DMCC FREE ZONE RULES & REGULATIONS, 3 rd EDITION AT A GLANCE

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1 DMCC FREE ZONE RULES & REGULATIONS, 3 rd EDITION AT A GLANCE This document sets out to summarise the main Free Zone Rules and Regulations applicable within the DMCC Free Zone. You are recommended to read the full edition of the Free Zone Rules and Regulations which can always be obtained online at It is the duty of any person or entity operating within the DMCC Free Zone to check for updates to the Regulations and any notices. DMCC bears no responsibility in connection with the representations made in this summary document. [ ] numbers in brackets refer to the clause number in the regulations. Ignorantia juris non excusat Ignorance is not an excuse DMCC FREE ZONE RULES & REGULATIONS, 3 rd EDITION AT A GLANCE... 1 GOVERNANCE OF FREE ZONE [3]... 1 GENERAL RULES [4]... 2 FREE ZONE LICENSES [5]... 2 CANCELLATION, REVOCATION OR SUSPENSION OF LICENSE [6]... 3 FREE ZONE FREEHOLDS AND LEASES [7]... 3 TERMINATION OF A DMCC LEASE [8]... 3 BUILDING AND OPERATION CONTROLS [9]... 3 INSPECTION OF PREMISES [10]... 3 INSURANCE [11]... 4 EMPLOYMENT AFFAIRS [12]... 4 EMPLOYER/EMPLOYEE RELATIONSHIP [13]... 5 TRAFFIC AFFAIRS [14]... 5 HEALTH, SAFETY AND ENVIRONMENT [15]... 6 VIOLATION OF REGULATIONS [17]... 6 DISPUTE RESOLUTION [18]... 6 MISCELLANEOUS [19]... 6 GOVERNANCE OF FREE ZONE [3] The Free Zone is managed and governed by DMCCA [3.1]. DMCCA may elect to cede jurisdiction on certain matters to a Relevant Authority [3.5g], and in practise this includes the requirement for approval by 3 rd party authorities, which is detailed at 1

2 GENERAL RULES [4] All entities or persons working, operating, living, owning or leasing real estate or carrying out a business are subject to and must comply with the FZ Rules and Regulations [4.1]. Any company that wishes to operate from FZ must have a valid registration and license [4.3] and only conduct those activities on the license [4.4/5.7] and operations must be wholly or substantially in the Free Zone. FREE ZONE LICENSES [5] FZ mandates a valid license at all times of operation. License categories [5.1] include; o Trading (to carry out Trading activities specified in the license) o Service (to carry out Service activities specified in the license) o Industrial (to carry out light manufacturing activities specified in the license) Company may have more than one license with different activity subject to the size of the office, with the approval from the Free Zone. To hold a license the applicant must [5.4]; o Hold a Registration, o Possess a valid leased or freehold property. This address will be the registered address of the company, and o Company with rules and regulations and laws Any changes to the license details (eg address, contact details, shareholder, manager, signatory and activity) must be submitted to DMCCA within 14 days [5.6]. Failure to renew the license on or before the expiry date will call for a penalty [5.8]. The validity of the license can be either 1 or 3 years. Audited financial statements must be submitted annually [5.9]. Licensee must not be in arrears on any rent, levies, fines or other charges due to Authority or other entity in connection with its lease or freehold or other matter relating to the Free Zone [5.9]. Liquidator s report is mandatory while terminating the license and the company deregistration. Any Auditing Firm or Legal Firm can be appointed as a liquidator. 2

3 CANCELLATION, REVOCATION OR SUSPENSION OF LICENSE [6] DMCCA may revoke a license immediately upon written notice if a licensee: o Provided wrong information regarding its business, o Acted in breach or disregarded the terms of the license or laws, o Is not operating or carrying on any business, o Has not renewed its license. The license will be terminated by the Authority after 4th month of its expiry, o Has not paid fees, rent, levies, fines, service or other charges o Any Legal documents of the company issued by FZ for the company as well as the resolutions issued by the company can be attested from the FZ. FREE ZONE FREEHOLDS AND LEASES [7] A licensee must have an office, commercial unit, warehouse or development land from which it can operate; either leased or freehold [7.1]. An Operational Fitness Certificate for the fit out of the premises is mandatory to commence and renew a license [7.3]. Any construction must be in accordance with DMCCA s planning regulations [7.4]. Licensees may share or sub-lease premises with DMCCA s approval [7.5]. TERMINATION OF A DMCC LEASE [8] Settlement of all dues is required [8.1] and the premises must be handed back in original condition [8.2]. BUILDING AND OPERATION CONTROLS [9] Licensees constructing their own facilities must obtain all approvals as set out by DMCCA [9.1]. No signboards or name plates can be erected without DMCCA approval [9.3] and signage shall be in accordance with regulations [9.4]. INSPECTION OF PREMISES [10] 3

4 DMCCA may conduct inspections from time to time to monitor compliance and to review operations, staff and premises layout [10.1]. INSURANCE [11] All licensees must maintain property insurance in accordance with lease agreement or freehold sale and purchase agreement [11.3] All licensees must maintain third party liability (or public liability) insurance in respect of their business operations in accordance with the limits advised by DMCCA, currently AED1Million [11.5] and provide a copy of the policy certificate to DMCCA [11.6]. All licensees must maintain Workmen s Compensation insurance in accordance with UAE labour law [11.7] and provide a copy of the policy certificate to DMCCA [11.7]. All licensees must maintain a medical insurance policy for its employees and evidence shall be provided on request by DMCC [13.8]. EMPLOYMENT AFFAIRS [12] Subject to regulations DMCC shall provide entry permits, employee sponsorship, visa services, work permits and other matters concerning employees [12.1] Categories of employment; o Nationals o Sponsored Staff o Non-sponsored staff. An employee may only work in the Free zone if they have obtained approval from DMCCA; o o Sponsored employee will have a DMCC sponsored employment visa and a Company Employment Card (CED). Validity of the visa will be for 3 years. Non-sponsored employee will have either; Sister company employment visa and DMCC Access card; or Father/husband residency visa and DMCC Identity card. Sponsored staff from the Free Zone are not authorised to work outside the jurisdiction unless they have a written permission from the concerned authority to do so 12.2]. DMCC may set limits on the number of employees for a licensee [12.4] and visas are determined at DMCC s discretion based on license activity and size of premises [12.8]. The licensee is responsible for complying with employment contracts and labour law [12.5]. Licensee shall pay a cash deposit against each sponsored employee, with can be released by the authority, [12.6]. A refundable deposit is required for each sponsored employee and licensees enter into a Personnel Secondment Agreement with DMCC [12.6]. 4

5 Employee sponsorship may be terminated by DMCC if the licensee does not comply with the terms of its license, or the employee has failed to abide by rules and laws [12.10]. Company should try to settle any dispute/disagreement internally, if not, both the company and the employee can report the same to the Mediation team of the Free Zone. EMPLOYER/EMPLOYEE RELATIONSHIP [13] Labour Law applies to all persons employed in the Free Zone in addition to the provisions of Free Zone rules and regulations [13.1]. Costs of recruitment and other employment related services are born solely by the licensee, and cannot be passed on [13.2] and fines apply if this is contravened [13.3]. The employment agreements in the Free Zone are of 2 types, and must be written and comply with Labour Law; o Limited o Unlimited Each company should maintain a full record of the employee working under their company and timely notification to the Free Zone in case of any changes. Licensees must pay employee salaries every month subject to the Employment Agreement. Working hours will be in accordance with Labour Law [13.5]. Licensees should establish basic work rules such as working hours, employee health and safety, employee conduct and grievance and disciplinary procedures [13.6]. A licensee may only hold an employee s passport with their prior and genuine consent [13.7]. On expiry of termination of an employment contract both employee and employer must submit a signed letter of confirmation that all dues have been received [13.9]. Licensee must immediately advise if an employee is suspected of absconding or has not reported for work for 7 consecutive days without approval [13.10]. TRAFFIC AFFAIRS [14] Licensees must comply with Dubai Roads and Transport Authority (RTA), Dubai Police and all other laws pertaining to the use of roads inthe Free Zone [14.1-2]. Vehicle parking shall be in accordance with DMCC s policies and fines may apply [14.3]. 5

6 HEALTH, SAFETY AND ENVIRONMENT [15] All entities and persons must comply with the Free Zone HSEQ Manual [15.1] and Green Building Regulations (in the case of land) [15.2]. Licenses must provide DMCC with contact details in the event on an emergency, usually the General Manager [15.3]. Licensees must comply with DMCC s waste management policies [15.7]. VIOLATION OF REGULATIONS [17] Ignorance shall not be an acceptable excuse for non-compliance [17.1]. Serious offences shall be subject to fines, which are published by DMCC [17.2]. DISPUTE RESOLUTION [18] Licensees may raise an objection against DMCC s application of the rules by completing an appeals form addressed to the Membership and Compliance Committee [18.1] and the committee shall respond within 7 days. Serious offences shall be subject to fines, which are published by DMCC [17.2]. MISCELLANEOUS [19] Agreements of the company, where there is a 3 rd party, will not be attested by the FZ. Any legal/corporate documents from the parent company (abroad) to be used in the FZ Company registration should be legalised1. DMCC maintain and publish the list of charges which is applicable in case of any requested Service, Amendment and fine tariff for the defaulters. 1 Legalisation means Embassy legalization which is an alternative method of authenticating a document, used for countries that are not members of the Hague Convention such as UAE. 6