Out-Law Guide 5 min. read
03 Dec 2009, 4:29 pm
This guide was written in November 2009.
The market for IT products and services in the United Arab Emirates (UAE) was worth approximately US$3.1 billion in 2008. It is no surprise, therefore, that the majority of global players in the IT market have already established a presence in the UAE and others continue to look to do so.
The obvious choice of location for information technology companies looking to locate in the UAE is in the regional hub of Dubai and more particularly within Dubai Internet City.
See also: Doing business in the United Arab Emirates: key considerations, an OUT-LAW Guide
Dubai Internet City (DIC) is an information technology park set up by the government of Dubai as an economic free zone and a strategic base for information technology companies targeting regional emerging markets.
DIC is one of three initiatives making up the Dubai Technology and Media Free Zone, the others being Dubai Media City (for media-related companies) and Knowledge Village (for academic institutes and training centres).
The benefits of locating within Dubai Internet City include the following:
DIC will license both businesses and individuals to carry out certain categories of activities within DIC. The licence categories permitted in DIC are as follows:
Each licence category is then further broken down into segments for Consultancy, Developer, Solution Provider, Customer Service or Support Service Provider activities. Companies must obtain a licence for a particular segment within their chosen licence category.
Companies looking to establish in DIC have the following options:
FZ-LLCs can be owned by a single individual or corporate shareholder or by up to 50 individual or corporate shareholders. DIC currently prescribes a minimum share capital for a FZ-LLC of AED 50,000 and a minimum share value of AED 1,000. Branch offices do not have any capitalisation requirements.
Companies located in DIC will be subject to all of the laws of the UAE along with any specific legislation or regulations which apply in DIC.
DIC currently has its own laws in relation to licensing, dispute resolution and employment issues.
DIC is considered to be an offshore area which is separate from the mainland UAE. Strictly speaking therefore, companies located within DIC are only permitted to trade within DIC and not within the UAE generally unless specific consent is obtained from the relevant authorities.
In practice however, most, if not all, companies located in DIC trade with and contract freely with companies located outside the free zone and the UAE authorities do not, at present, actively police the companies' activities in such regard.
A step-by-step guide to the process and documents required to obtain a licence and establish in DIC is set out below:
Applicants must initially submit the following:
DIC will review the application and may request additional information or clarifications.
Upon approval a Provisional Approval Letter is sent to the applicant along with a checklist of legal documents required.
The applicant must sign and stamp the Provisional Approval letter and submit this to DIC.
The applicant must submit the following legal documents within 15 working days of acceptance of the Provisional Approval Letter:
If the applicant is a corporate body:
If the applicant is a branch of a foreign company or of a UAE company:
If the applicant is an individual:
Upon the submission of all required legal documents DIC will assess whether the required office space is available and if so will send to the applicant a Customer Confirmation Letter.
The applicant should sign and stamp the Customer Confirmation Letter and return it to DIC.
Once the signed Customer Confirmation Letter is received DIC will issue an invoice for the licence and registration fees plus 34% of the total annual lease rental.
Upon receipt of the initial payment DIC will issue the Lease Agreement for office space and the Personnel Sponsorship Agreement.
Once the signed lease and Personnel Sponsorship Agreement are received, DIC will issue a trade licence and the company can begin trading.
After issuing the trade licence DIC will issue and invoice for the outstanding amount of the total annual lease rental to be paid in two instalments:
If you have any further queries about setting up your company in Dubai Internet City, or elsewhere, then please contact one of the following in our Dubai office: