We’ve all heard of the UAE’s famous, and highly coveted, 10-year golden visa for individuals. Now a business version of this may be in the works: It has been reported that the country is considering introducing a 10-year golden and a five-year silver licence “at competitive prices”, which would do away with the need for annual licence renewals.
A Dubai trade licence currently costs roughly somewhere between AED15,000 and 50,000 and is valid for one year, although this could vary depending on which free zone a business is operating in.
Every year businesses must renew their licence: pay a fee, have a registration certificate from the land department, provide photocopy of passports for all business partners, and get the necessary authorisation and approval letters.
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If the business is in the free zone they may also need to show ‘No Objection Certificate’ and a ‘Certificate of Continuity of Existence or Good Standing’.
Some reports stated a delay in filing a trade licence renewal can lead to a penalty, a ban to the business licence, or freezing of all business activities.
The government has already been working to make the process of getting a business licence easy - for example, Dubai offers an ‘instant licence’ that is issued within five minutes for activities that do not need external approvals.
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In recent years it has also dropped the requirement for every business to have a local Emirati partner, and has launched an initiative to simplify employee residency and work permit procedures in private sector companies as it looks to stay regionally competitive with neighbours like Saudi Arabia.
Offering long-term licences could go many steps further in adding to Dubai’s ease of business.
The proposal to introduce new commercial licence regulations was discussed by the Economic Integration Committee during its second meeting of the year under the chairmanship of the Minister of Economy Abdulla bin Touq in March.
While it is uncertain when exactly the new five- and 10-year licences will come into effect, their aim is clear: the government said in a statement it hopes to boost government revenue, stimulate business activities, and foster sustainable growth and prosperity in the country.
According to Gulf News, certain sectors and industries may be granted these longer-term licences based on their strategic importance or contribution to the UAE’s economic diversification objectives, such as its Vision2031 initiative (enhancing the position of the UAE as an attractive and influential economic hub) or its aim to be an environmental-friendly economy. It is expected that the proposed licenses will be subject to widespread availability, if companies meet the criteria, similar to that of the golden visa for individuals, the report added.
Experts are describing the potential move as a game-changer.
Dubai-based business lawyer Kamal Jabbar told Business Recorder that “the opening up of a long-term visa aligns with Dubai’s vision for attracting and retaining talent, encouraging investment and maintaining stability.”
Achraf Drid, CEO for the MENA at broker XTB, echoed these thoughts when he said the move “stands to significantly benefit Dubai by cementing its status as a prime investment destination.”
For one, it will contribute to the ease of doing business in Dubai by minimising bureaucratic procedures and providing operational certainty which will further bolster Dubai’s reputation for business-friendly practices, he told Business Recorder.
He said the initiative could also help attract more foreign capital, as investors are drawn to the stability that a golden licence provides. “Such stability is conducive to making substantial, long-term investments in the local economy.”
He added that the scheme will also play a crucial role in attracting and retaining global firms, which is crucial for driving innovation and maintaining Dubai’s competitive edge in the global market.
“Overall, this will support Dubai’s strategic economic goals, including its vision to be a leading city for investment and talent by 2033, ensuring continued growth and development as a global business hub.”
Raheel Ahmed, group CEO of RAKBank, said in an interview with Khaleej Times that “the more longevity you have, the more you can be sure that you have sustainability of your business model.”
Speaking about small businesses in particular, he said the licence will give them more flexibility in operating “without the threat that they have to close down the business and leave and face consequences. People will see a lot of positivity in it.”
Hisham Al Gurg, chief executive of the Seed Group and the Private Office of Sheikh Saeed bin Ahmed, told The National: “If the proposed long-term commercial licences come into play, it will not only add to the confidence of businesses in the Emirates but it will also empower the start-up community from around the world – the ones who are looking to make the UAE their new permanent base.”
“One of the major concerns of SMEs and start-ups is business continuity and that’s what the UAE government is serious to address. The move will infuse much-needed confidence and will subsequently add to the FDI inflows to the economy,” he added.
Meanwhile Gareth Jones, CEO of Dubai-based Start Business Advisory, said in a post on LinkedIn that the new licences would mean “less time and resources spent on administrative tasks and more on strategic growth and development.”
“This would make life so much easier for many, imagine, no need to visit the DED (Department of Economic Development) every year, or have to deal with all that paperwork every year? I can’t wait!”
Copyright Business Recorder, 2024