dispute and highlight points of
particular concern. The mediator will then try to facilitate the parties in negotiating
a settlement, and in doing so may have private discussions with each party. The
mediator may also suggest a further meeting with the parties if he or she
considers it appropriate (for example, if one party needs further time to consider
a particular issue).
If, at any time, a party considers that a settlement is unlikely to, or cannot, be
achieved, that party may withdraw from the procedure and seek alternative
means of resolution, such as court action.

TYPES OF LICENSES

What Types of Licenses Does DMCC Issue?


The types of licenses offered at DMCC are
Trade License: To carry out trading activities as specified in the License
Service License: To carry out service activities as specified in the License
Industrial License: To carry out light manufacturing activities as specified in the
License

Can I apply for two separate licenses under one company name?

Yes, this is possible depending on the satisfaction of the conditions of the


licenses. In some cases, where a company wishes to conduct several activities
that are similar in nature the authority allows unlimited activities to be conducted
under one license. However, if the activities are unrelated, separate licenses are
required. DMCC offers a General Trading License that allows a client to trade
from a paper clip right up to an airplane. The products and categories that are
covered under General Trading are defined by Customs and are subject to
change based on Customs requirements. There are certain product
classifications that are not covered under General Trading License, including
Defence Equipment / Military, Gold and Gold Jewellery, Diamonds and Diamond
Jewellery and Tobacco and Tobacco Products. We recommend you speak to
one of our expert Member Services Executives who will advise you further.