Key Changes to DMCCA Rules and Regulations 2024: What Businesses Need to Know
The Dubai Multi Commodities Centre (DMCC) has long been a booming and promising hub for businesses that want growth and opportunity. DMCC hosts numerous annual events—trade fairs, seminars, and networking opportunities—that foster collaboration and promote sustainability in business practices. Whether one is a budding entrepreneur or already an established brand, DMCC presents a business environment ripe for success. It is one of the UAE’s leading free zones with over 24,000 companies spanning different sectors, including finance, logistics, e-commerce, and many more.
DMCC operates under its own regulatory authority which ensures that processes for business setup and operations are simplified and efficient. It offers business incentives and appealing proposals for businesses of all sizes, including 100% foreign ownership which attracts a lot of international investors and companies, significant tax advantages, including a 0% personal income tax rate, which means you can keep what you earn. Proven by its exceptional track record, including being awarded the Global Free Zone of the Year for the ninth time, DMCC has been important in strengthening Dubai’s economic market.
DMCC rules and regulations have always been committed to continuous improvement, regularly revising its mandates to elevate its service offerings. This dedication to improvement not only empowers businesses within the free zone but also cultivates a lively and engaged community where innovation thrives.
Overview of DMCCA
The United Arab Emirates is home to over 40 distinct free zones. These free zones are self- contained zones that operate under their own regulations and with dedicated authorities to oversee their business compliance and operations. Established in 2002 and operating under Law No. (3) of 2022 (as amended), Dubai Multi Commodities Centre Authority (DMCCA) presides over the DMCC free zone.
DMCCA has always been committed to keeping its regulations up-to-date with the market trends. It is important to note that when there is a newly issued DMCCA company rules and regulations, then those directives must be adhered to by all parties and businesses involved.
Last October 10th 2024, DMCCA issued new updates for company regulations. These recent updates show the ongoing effort of authorities to enhance business experiences and support companies looking to grow. The changes also aim to widen business opportunities and simplify operation procedures, ultimately improving the zone’s competitiveness in today’s fast-paced world.
DMCCA Rules and Regulations 2024 key updates
1. New License Opportunities from DMCCA
New types of licenses were recently introduced by DMCCA to enhance business flexibility within the free zone. The new licenses introduced are below:
- Special Purpose Vehicles (SPV) – This new licensing category allows businesses to structure their corporate groups more effectively as per their needs and manage activities without being imposed on additional requirements typical companies face. The simplified operational structure is one of the advantages of SPV as they are not obliged to appoint a company secretary or hold general meetings. This significantly reduces administrative burdens. Additionally, SPVs do not need to lease office space within the DMCC; they simply must maintain a registered office address. SPVs are particularly beneficial for holding assets such as obtaining and/or funding of a project, intellectual property, or real estate.
- Freelance Licenses – Under the updated DMCCA company regulations, individuals can now apply for freelance licenses. This allows individuals to run their own businesses while working from home and setting their own schedules. This new initiative authorizes freelancers to operate legally while enjoying the freedom of being their own boss, not needing an employment contract. A variety of freelance activities are now covered under this license, including e-commerce ventures like selling perfumes and sportswear, as well as creative professions such as authors, copywriters, influencers, content creators, interior designers, graphic designers, web developers, personal trainers, and more. This move not only supports entrepreneurship but also fosters a dynamic and diverse freelance community within the DMCC.
- Holding Company License– With the updated DMCCA rules and regulations, companies are now allowed to apply for a holding company license which allows them to oversee the operational processes of their subsidiaries without getting stuck in daily decision-making or production activities. Holding companies is particularly beneficial for large enterprises with multiple business units and various product lines. They serve as a central head office, making strategic decisions for their subsidiaries, while those subsidiaries handle the day-to-day operations. Businesses with this type of license can effectively structure their corporate framework, enhancing efficiency and allowing companies to focus on broader strategic goals.
- Single Family Offices and Multi-family Offices – DMCCA company regulations 2024 has rolled out new regulations for Family Offices, allowing the formation of both Single-Family Offices (SFOs) and Multi-Family Offices (MFOs). A Single-Family Office (SFO) is related to managing the wealth of one or a single family, while a Multi-Family Office (MFO) provides similar services but for multiple families. Both types of offices offer non-regulated and non- financial services, including business management, technology support, administrative services, and concierge services. However, neither is allowed to offer financial services. Applicants must hold a minimum of USD 1 million in investable or liquid assets to obtain an SFO license. Additionally, its shareholders, beneficiaries, and directors must be family members related to the family being served. MFOs on the other hand do not have a minimum asset requirement but must secure written approval from DMCCA for each family they intend to serve. Entities applying for either an SFO or MFO license must comply with DMCC’s licensing rules as non-compliance will result in sanctions or revocation of licenses.
2. Currency Account Options at DMCC
Under the previous DMCCA company rules and regulations, companies were required to register their share capital exclusively in UAE dirhams. Now, that has been changed as businesses gain the alternative to denominate their share capital in other currencies approved by the DMCC Registrar. Greater flexibility especially for international companies that operate across various jurisdictions or have dealings in foreign markets is what this new option offers.
Additionally, clients can now open bank accounts in multiple currencies, both within the UAE and internationally. This expanded capability provides businesses with other options to manage their finances effectively and adapt to a global market.
3. Streamlined Direct Capital Deposit
Previous DMCCA company regulations required companies to divide their share capital into shares denominated in UAE dirhams and deposit this capital in cash or kind through a bank account. To simplify this process and minimize delays, DMCCA updated company regulation allows companies to instead deposit their share capital directly via the DMCC Member Portal.
Notably, the new regulation also eliminates the bank deposit requirement for companies with a share capital of AED 50,000 or less. Instead, companies can deposit their funds directly in the DMCC portal during incorporation allowing them to use their funds immediately for various services such as licensing, registration, and visas which reduces delays and provides an even more efficient
and smooth experience. A Certificate of Share Capital Deposit can be requested from the DMCCA if a company deposits its share capital in the DMCC website.
4. Updated Articles of Association (AOA) Template
To improve understanding and help companies comply better with the latest DMCCA company regulations, the Articles of Association (AOA) template has been revised. The updated template presents a new glossary section that includes essential terms, making it easier for businesses to grasp the current rules and requirements. This move aspires to ensure that companies have the tools they need to navigate their governance effectively.
5. Lowered Age Requirement for Company Officers
DMCCA has updated its regulations to lower the minimum age for directors. In the new updated DMCCA company regulations, the minimum age for an individual to be appointed as director, secretary, or manager is reduced from 21 to 18 years old which provides greater flexibility for businesses in appointing senior positions. DMCCA is allowing innovation to be fostered as they encourage the next generation of business leaders to take more senior positions. This opens up new opportunities for young entrepreneurs to take on leadership roles within their companies.
Support and Resources
It is crucial that your business stay updated on the latest DMCC rules and regulations. Staying updated guarantees that your business avoids falling behind and stumbling on any legal violations. Non-compliance can always lead to sanctions and penalties, causing you to divert your focus away from growing your business.
Regulations will change as authorities continually assess what is best for the economy’s future and steer things for the better. While adjustments can happen quickly, it is important to recognize that change often leads to improvement and growth. Therefore, it is important to remain vigilant as authorities are strict about compliance.
Make it a habit to regularly check websites that provide updates on business regulations and current updates on DMCCA company regulations. One thing that can help you stay informed about the latest regulations is when you subscribe to the DMCC website and other government agencies. You can find the full text of the revised regulations and rules on their website.
If you need further help, you can also always reach out to a team of professionals who can support you not just in the short term, but also for the long haul. Partnering with experts will help ensure you remain updated and compliant with any changes in UAE regulations.
We’re Here to Support Your Business Growth
At Excellence, our team of professionals will help you grow your business while also ensuring that you comply with any changes in DMCC rules and regulations. We are authorized by the Department of Economic Development and approved by the Ministry of Economy for professional services. We are also an accredited partner of the DMCC authority, proudly serving as a trusted VAT Advisor in DMCC VAT Clinics.
Our team of professionals has an in-depth understanding of DMCC legislation, guidelines, and advisories which allow us to give you the best support that your business needs. Our team consists of corporate tax accountants, experienced business consultants, auditors, and more—all ready to alleviate your concerns amid the rapidly changing business landscape. Whether you’re starting a business in DMCC, another free zone, or the mainland, the Excellence team is here to guide you. We don’t just offer company formation services or accountancy services; we provide everything you need to maintain and grow your business effectively.
