Formation Requirements and Procedure: DMCC incorporation requirements Dubai
Established in 2002, the Dubai Multi Commodities Center (the DMCC incorporation requirements Dubai) is the largest and fastest growing Free Zone within the United Arab Emirates, as well as the region, and currently comprises of over ten thousand companies ranging from small start-ups to large corporations spanning various fields and industries. This newsletter provides a general overview of the procedure and requirements in relation to the incorporation of a company providing management/business consultancy services (the “Company”) in the DMCC in Dubai, United Arab Emirates. The publication also outlines the estimated total costs and approximate time frame for the incorporation and set-up of the Company.
INCORPORATION PROCESS OF A MANAGEMENT/BUSINESS CONSULTANCY
The incorporation process for the Company is divided into three stages: the Pre-Approval Stage, the Registration Stage, and the Licensing Stage.
The Pre-Approval Stage
In order to incorporate the Company, the Company must first obtain a pre-approval from the DMCC by submitting a Pre-Approval (name reservation) Form to the DMCC. The purpose of the form is to reserve the name of the Company, and enables the DMCC to carry out due diligence on the individuals involved with the Company. The Pre-Approval Stage and name reservation takes approximately five to seven business days.
Once the Pre-Approval Stage is completed, the Registration Stage commences, during which time all relevant documents should be submitted to the DMCC within six (6) weeks of receiving the name reservation.
The Licensing Stage is the final stage of incorporation. There are three types of licenses provided by the DMCC incorporation requirements Dubai depending upon the intended activities to be carried out by a company applying for a DMCC license: Trading License; Service License; or Industrial License. At this stage, the Company must also enter into a tenancy contract (as described below) and this must be submitted to the DMCC.
Once this stage is completed, the Company shall receive a “Service License,” which shall allow the Company to carry out the following activities as defined by the DMCC, including: internal policy formulation; organizational restructuring; strategic plan developments; and innovating work procedures.
Signing of Tenancy Contract and Office Space
Once submitted, it takes an additional ten to twelve business days to receive the Service License along with other constitutional documents of the Company from the DMCC incorporation requirements Dubai.
In order to get a license from the DMCC, the Company must set up its office within the area known as Jumeirah Lakes Towers (“JLT”), which is where the DMCC is located (the Company will not be able to acquire office space in any other area in Dubai if it wishes to operate under the DMCC license). JLT provides office space for DMCC companies for either sale or rent. These offices can either be “fitted” with ceilings, floorings, and partitions, or can be a “shell and core” (i.e., empty) condition. Additionally, there are “flexi desk” options that the Company may avail of as well.
Opening of Bank Account
Before the expiry of the Provisional Approval and Bank Account Opening Letter, the Company should open a bank account(s). Once the account(s) are opened, the share capital should be deposited and the letter request from the bank confirming the share capital is deposited should be submitted to the DMCC. The minimum share capital for the Company is, at the date of this publication, AED 50,000 per company; this share capital needs to be deposited in the bank account within three weeks from the date of the license being issued.
Although it a general requirement that the signed tenancy agreement and the bank letter should be submitted in order for the Service License of the Company to be issued, the DMCC will occasionally issue the license based on the tenancy contract and a share capital request undertaking letter, in the event that the bank account process takes time to be finalized.
IMMEDIATE STEPS TO BE TAKEN POST INCORPORATION
Standard documents to be submitted
Within thirty days of receiving the Service License, the following documents are required to be submitted to the DMCC incorporation requirements Dubai:
- Original stamped specimen letterhead;
- Company seal/stamp;
- Shares Certificates;
- Personnel Secondment Agreement; and
- Original letter of appointing auditors.
The Company would also need to submit visa applications for its employees. Visas for the Company are issued based upon the area of the office (i.e. the size of the office space), for example, one visa will be issued per ten square meter of office space.
ESTIMATED COST FOR THE SETUP OF THE COMPANY
The estimated costs for the set out of a Company under the DMCC as of the date of this publication is as follows:
- Pre-approval: AED 1,000 (one-time charge);
- Registration: AED 9,010 (one-time charge);
- License: approximately AED 20,010, depending on the activities conducted by the Company (annual fee);
- Memorandum of Association: AED 2,010 (one-time charge); and
- Residence Visa: AED 3,300 (payable every three years)plus AED 3,000 (refundable deposit).
Please note that these fees and costs are subject to regulatory change.
lecocqassociate arabia dmcc specializes in the incorporation and structuring of financial and non-financial institutions with cost efficient solutions. It regularly advises and assists clients in attaining various licenses.
This newsletter is for information purposes only. It does not constitute professional advice or an opinion. Please contact us for any questions.