Dubai moves to ease businesses

Business community in Dubai will get more facilities for ease of business in the emirate as the government is set to launch a ‘120 days hassle free licence’ by the end of 2012. The Department of Economic Development (DED) will implement the new initiative with an aim to give businesses in Dubai a head start and promote the emirate’s competitiveness. “The 120 days 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 Mohammed Shael, chief executive officer of the Business Registration and Licensing Division at DED. It will allow investors to have their licences issued immediately from DED depending on the risk factors of the intended business activity. Business activities in Dubai have been categorised as No-Risk, Low Risk and High-Risk for the sake of evaluating the risk component. The 120 days licence allows the businessman to start his business immediately and complete the rest of the licensing requirements, such as approvals from other government authorities concerned, within the next 120 days. Government authorities are entitled to ensure full compliance of the licence holder to the licence criteria on day 121. More explanation is needed to clarify certain things mentioned in the statement issued by the DED, according to a top business consultant in Dubai. It’s not mentioned that what will happen in case the businessman fail to meet the requirements in specified 120 days,” Jitendra Consulting Group chairman and managing partner Jitendra Gianchandani told Khaleej Times. “May be DED will cancel his or her license, but then the question raised about the employees hired against this license,” Gianchandani added. DED said 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 days license. For High-Risk business activities constituting the remaining 10 per cent — such as restaurants and clinics — all standards set by the government authorities concerned have to be fully met before DED issues the license, according to DED. “This is good news for only 10 per cent companies, which carry out special activities, such as restaurants, clinics or construction etc., which in normal case takes three to six months to issue the licence,” Gianchandani said. “Rest of 90 per cent business in low-risk category should opt for present system only, which takes five to 20 days. So for them there is no need to apply for the 120 days hassle free licence,” he argued. Referring to the 120 day hassle free license as a new philosophy of business registration and licensing, Shael said the initiative along with significant reforms like the Law No.13 of 2011 will dramatically enhance ease of doing business in Dubai. The Law says a Free Zone company can operate a branch in Dubai as long as it is active within the Free Zone but any termination of Free Zone activity will reflect in the Dubai licence as well.