Setting up a business in a free zone in Dubai will soon become much easier and easy on the pocket!
The members of the Dubai Free Zones Council (DFZ Council) have reached a preliminary agreement whereby companies operating in a free zone can operate in other free zones in Dubai without the need for a separate licence.
At the DFZ Council's 12th meeting the "One Free Zone Passport Initiative" was agreed which would allow companies to operate in multiple free zones with one licence.
According to the Commercial Companies Law (Law No. 2 of 2015) ("the CCL") a foreign investor can own only up to 49% of the shares in limited liability companies registered in mainland Dubai. As opposed to this, Free Zones permit 100% ownership opportunities for foreign investors.
The Foreign Direct Investment Law (Federal Law no. 19 of 2018) ("the FDI Law") which was issued last year has outlined a framework which will permit foreign shareholders to own up to 100% of shares in companies within the mainland in certain economic sectors. Even though the Positive List containing the list of economic sectors and activities that will be available for Foreign Investors is yet to be issued, this could be seen as a possible reason to introduce new initiatives and incentives to invite more business into the free zones.
The One Free Zone Passport initiative will hopefully be an easier and economical way to operate across the many free zones in Dubai. We certainly believe that this initiative by the DFZ Council will be one of the many more incentives and proposals that are yet to be announced by the authorities to attract more companies into the free zones.
However, more details about the "single licence" initiative are yet to be announced. Watch this space for more information about the possible restrictions, costs, requirements & any other details about the One Free Zone Passport initiative!
Originally published 19 June 2019
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