Why and How to Start a Business in DMCC (Dubai Multi Commodities Centre)?
April 25, 2022
Deciding on a free zone to establish a business in Dubai is not as easy as choosing Dubai itself. How can it be when you have more than 25 free zones, each one sounding better than the next, to choose from for your one-and-only business! But now that Dubai Multi Commodities Centre (called DMCC for ease) is attracting you more than any other free zone in Dubai, you would want to be sure whether your decision of selecting the free zone is right? We absolutely understand your dilemma and that’s why today we are going to address all your doubts through some snippets of information crucial to know before setting up a DMCC-licenced company in Dubai.
Best thing since sliced bread, DMCC came into existence in 2002 as a government entity with an aim to enhance commodity trade flows through Dubai. Duly incorporated by virtue of Law No. 4 of 2001, issued in the Emirate of Dubai, Dubai Multi Commodities Centre Authority or DMCC is a Free Zone Authority offering the largest premise in the UAE to do business in opulence. In the crowd of free zones, DMCC stands out like stilettos in a room full of flats! Thanks to the all good things of life, DMCC features, giving the business owners plenty of room to add to the creature comforts that come standard. Whether it is the government-declared “50-Year-long-Tax-Free” status for all DMCC-registered entities or innovative office solutions ranging from single units to multi-storey occupancy or the lucrative benefit packages the free zone has to offer, DMCC, from beginning to end, is a treat for all your senses. Recent achievements of DMCC include the launch of the Middle East’s first Google for Entrepreneurs Global Tech Hub with AstroLabs Dubai. DMCC supports commodity trading through organizations such as the Dubai Diamond Exchange (DDE), the Dubai Pearl Exchanges (DPE), DMCC Tradeflow, the Dubai Good Delivery Standard (DGD) for Gold, the DMCC Tea Centre and the DMCC Coffee Centre. DMCC offers financial products as well. These include Dubai Commodity Asset Management (DCAM), Dubai Shariah Asset Management (DSAM), and the Dubai Gold & Commodities Exchange (DGCX).
Why set up business in DMCC?
DMCC, 7 times winner of ‘Global Free Zone of the Year’ Award by the Financial Times fDi magazine! Why should you set up your business in any other free zone of Dubai when you can in DMCC, the world’s number 1 free zone and centre of global commodities trading? One of the most highly-rated spots for free zone business setup in Dubai, DMCC hits the right chord with entrepreneurs the world over. And the reasons are endless! Studded in the heart of Dubai, DMCC offers everything one wants to live, work and thrive in the city of the future, smack dab at the centre of the Jumeirah Lakes Towers district. Boasting a flamboyant community, ingenious infrastructure, world-class services and an incredible choice of properties, all minutes from outstanding air, sea and road links to the world, DMCC is indeed “made of trade”! An unparalleled combination of Free Zone status, state-of-the-art commercial and residential property and top-tier commodities and financial services, puts DMCC in a class of its own. What tops the cake is the ongoing investment in the most interconnected, innovative infrastructure and leading business services, making trading from here an easy breeze! Efficiently, effortlessly, anywhere in the world. Some other reasons why most entrepreneurs choose DMCC for their dream company include appreciably less red tape in DMCC free zone company formation, easy-speedy companyregistration process and most procedures being in English & bilingual (English/Arabic) company documents. If the speed of business setup is important to you, DMCC is the best bet as you can form a company here just within a matter of one week (depending on the shareholding structure tho). Home to 20,000+ businesses, including brokers, banks, commodities exchanges, business support firms and professional services companies, DMCC is the place to be if you are looking to make your business meet the world while hitting the ball out of the park.
A DMCC company is a legal entity established under the rules and regulations of the DMCC. A DMCC company is regulated by its own Memorandum and Articles of Association (with the exception of Branches) and is authorised to carry out only those business activities for which it has acquired a valid Commercial Licence from DMCC. Each DMCC company must have at least one shareholder and a minimum mandated share capital, with the exception of a Branch company, which shall have no shareholders and hence, no share capital.
Individual: Owned by single or multiple shareholders that are natural persons
Joint Venture: A joint venture is a company owned by a combination of individual(s) [i.e. natural person(s)] and company(ies) or owned by more than one company.
Subsidiary: A subsidiary is an entity owned 100% by another company (“Parent”). The subsidiary company may perform different business activities than its Parent and may have a different company name. It is worth noting that a subsidiary is defined differently for accounting purposes.
A branch is legally part and extension of its parent company and does not have a legal identity distinct from its parent company. In practice, a branch is selected if a parent company wishes to set up a new office in a new location for an existing company, carrying out some or all of the business activities of the parent. The liabilities and assets of the branch are not distinct from the parent company. The name of the branch and its activities must be the same as the parent company. A branch does not have its own Memorandum and Articles of Association. A holding company cannot set up a branch at DMCC; however, it can own shares in a new company.
A limited liability company is treated as an entity separate from its shareholders. Therefore, the liabilities of a company do not extend to its shareholders. Generally, the liability of shareholders is limited to the amount of unpaid share capital. Nonetheless, under DMCC regulations, all share capital is required to be paid up (i.e., deposited in the company’s bank account).
Operating Name: The name under which the company operates its business that may differ from its registered name. Since an operating name is not regarded as a legal name, the company is not permitted to open a bank account or make any legal transactions under its operating name.
Types of Licence in DMCC
Currently, there are three types of licences to be able to trade from DMCC.
Trade Licence: To conduct trading activities as specified in the Licence.
Industrial Licence: To practice light manufacturing activities as stipulated in the Licence.
It’s the nature of your business, along with activities, that tells which type of licence you need for your DMCC company. In order to obtain any one of the three trade licences, you might be required to receive additional approvals or a No Objection Certificate (NOC) from external bodies, as there are numerous activities that are regulated by third-party authorities. For instance, Ras Al Khaimah’s new division regulates gaming activities in the region or if you want to incorporate a health clinic in DMCC Free Zone, you have to get approval from the Dubai Health Authority as well.
The applicant must meet the following requirements in order to acquire a DMCC business licence:
Have a valid DMCC Administration business registration
Must not clash with any part of the DMCC Rules and any other laws, rules, and regulations applicable in Dubai and sections of the UAE federal legislation
A caveat: DMCC licence comes with a validity of at least 12 months. The licence holder must renew the existing licence at least 30 days before the expiration date to avoid unpleasant consequences such as a tariff penalty and the permanent revocation of the licence, refusal to meet the application for DMCC licence renewal, or termination of a company’s DMCC registration
DMCC Licence Activities
While most of the free zones in the UAE are ‘themed’ allowing particular activities that are in line with the zone’s specific theme only like Dubai Healthcare City and Dubai Internet City, there are some like JAFJAH and DMCC that offer a broad and comprehensive list of licenced trading and services activities. The DMCC Free Zone, fittingly, is known for dispensing licences to conduct core commodity trading activities i.e., raw materials such as Gold & Precious Metals, Diamonds, Pearls, Plastics, Energy, Oil, Iron, Steel & Base Metals, Chemicals, Food, Textiles, Cotton, etc. Petroleum & crude oil-based products and FMCG goods such as tea, coffee, spices, and many others can also be traded under the relevant DMCC licence. The huge list of DMCC-approved activities also includes crypto-based business activities.
Benefits of Company Formation in DMCC
The world is already your oyster with a free zone company, and when it’s DMCC, you have struck gold! From agro, energy and financial services to diamonds, gold and base metals – more than 20,000 businesses from diverse industries and sectors call DMCC home. And the reasons are all “benefits”! Equipped to give you the whole nine yards, DMCC landscape is decked up with tons of possibilities to help you grow and take your business to notches above. It is important to thoroughly understand your options before deciding to form a company in DMCC. Home to world-class amenities and infrastructure, DMCC is the most popular free zone in Dubai, UAE amongst entrepreneurs, and it’s easy to see why. Company Formation in DMCC is highly beneficial for the investors as they get to start a company in one of the world’s liveliest cities, get easy access to the wide business networks in Dubai, tap a growing expat population with new products and services, and more. Below are some of the advantages that come with a business setup in DMCC.
Licences for a complete range of business activities
No foreign exchange controls or barriers to entry
Unique Worldwide Centre Industry Clustering
Prime strategic business location of global significance
Efficient Licencing & Registration procedure
Availability of freehold offices for sale and lease at competitive rates. Flexible office solutions to rent, hire or lease fitting whatever accommodation requirements one has for their company setup in DMCC
Advantageous freight rates
Rapidly-growing all-inclusive free zone in the UAE and GCC
If you’re not sold on the perks of forming and running in DMCC free zone, know that DMCC the procedure to set up a DMCC company is quick and straightforward. Just four steps and voilà! Your business is set in motion! Let’s see what are they.
How to Start a Business in DMCC?
Unlike many other free zones in the UAE, the business setup procedure in DMCC is pretty simple and straightforward! Just 7-10 working days are enough for company registration! And the joy of the joys is – you don’t have to physically be there in DMCC, the process can be completed remotely through their online portal. The investors or entrepreneurs have to pay only the incorporation fee, which is one of the lowest in Dubai, and wait for the DMCC Authority to issue the company’s certificate of registration.
Step 1: Outline the desired business activities
First and foremost, evaluate the nature of your business to figure out which trade licence covers the activities you are planning to conduct from DMCC. Find out what documents you require and calculate the costs involved in the process using the cost calculator available on the DMCC portal. You can start the online application from your unique portal account provided by DMCC’s representative on your request.
Step 2: Apply electronically
Populate the application form correctly, pay the initial application fee (i.e., AED 1,035) and submit it online. The company name reservation, management and compliance approval is all completed by DMCC.
Step 3: Pay, Sign & Submit the relevant documents
After submission of your initial application, it’s time to pay the registration and licence fees and sign the legal documents. You will be then granted by DMCC a provisional approval and bank letter (to open a company bank account). Company setup can be done from anywhere in the world with our fully digital setup process. Easily start your business in Dubai without having to visit DMCC.
Step 4: Choose the most suitable office solution
Lastly, pick a workplace out of so many choices available at your disposal that suits your big or small business and submit the required documents for the chosen office premises duly signed by you. DMCC will dispense your E-Licence, DMCC.
Additionally, you may also apply for more than one licences or for a general trading licence. Entities that do distinct operations in the DMCC free zone can acquire a ‘Dual Licence’ onshore, as well, which enables them to have an onshore Department of Economic Development (DED) licence in addition to their free zone licence. To acquire the permit to operate onshore, the establishment is required to approach the DED with the DMCC’s NOC while adhering to all of the terms & conditions laid out by DED.
Documents for DMCC-licenced company setup
Online pre-approval application form
Proof of residential address in country of residence (Say, a utility bill or bank statement)
Business plan (depends on activities)
Third-party approvals for specific regulated business activities
Details of an office address in DMCC free zone (JLT)
Required if setting up a subsidiary
Copy of your passport (Along with your UAE residence visa and a copy of your Emirates’ ID, if applicable)
Power of Attorney for Manager, Secretary, Director, Specimen Signature
NOC from the current sponsor if you already have a residence visa
DMCC Licence & Other Fees
The table below will give you a closer look at the major costs you will encounter while establishing a business in DMCC.
Articles of Association (AoA)
AED 20,285 annual fee*
*Price depends on activity
AED 1,825 annual fee
DMCC Free Zone licences come with 1, 2 and 3-year validity. Licence with a 2 years validity period comes with a 5% discount on the total licence fee and 3 years validity period comes with a 10% discount on the total licence fee.
1 Year Residence Visa – from AED 2,237* 2 Year Residence Visa – from AED 2,462* 3 Year Residence Visa – from AED 3,360*
The number of visas a company has the right to apply depends on the size of the selected office: Flexi-desk – up to 3 visas; Serviced Office – 4 or 5 visas Physical Space: 1 visa for every 9 square metres
Share Capital Required
Minimum AED 50,000 per company
The share capital must be deposited in the company’s bank account in the UAE within 6 months from the issue date of the company’s licence. It can be withdrawn anytime thereafter.
DMCC Free Zone Visas
DMCC has nothing to do with the UAE Ministry of Labour. Each free zone authority has its employment law and the provisions set out in the employment contract are in line with labour law. Individuals working on free zone visas are strictly prohibited to work outside the free zone (i.e., onshore) as they do not have an entire UAE labour contract. Furthermore, every DMCC-licenced company qualifies for four visa types: Employment visa, Dependents’ Resident visa, Partner / Investor Visa (that also includes Business Visit visa) and Student visit visa (university & institution).
DMCC Business Setup Packages
Company incorporation in DMCC Free Zone is one of the most preferred amongst foreign investors due to the stature of the Free Zone, tons of approved business activities catering to investor requirements and business facilities and a variety of impressive business setup packages (Hello savings!) to boot. Whether you’re a one-man-band, a small start-up, mid-size or large corporate, DMCC has a business package for everyone. And trendy office solutions gild the lily! Choose one that squarely fits into your needs. From plug-and-play Flexi-desks, co-working space and serviced offices to multi-storey offices for lease/sale and custom-build solutions or a plot of land for bigger requirements. Head over to know the business packages DMCC has to offer you:
Jump Start Package
Start-ups, SMEs & entrepreneurs
For 1 year: AED 43,780 For 2 years: AED 81,881 For 3 years: AED 120,000
Prime Plus Package
Medium & large companies
JLT Resident Package
Basic Biz Package
Although, you may check out the DMCC cost calculator that gives you clarity on MCC-related charges as well as other ancillary services that you’re likely to need during the course, you still might need a one-stop-shop business setup company in Dubai that can help you make hard decisions in the blink of any eye. You may always approach Adam Global Dubai, one of the top business advisors in Dubai to find out which business package is most suitable for you to set up a company in DMCC. Our specialized team of qualified business consultants is happy to navigate you through all difficult decisions from selecting the best location for business formation to opting for the best “benefit package” that is time-saving and cost-effective too.
Meet Your DMCC Company Setup Expert?
Let’s face it! An entrepreneur’s life, as a rule, is not all cakes and ale! They have to juggle a lot of things while setting up a business, no matter where. It’s easy to get lost in the shuffle with so much research work, paperwork and legwork to do. But the good news is the burden can be offloaded by hiring one of the best business setup advisors in Dubai such as Adam Global. The leading business advisory company is a treasure trove of experiences in every aspect of business you can think of. Adam Global Dubai facilitates a wide range of pre- and post-business setup services such as licencing, company amendments & NOCs in addition to trademark registration, VAT & corporate tax preparation (in case you have a dual licence) and admin works, so, you have more time to concentrate on what’s most important to your company. Get ready to lap up the dankest of the dank services at your one-stop-shop with your first-time free consultancy with our business setup expert. Call us now!