DUBAI MULTI COMMODITIES CENTRE (DMCC) SETTING UP A COMPANY IN DMCC

INTRODUCTION

Dubai Multi Commodities Centre (DMCC) is one of the UAE’s leading free zones, a global hub for trade and enterprise, home to over 25,000 companies, ranging from start-ups to multinational corporations​. Setting up a business in DMCC offers significant advantages, including 100% foreign ownership, zero customs duties within the free zone, and a pro-business regulatory environment. However, navigating the legal framework is crucial. DMCC companies must comply with a complex tapestry of free zone regulations issued by the DMCC Authority (DMCCA), alongside pertinent Dubai laws and UAE federal laws that govern company operations, taxation, insolvency, and dispute resolution.

This article provides an overview of the legal landscape for establishing and operating a company in DMCC. It examines the types of company structures available in DMCC, the required documentation and incorporation process, expected timelines, and the cost and minimum capital requirements involved. Further, it outlines the procedures for winding up or insolvency of a DMCC company and the mechanisms for dispute resolution, ensuring businesses know how to manage conflicts under the DMCC management. 

TYPES OF COMPANIES IN DMCC

DMCC permits a range of legal entities, primarily centred on limited liability companies and branch offices as per Section 3, Article 4.1 of the DMCC Companies Regulation 2024 (amended). Unlike some jurisdictions, DMCC does not offer structures like partnerships (e.g. LLPS) or public joint-stock companies formed within the free zone. The main company types in DMCC include:

• Free Zone Limited Liability Company (FZ LLC):
  This is the standard DMCC company, an independent entity with its own legal personality. It can have a single shareholder (often termed a Free Zone Establishment, FZE) or multiple shareholders (Free Zone Company, FZCO). Shareholders can be individuals or corporate entities. Liability is limited to the company’s share capital.​

• Branch of a Foreign Company:
  A foreign company can establish a branch in DMCC. The branch is legally part of the parent company (not a separate entity) and can conduct business within the scope defined by the parent. Unlike a limited liability company, a branch does not have its own share capital; the parent remains fully liable for the branch's obligations.

• Branch of a UAE Company:
  Similar to a foreign branch, a UAE-based company (for example, a mainland UAE LLC) can open a branch in DMCC. The branch will carry the same name and activities as the parent, and the parent company bears responsibility for the branch’s liabilities.

• Subsidiary Company:
  Often, when a foreign company wants a presence in DMCC with a distinct entity, it may incorporate a new DMCC free zone LLC as a subsidiary. Legally, this is just a DMCC LLC with the foreign company as its shareholder (hence a corporate shareholder scenario). It is treated as a free zone LLC (not a branch) in DMCC’s framework.

• Companies Limited by Guarantee:
  As per Section 3, Article 4.3, the company limited by guarantee may be formed and regulated under the Companies Limited by Guarantee Regulations 2024.
  In summary, the typical route for most investors is to set up a DMCC free zone LLC (either wholly individually owned or as a subsidiary of a corporate parent) or to register a branch. Both UAE nationals and foreigners are treated equally in terms of ownership; 100% foreign ownership is allowed in DMCC, and there is no requirement for any local Emirati partner or sponsor.

DOCUMENTATION REQUIRED

The documentation needed to set up a company in DMCC will vary slightly depending on the type of entity (new LLC vs. branch) and the status of the shareholders (individual vs. corporate). Below is a breakdown of key documents required for different company types in DMCC:

It is crucial to note that any official documents from outside the UAE (such as a parent company’s incorporation certificate or board resolution signed abroad) must be notarised and then legalised by the UAE Embassy and the UAE Ministry of Foreign Affairs to be accepted by DMCC. 

STEPS FOR SETTING UP A DMCC COMPANY

Setting up a company in DMCC involves a series of stages, from initial planning to final licensing. Below is a structured step-by-step process that applies to both LLCS and branches: 

•  Choosing a legal structure as well as business activity:
  The type of license you require will depend on the specific business activities you plan to carry out in DMCC, such as trading, services, industrial, etc. Choose the legal structure at this point as well, such as registering a branch or creating a new DMCC company (LLC). Verify that the activity is allowed among the more than 600 activities listed by the DMCC. Choose the number of shareholders, the share capital to declare, the shareholding structure, etc., for new businesses.

• Company name:
  Select a unique name for the company that complies with DMCC naming rules (no prohibited words, etc.). Submit the proposed name to DMCC for approval and reservation. Name reservation is typically done through the DMCC online portal. This step is usually quick and takes around 1-2 days for approval.

• Initial application and approval:
  Submit the initial application to DMCC for company setup. This is done via the DMCC online portal, where you fill in company details, shareholders, proposed business activities, and upload preliminary documents (passport copies, business plan, etc.). DMCC will conduct due diligence (know-your-customer checks) on the shareholders and the proposed business. Upon successful review, DMCC issues an initial approval or a provisional approval letter​. This approval confirms you can proceed, and it often comes with a reference letter to open a bank account for the company’s capital.

• Sign incorporation documents:
  Once initial approval is granted, DMCC will prepare the Memorandum and Articles of Association (for LLCs) or the branch establishment agreement. The shareholders or their authorised signatories will need to sign these documents, which can often be done at the DMCC office or via the DMCC portal (digital signing) as per the latest procedures.

• Corporate bank account and deposit capital:
  For new LLCs, DMCC may provide a bank introduction letter after initial approval to facilitate opening a UAE corporate bank account in the company’s name​. The company must deposit the share capital into this account. Under the updated regulations, there is generally no fixed minimum share capital required for most companies, but whatever capital is declared in the MOA should be deposited (banks may require a minimum opening balance). A bank capital confirmation letter is obtained after the funds are deposited​. Branches do not have share capital, so this step is about opening an operational bank account if needed, but no capital deposit requirement applies to branches​. 

• Lease office premises:
  Every DMCC entity must have a physical address within the DMCC free zone. The company should secure a lease for an office or a flexi-desk (shared workspace) as per its needs. DMCC offers flexible office solutions ranging from co-working desks to full offices. A signed lease or property agreement is required before final licensing.

• Final submission and license issuance:
  After completing the above, submit all finalised documents to DMCC for final approval. This includes the signed MOA/AOA, the lease agreement, the bank capital letter (for LLCs), and any remaining documents required. DMCC will then issue the final incorporation documents: the Company License, Certificate of Registration or Certificate of Incorporation, and the approved Articles of Association. For branches, a Branch Establishment Certificate is issued. At this point, the company is officially established and legally allowed to operate in DMCC.

• Post-incorporation tasks:
  Once licensed, the company can proceed with post-setup formalities. Key tasks include: registering with DMCC’s portal for government services, applying for establishment cards (to be able to sponsor visas), and then applying for residence visas for owners and employees as needed. DMCC’s one-stop portal allows new companies to handle visa and immigration steps (medical test, Emirates ID, visa stamping) conveniently​. Additionally, DMCC companies must appoint an auditor and prepare to comply with annual audit requirements at the end of the fiscal year; an auditor appointment is typically required within 30 days of licensing, and an audited report must be filed annually.
  
  Throughout the process, DMCC’s online application system and customer service play a central role. Much of the setup can be done remotely through scanned document uploads and e-signatures, although certain steps (like original document verification or bank account opening) may require the physical presence of the shareholder or their Power of Attorney holder.

TIMELINE FOR COMPANY SETUP

Setting up a DMCC company is relatively efficient, but it involves multiple steps that can span several weeks. Below is an approximate timeline for each major stage of the process, assuming prompt submission of documents and no unforeseen delays:

• Name Reservation & initial approval (1 to 2 weeks):
  Name reservation typically takes a couple of days; initial application review and due diligence might take 5-10 business days, depending on complexity.

• Document preparation and signing (1 week):
  This can overlap with initial approval timing. It includes preparing board resolutions, getting documents attested, and signing the MOA. If foreign documents need attestation, that can add extra weeks outside of DMCC’s process timeline.

• Bank account opening and capital deposit (2 to 4 weeks):
  Opening a corporate bank account in the UAE can be the slowest step; some banks may open an account in 1-2 weeks, but others take longer, especially for foreign-owned startups. However, DMCC does not necessarily wait for the full bank account activation to issue the license; they require the capital deposit letter, which some banks provide quickly once an initial account is opened. In parallel, securing an office lease within DMCC can be done in a few days.

• Final license issuance (1 week):
  After all requirements are met. DMCC can issue the license and registration documents within days of receiving the signed constitutional documents, lease, and bank confirmation.
  
  Some companies manage in as little as 3-4 weeks if all papers are in order and the bank account is opened swiftly. Branch registrations can take a bit longer, often 6 to 8 weeks, mainly due to the extra time legalising foreign parent company documents and the due diligence on the foreign entity​. It’s prudent to budget around 2 months for the entire process, especially for foreign investors.

COST AND CAPITAL REQUIREMENTS

Setting up and maintaining a company in DMCC involves several cost components. Below is an overview of the typical cost structure and capital requirements:

• Share capital:
  Under the DMCC Company Regulations 2020, the previous minimum share capital requirement of AED 50,000 has been removed. This means there is no mandated minimum capital for most businesses, unless a specific DMCC policy for a particular activity requires it. In practice, many DMCC companies still opt for a capital of AED 50,000 (approximately $13,615) or more, as this was the old minimum and is a comfortable amount to demonstrate solvency. The share capital amount must be stated in the Articles of Association, and at least one share must be issued. Even though DMCC doesn’t impose a blanket minimum, certain regulated business activities might require a higher minimum capital as a matter of DMCC policy or practical bank requirements. All declared capital must be deposited in a UAE bank, and a confirmation letter must be submitted (usually within 3 months of company setup, if not earlier). Branch offices do not have a share capital requirement, since they operate under the capital of the parent entity​.

• Registration and application fees:
  DMCC charges a one-time company registration fee at the incorporation stage. This covers the processing of the license application and the issuance of the company registration certificates.

• Annual license fee:
  Every company in DMCC must have a business license that is renewed annually. The cost depends on the type of license (trade, service, industrial, etc.) and the number of business activities. Typically, a standard trading or service license in DMCC costs roughly AED 15,000 – 25,000 per year ($5,000+ range)​. The license fee must be paid each year to maintain the company’s good standing.

• Miscellaneous DMCC fees:
  There are some smaller fees to consider, such as name reservation fees, initial approval fees, MOA issuance fees, and an establishment card fee (which is required to enable visa processing, usually a few hundred dirhams). These are generally minor compared to the license and rent.

• Ongoing annual costs:
  DMCC companies should budget for the annual audit service, appointment and paying an auditor to produce audited financial statements each year, and any accounting or PRO (government liaison) services as needed. Audit costs vary by firm and company size, but a small company might pay AED 5k-10k for a basic audit. Additionally, visa costs for employees or owners (government fees for issuance of residence visas, medical, and Emirates ID) will apply on a per-person basis.
  
  In summary, the initial setup cost (including first-year fees and rent) for a DMCC company can range from roughly AED 30,000 to AED 50,000 or more (about $8k-14k), depending on office selection and license type. This covers the DMCC fees and a modest office space. From the second year, the costs typically reduce to the recurring license renewal fee, rent, and operational expenses. DMCC’s cost structure is considered mid-range among UAE free zones, not the cheapest, but justified by the premium location and services​. 

WINDING UP & INSOLVENCY PROCEDURES IN DMCC

Business circumstances can change, and DMCC has a defined framework for companies that need to wind up (liquidate) or handle insolvency. The procedures in DMCC align with international best practices and also integrate with the UAE federal insolvency law. Key points on winding up and insolvency for DMCC companies are:

• Solvent winding-up (Section 17 of the Companies Regulation 2024 Amended):
  The directors must sign a declaration of solvency using a form provided by the Registrar. If the company has multiple directors, the majority of the directors should sign. This declaration must confirm the following:

  • The company has no assets and no debts, or

  • The company has assets but no debts, or

  • The company has debts but can pay them all within 12 months after starting the winding-up.
    
    The declaration must be made within 20 business days before, or on the same day but before, the resolution to wind up the company is passed. The company must appoint an approved liquidator (often an audit firm) to manage the process. The liquidator will settle any remaining liabilities, close accounts, and prepare a liquidator’s report. If the liquidator or liquidators at any time following appointment, in a solvent winding-up, conclude that the Company will be unable to pay its debts in full, they shall, promptly, call a creditors' meeting and then treat the winding up as an insolvent winding-up of the company, as per Article 115 of the Companies Regulation 2024 (amended). 

• Summary winding-up (Section 18 of the Companies Regulation 2024 Amended):
  In summary, winding-up is a quicker process for closing a solvent company; the directors must sign a declaration of solvency using a form set by the Registrar. If the company has more than one director, the majority of the directors should sign. The declaration must confirm that:

  • The company either has no assets or no debts, or 

  • The company has assets but no debts, and 

  • The company’s affairs can be fully wound up within six months of starting the process.
    
    This declaration must be made within 20 business days before, or on the same day but before, the resolution to wind up the company is passed. The company must appoint an approved liquidator (often an audit firm) to manage the process. In practice, this is used for very straightforward liquidations with no complexities. The steps are similar to a solvent winding-up, but on an accelerated timeline.

• Insolvent winding-up (Section 19 of the Companies Regulation 2024 Amended):
  If a DMCC company is insolvent (unable to pay its debts), the shareholders (or directors) may still resolve to wind up, but creditors will be involved. Under the new DMCC rules, an insolvent winding-up begins with a shareholders’ resolution and then requires a meeting of creditors to consider the situation. This aligns with the concept of a creditors’ voluntary liquidation. The liquidator in this case will focus on equitably settling creditor claims. However, crucially, the UAE’s federal Bankruptcy Law, Federal Decree-Law Number 9 of 2016, which was replaced by Federal Decree-Law Number 51 of 2023, also applies to DMCC companies​. This means that formal insolvency proceedings such as protective composition, restructuring, or declaration of bankruptcy would be handled under federal law through the Dubai Courts. The DMCC regulation provides a mechanism to commence the process, but the court may become involved to oversee the distribution to creditors. In practice, a DMCC company in serious financial distress would likely file for court-governed bankruptcy protection or liquidation in line with the federal law, with the DMCC Authority’s cooperation. 

• Involuntary winding-up (Section 20 of the Companies Regulation 2024 Amended):
  A Company may be wound up by the Court if the Court makes such an order following a petition to wind up a Company by the Registrar. The Registrar has the option (but is not required) to ask the Court to wind up a company if the Registrar decides that:

  • The company was previously struck off.

  • The company has seriously or repeatedly broken DMCC regulations or related rules.
    
    This decision is fully up to the Registrar's judgment. A court-appointed liquidator would take charge in such cases. DMCC would then act on the court’s directives to de-register the entity.

• Branch closure:
  Winding up a branch in DMCC involves closing the branch license. The parent company must provide a board resolution to close the branch and confirm that the parent will assume all the branch’s liabilities upon de-registration​. DMCC will require clearance of any outstanding fees, cancellation of visas, and possibly a notice period, then issue a de-registration certificate for the branch.
  
  In a typical solvent liquidation of a DMCC company, the timeline might be 2-3 months from the appointment of a liquidator to final closure, assuming quick clearance of visas and no outstanding debts. This includes a required notice publication, often a 14-day notice in a local newspaper, and obtaining clearances from various departments (immigration, utilities, etc.). The company must also cancel all employee visas and close bank accounts as part of the process. Notably, DMCC’s 2020 regulations introduced a “dormancy” option, a company can suspend its license for up to 12-36 months without fully deregistering, as a way to pause operations if needed. Dormancy can be an alternative to winding up for companies that might restart later, though it requires clearing visas and meeting certain conditions. 

DISPUTE RESOLUTION

​
Disputes involving DMCC companies can arise in various contexts, shareholder disagreements, commercial contract disputes, regulatory issues with the DMCC Authority, etc. It’s important to understand the avenues for dispute resolution:

• DMCC regulations and governing law:
  DMCC companies are fundamentally governed by the DMCC Companies Regulations and the laws of the UAE. Unlike certain free zones (such as DIFC or ADGM), DMCC is not an independent judicial jurisdiction; it falls under the jurisdiction of Dubai and UAE courts for legal matters. Therefore, by default, any legal disputes (civil or commercial) involving a DMCC company would be heard in the Dubai Courts, which apply UAE federal and Emirate laws unless the parties have agreed to an alternative forum. The DMCC standard Articles of Association typically stipulate that the company is subject to UAE law. There is no special “DMCC court,” so Dubai’s onshore courts are the competent authority for litigation.

• Arbitration:
  Dubai is a pro-arbitration jurisdiction, and DMCC companies often include arbitration clauses in contracts. If a DMCC company enters into a commercial agreement, the parties can agree to refer disputes to arbitration rather than court. A popular choice is the Dubai International Arbitration Centre (DIAC), which is the main arbitral institution in Dubai. DIAC arbitration awards are enforceable in the UAE courts under the New York Convention (to which the UAE is a party). Other arbitration forums like the London Court of International Arbitration (LCIA) (formerly via DIFC-LCIA in Dubai) or International Chamber of Commerce (ICC) arbitration can also be used; there is no restriction on a DMCC company agreeing to arbitrate overseas or under non-Dubai rules. Choosing arbitration can be beneficial for neutrality and expertise, especially in international contracts.

• DMCC speciality arbitration/forums:
  Given DMCC’s focus on commodities, certain industries have their dispute bodies (for example, the Dubai Diamond Exchange (a DMCC subsidiary) has specific arbitration panels for diamond trade disputes). These are niche and apply only if you are a member of those DMCC trade facilities. Generally, however, there is no DMCC-specific court or mandatory arbitration system for normal civil disputes. Companies in DMCC can, of course, mediate or negotiate disputes informally, and the DMCC Authority sometimes facilitates mediation in community issues like disputes between landlords and tenants in the DMCC zone, but this is not a formal judicial process.

• Regulatory and employment disputes:
  If the dispute is between the company and the DMCC Authority (for example, a penalty imposed by DMCC, or a license cancellation decision), the company can usually appeal the decision within DMCC, and ultimately, such matters could be taken to the Dubai courts under administrative law principles if needed. Employment disputes involving DMCC company staff are handled by the UAE Ministry of Human Resources (or the free zone’s labour desk) and ultimately the Dubai labour courts, as DMCC companies follow UAE Labour Law with some free zone facilitation.

• Dubai courts vs. DIFC courts:
  While the default for DMCC companies is the Dubai Courts, parties could contractually agree to opt into the DIFC Courts jurisdiction for their disputes. The DIFC Courts are an English-language common law court in Dubai. UAE law allows companies outside DIFC to choose DIFC Courts for their contracts. If such an agreement is in place, the DIFC Courts could hear a dispute involving a DMCC company. The resulting judgment would then be enforceable like a domestic judgment. This is an option some foreign investors consider for commercial contracts, given the DIFC Courts’ international procedures.

• Enforcements of judgments/awards:
  A judgment from the Dubai Courts against a DMCC company is enforceable against that company’s assets like any domestic company. If a DMCC company owes money and a court issues a judgment, the creditor can enforce against the company’s bank accounts or other assets in the UAE. Similarly, arbitration awards can be ratified by the court and enforced. The DMCC Authority may also refuse to renew a company’s license or deregister it if there are outstanding judgments or debts, adding pressure to comply.
  
  In practice, DMCC companies have access to the full spectrum of UAE dispute resolution mechanisms, from litigation in UAE courts to arbitration. Internally, shareholder disputes in a DMCC company can also be arbitrated if the shareholders have an arbitration agreement, often contained in a shareholders’ agreement separate from the DMCC Articles. If not, such disputes (e.g. over director appointments or dividends) would go to the Dubai Courts. The DMCC Companies Regulations 2020 improved corporate governance but did not create a unique dispute forum, so general UAE corporate law remedies like derivative actions or oppression claims would be pursued through court litigation.

CONCLUSION

Setting up a company in DMCC is an attractive option for investors seeking a stable, well-regulated platform in Dubai. The process involves selecting the appropriate entity type, preparing thorough documentation, and following a clear approval process with the DMCC Authority. UAE nationals and foreigners alike enjoy equal ownership rights in this free zone, with no local partnership required. While the setup and annual costs are significant, they come with the benefits of DMCC’s world-class infrastructure and services. 

Moreover, the legal regime, from flexible share capital rules to modern winding-up procedures, aligns with international standards, giving businesses confidence in the continuity and exit strategies for their DMCC entity.