Out-Law News 2 min. read
26 Sep 2011, 3:32 pm
Alan Wood of Pinsent Masons, the law firm behind Out-Law.com, said that the new law creates a "one stop shop" for businesses seeking the necessary licenses and approvals needed to operate in Dubai. The regime will be overseen by the Department of Economic Development (DED).
The changes will also clarify what companies who currently operate in the state's various Free Zones will have to do in order to be able to operate in the Dubai mainland. Free Zones are areas of economic priority which have a unique legal status. Companies operating in them are treated as if they operate outside of the UAE.
"This will be welcome since although the Companies Law has been clear on the subject for a number of years, the more relaxed stance the authorities have taken in terms of how the law is enforced has led to an erroneous belief by many that free zone companies are able to trade in the mainland as if they were registered in the mainland," Wood said.
The new regime allows businesses licensed to operate in the Free Zone to operate outside of these areas as long as this is agreed with both the DED and the Free Zone authorities. Businesses will also have to conform to local laws.
The new simplified system will "organise economic activities in the emirate to create an environment conducive to boosting investment," said Prime Minister Sheikh Mohammed bin Rashid Al Maktoum in a statement on his website.
Law No. 13 of 2011 establishes a single portal through which companies looking to carry out economic activity in the state outside of the Free Zone can apply for a license to do so from the DED. Under the current system a number of different government bodies, including the DED and the Dubai Municipality, have to provide approvals before a company can trade in Dubai outside of the Free Zones.
"Grouping responsibility for the various licensing and approval process aspects of establishing and operating in the Dubai mainland under a single roof should streamline the process and make doing business in Dubai easier and quicker," said Wood.
The DED will also regulate and manage inspections, intellectual property rights and consumer protection as well as taking charge of cases of consumer fraud. It will also manage a register of business names and licenses. A business owner will be able to request a temporary suspension of its license without paying any fine.
The new law creates a grievance process, allowing businesses to appeal against the DED's decisions. The Director-General of the DED will be able to form a committee to consider any complaints and must arrive at a decision within 30 days from the date of receiving the grievance.
"This law is a vital step in promoting economic growth and consolidating Dubai's position as one of the important commercial and economic centres internationally. The unification of the business registry will improve the UAE's rank internationally in terms of ease of doing business," said Mohammed Shael at DED.
