Monday, April 2, 2012

Dubai to issue investors instant trade licences

The Dubai Department of Economic Development (DED) is planning to issue instant trade licences to investors under a new ‘120 days hassle free licence’ initiative that will be launched this year.

The move, which will allow investors to have their licences issued immediately, will drastically simplify the investment and business registration process, depending on the risk factors of the intended business activity.

The UAE has improved its rank in Ease of Doing Business to 33 in 2012, up from 35 in 2011, under the World Bank’s annual Doing Business report. DED said the scheme is aimed “to give businesses in Dubai a head start and promote the emirate’s competitiveness”.

“It is critical today that we ensure that the key sectors of our economy — trade, logistics, finance, knowledge sector, tourism, retail, and manufacturing and industry — are made even stronger and more competitive in this globalised age,” Shaikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai, said.

DED, the government’s trade licensing and regulatory body, renews and issues roughly 120,000 trade licences annually.

The 120-day licence allows businessmen to start businesses immediately and complete the rest of the licensing requirements, such as approvals from other government authorities concerned, within the subsequent 120 days.

Government authorities are entitled to ensure full compliance by the licence holder to the licence criteria on day 121.

The initiative, being implemented under the directives of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, will simplify procedures and facilitate business.

“The 120-day licence is part of DED’s efforts to enable businesses to make full use of the advantages of Dubai and improve the emirate’s ranking in the Doing Business Report of the World Bank,” said Mohammad Shael, Chief Executive Officer of the Business Registration and Licensing (BRL) Division at DED.

Business activities have been categorised as no-risk, low-risk and high-risk for the sake of evaluating the risk component.

More than 90 per cent of the businesses in the emirate are no-risk or low-risk and therefore a vast majority of businesses stand to benefit from the 120-day licence.

For high-risk business activities constituting the remaining 10 per cent, such as restaurants and clinics, all standards set by the government authorities concerned must be fully met before DED issues the licence.

Dr Khalid Maniar, founder and managing partner of Horwath MAK, told Gulf News, “The move will definitely attract investment and improve the competitiveness of Dubai, and enhance its global ranking in doing business.”

Shael said: “The categorisation depends on four main risk factors, evaluated on the basis of whether the business activity is harmful to human beings, harmful to animal life, harmful to plants, or harmful to the environment.

“When a businessman approaches DED for a licence, a 120-day licence is issued immediately, on completion of the necessary procedures, if the specific business activity falls under the no-risk or low-risk categories.”

Referring to the 120-day hassle-free licence as a new philosophy of business registration and licensing, Shael said the initiative along with significant reforms like Law No 13 of 2011 will dramatically enhance the ease of doing business.

“These facilities have stringent standards often embedded in their design and they go through years of preparations and inspections. Hence there is no risk in issuing them a licence.

“It will in fact allow them to complete procedures like testing and hiring before starting actual operations,” Shael said.

Law No 13 issued by Shaikh Mohammad in 2011 acknowledges the contributions of free zone companies to Dubai’s economy and allows such firms to open branches in Dubai while maintaining their presence in the free zone.