Home » FAQ » Business Set-up FAQ's » Does Abu Dhabi recognise a free zone trade license?

Yes, an FZ-LLC incorporated in DIC can open a branch in Dubai, elsewhere in the UAE or in other countries providing it complies with the requirements in those jurisdictions. An FZ-LLC operating in DIC can open a branch outside DIC, provided it fulfils the requirements of the intended external jurisdiction concerning the registration of branches. Law No. 1 of 2000 of the Emirate of Dubai is available for downloading on the DIC website. A business partner cannot sell goods on a commercial or retail basis in the free zone except, obviously, for actual retail tenants. A business partner may import plant and equipment for its own use in the free zone, but in the event those goods are sent from the free zone into Dubai generally, then import duty is payable on the value of those goods. To import goods into the UAE, the importer must be a duly licensed business in one of the Emirates. If a business partner wishes to import and "sell" products or equipment to a third party based in Dubai or elsewhere in the UAE, then such a third party would have to be the consignee on the shipping documents (Airway Bill / Bill of Lading). Business partners based in the TECOM Zone can certainly run their marketing and sales operations for the region from here and invoice from here. There are no direct restrictions on broadcasters regarding restrictive products, however, issues in relation to broadcast content will generally be determined under DMC's "Freedom of Expression" tribunal. Companies registered in the Free Zone do not have to register with the Dubai Economic Department ("DED") or the Dubai Municipality ("DM"). Owner Visas do not exist. All individuals resident in the UAE are sponsored as employees, regardless of shareholding. Abu Dhabi recognizes a TECOM trade license in the same way that it recognizes a trade license from a foreign jurisdiction. To operate physically in Abu Dhabi you would otherwise require compliance with Abu Dhabi Municipality regulations. Shareholders and Directors have no age limit for residence visas. It normally takes eight days from initial contact, for licensing and incorporation to be completed. However, this depends on submission of documents and payment of all relevant fees. The whole process of obtaining a residence permit usually takes 3 to 3 ½ weeks. A residency permit has to be renewed every three years. A shareholder is entitled to a residence visa under that business partner's trade license only if he is an employee of the company. These documents and letters would be charged for. There is no restriction as such on a FZ-LLLC opening a branch elsewhere. There are no financial, legal or tax implications for using a branch office of a foreign company over an FZ-LLC or vice-versa, while operating in the TECOM Free Zone. All businesses operating in the Free Zone benefit from the 50 year tax holiday granted under Article No 15 of Law No. 1 of 2000 irrespective of whether they are incorporated as an FZ-LLC or registered as a branch of a foreign company.

Please note that a branch of a foreign company incorporated in a high tax jurisdiction may still have to consolidate its profits with its parent company and pay tax on its profits in the country of incorporation of the parent.

Copyright Policies/Patent Laws are as per UAE Federal Law. TECOM business partners bringing plant and equipment in from overseas to the Free Zone for use by them in the TECOM Zone may import these goods into the UAE free from customs duty. This allowance is on the basis that the plant and equipment does not leave the TECOM Zone. If goods brought in by business partners to the TECOM Zone from overseas are subsequently "re-exported" to Dubai, then customs duty is payable on those goods at the time of re-export to Dubai. The 50 year "tax holiday" is guaranteed for businesses operating in the TECOM Zone provided by the Government of Dubai under Article 15 of Law No. 1 of 2000 of the Emirate of Dubai. International Arbitration refers to the dispute resolution system and service provided by the Free Zone for business partners in TECOM, in collaboration with the Chartered Institute of Arbitrators (London), a reputed international arbitration organisation. The age limit for residence visas is a minimum of 18 and a maximum of 60 years. Generally speaking, the "terms" of issuance of a trade license are payment of the relevant fees, payment of amounts owed under the lease and not undertaking activities outside those specified on the trade license. For an FZ-LLC to open a branch in another jurisdiction, the FZ-LLC needs to find out about and fulfil the requirements of that other jurisdiction concerning the registration of branches.

The Registration & Licensing Directorate at DIC can issue notarised copies of a FZ-LLC's constituent documentation and certificates indicating that the FZ-LLC is in good standing and fully paid up.

The use of the term "cyber laws" is misleading. With reference to E-Commerce, the only "cyber law" currently in operation is the Facilitation of Electronic Transactions Law being Law No. 2 of 2002 of the Emirate of Dubai. This has been issued by the Rulers Court and applies as a law in the Emirate of Dubai. It does not currently apply as a federal law in the rest of the UAE. As the Free Zone is part of the Emirate of Dubai, the Facilitation of Electronic Transactions Law applies in the Free Zone as well. The Broadcasting and Publication Standards Tribunal and the Codes of Guidance cover issues related to freedom of expression. Please click on the above links to view the documents. Copyrights and patents can be registered under the UAE Federal Law. Interested business partners should contact lawyers working in Dubai for further information. Trademarks and service markets may be registered under the UAE Federal Law. Interested business partners should contact lawyers working in Dubai for further information. The company itself issues the shares to its shareholders on incorporation. Shareholders on incorporation are usually referred to as "Subscribers" and under the Memorandum of Association of a FZ-LLC (effectively the constitution of the FZ-LLC) those named subscribers agree to take a certain amount of shares. Those shares are then known as "Issued" shares and the shareholder must pay the company for those shares. The higher cost of visas within the FZ is owed to the operational costs of the stream-lined application process the BPs benefit from. A trade license in the TECOM Zone is AED 15,000 for a variety of reasons. It is not directly relevant to compare this to the cost of a trade license issued in Dubai by the DED. For example, foreign nationals cannot generally "own" businesses in Dubai and must have a UAE national partner, sponsor or majority shareholder. Further, the cost of a trade license in Dubai varies considerably and AED 4,000 is about the cheapest and is only available for certain categories. Other categories of trade licenses cost much more than AED 15,000.