You are on page 1of 14

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.