Key Updates to DMCC Regulations and Licensing Rules You Need to Know
The Dubai Multi Commodities Centre (DMCC) has recently updated its regulatory framework, with new rules coming into effect on October 10, 2024. These changes are designed to simplify doing business within the free zone, supporting DMCC’s role as a global hub for trade and commerce.
Key Takeaways
- Introduction of Companies Limited by Guarantee
- New Licensing Options for Holding Companies, SPVs and Freelancers
- Flexibility in Share Capital Management
- Enhanced Regulations for Family-run Businesses
Companies Limited by Guarantee
One of the key updates is the introduction of provisions for companies limited by guarantee. This structure allows companies to operate without share capital, with members’ liability restricted to the amount they guarantee in the event of the company’s liquidation. This offers an alternative business structure for organizations, particularly those focused on non-profit or social enterprises.
Special Purpose Vehicles (SPVs)
The new regulations also make it possible to establish Special Purpose Vehicles (SPVs) in the DMCC. SPVs are typically used for asset holding, structured finance, or risk management, allowing companies greater flexibility in structuring their business activities. This is expected to benefit industries like real estate, finance, and investment firms that require distinct entities for specific transactions.
Holding Companies
Another significant update is the expansion of licensing options. Under the new rules, businesses can now apply for a holding company license. This option allows companies to establish holding entities to better organize and control their corporate groups. It offers greater flexibility in structuring business operations, particularly for multinational corporations and diversified groups.
Freelance Licenses
DMCC has introduced a freelance license, which allows individuals to conduct business independently without needing to be tied to an employer. Freelancers can now operate within the free zone without needing a formal employment contract or incorporating a full-fledged company. This development is likely to attract a wide range of professionals, such as consultants, designers, and other independent contractors.
Updates on Share Capital
The new rules include significant changes to share capital management. Amendments cover areas such as the currency of share capital, issuing bonus shares, and reducing capital. Companies can also issue redeemable shares and are no longer restricted to specific share classes. These adjustments offer businesses more options for capital structuring and shareholder agreements.
Share Capital Deposits
The regulations have simplified the requirements for share capital deposits. Companies are no longer required to deposit their share capital in a bank account unless the amount exceeds AED 50,000. This change reduces the initial financial burden on businesses, making it easier for companies to start their operations in the free zone.
Directors and Corporate Governance
The minimum age for appointing directors, secretaries, and managers has been lowered from 21 to 18 years. This change offers businesses more flexibility in their corporate governance, particularly for startups and family-run businesses where younger members may take active roles in management.
These regulatory updates are part of DMCC‘s ongoing efforts to remain competitive on a global scale and provide businesses with a supportive, flexible environment. The new rules aim to simplify processes, improve corporate governance, and offer greater operational freedom, making DMCC an even more attractive location for businesses across various sectors.
These updates reflect DMCC’s commitment to maintaining its status as a leading global free zone, ensuring that it stays aligned with international standards while supporting business growth within the region
