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  • DMCC Business Relief Package and Regulatory update to its Member Firm
Article:

DMCC Business Relief Package and Regulatory update to its Member Firm

28 April 2020

The Dubai Multi Commodity Centre(DMCC) Free Zone has recently offered business relief package and specific regulatory updates to its member firms, and we have briefly laid out these changes:

  • Stimulus Package - DMCC has provided various incentives to support the member firms in these uncertain times.
  • Economic Substance Reporting Update – DMCC has issued the ESR notification deadline as 30 June 2020.
  • Permits to operate in the mainland – DMCC in partnership with DED now allows its member firms holding specific service license categories to operate in the mainland by obtaining a permit.
  • New rules and regulations of DMCC Free Zone 2020 - As of 2 January 2020, the DMCC Authority has issued the DMCCA Company Regulations (CR2020) and the New Free Zone Rules.

As part of UAE’s effort to support in uncertain times, DMCC Free Zone has issued the below discounts to DMCC registered entities:

  • 100% waiver for late licence renewal penalties;
  • 100% waiver for all Flexi Desk and DMCC Business Centre penalties until the end of 2020;
  • 100% waiver of the Office Sharing Permit fee;
  • 100% waiver of the Company Reinstatement fees;
  • 30% discount on licence renewal;
  • Waiver of outdoor area rents for JLT retailers with existing contracts, where DMCC is the building owner/landlord;
  • Waiver of rent for 2 months for commercial establishments impacted by the latest Dubai Economy directive requiring a temporary closure, where DMCC is the building owner/landlord; and
  • A 3-month suspension of rent for Flexi Desk and DMCC Business Centre tenants renewals or monthly/quarterly instalment with no discount.
DMCC Announces Support Package for Business to Boost UAE’s Economic Resilience

DMCCA being the regulatory authority for DMCC Licensees has announced that each DMCC member company is to provide an annual declaration of whether they have conducted any Relevant Activities in the preceding financial year by latest 30th June, 2020.

Non-compliance could attract penalties ranging from AED 10,000 to AED 300,000. Ultimately, this could also result in the loss of the entity’s operating license and the loss of any double tax treaty benefits.

Economic Substance Reporting – Update to all DMCC Members

DMCC, in partnership with the Department of Economic Development (DED), effective 14 April 2020, introduced two new services that will help businesses grow:

DED NOC to Operate Onshore

DMCC member companies with specific licence activities are now allowed to offer their services outside Free Zone without having to obtain a trade licence from DED.

DMCC member companies can apply online for a no-objection certificate (NOC) from DMCC to obtain the permit from DED. This NOC will be required to obtain the Commercial Permit to operate onshore, from DED.

The NOC will be valid for 90 days from the date of issuance, and no documents are required to be submitted.

NOC to operate Onshore

Dual Licence Office Permit

DMCC member companies with a DED branch/ subsidiary or a DED company with a common shareholder can now operate from their JLT office.

Valid for one year, this permit will help businesses save the cost of leasing another office for the DED licence.

Dual Licence Office Permit

As of 2 January 2020, the DMCC Authority had issued the DMCCA Company Regulations (CR2020) and the New Free Zone Rules.

Salient features of the new regulations:

  • Provide the option to have different classes of shares;
  • Removes minimum capital requirements except in case of few activities;
  • Permits re-domiciliation of companies to and from the DMCC;
  • Introduces the concept of voluntary suspension of a license (Dormancy);
  • Prescribes latest standard Articles of Association to be adopted by existing companies to align with the New Regulations;
  • Allows the flexibility to make changes to the Articles of Association to reflect the shareholder requirements;
  • Introduces “Officer Rules” to address the roles and responsibilities for directors, manager and secretary;
  • Provides comprehensive provisions for regulating branches and issuance of an establishment certificate for new and existing branches;
  • Offers greater flexibility in conducting shareholder’s meetings;
  • Prescribes mandatory appointment of company secretary;
  • Mandates maintenance of company registers; and
  • Introduces different methods of winding up a company.

Mandatory amendments required by existing branches & companies

Companies registered and licensed prior to the effectivity of the new CR2020 must, within twenty-four months from the date the new Regulations come into force, amend its Articles to the extent that the provisions of its Articles are contrary to or inconsistent with the new CR2020.

DMCC Increases Ease of Doing Business through New Rules and Regulations

If you would like to find out more about the above, please contact Shivendra Jha and/or Shamsuddeen A K.