Dubai Technology and Media Free Zone Authority

Decision No. 2 of 2006
Concerning Licensing of Hotels and Leisure Services in the Dubai Technology and Media Free Zone

I, Ahmad Binbyat, Director General of the Dubai Technology and Media Free Zone Authority

After perusal of the Dubai Technology and Media Free Zone Licensing Regulations 2003 and Regulation 3.2 thereunder and Decision No. 1 of 2006 concerning licensing categories, hereby issue the following decision regarding the licensing of hotel and leisure services in the Zone.

This decision replaces Decision No. 5 of 2004 and shall be read together with Decision No. 1 of 2006.

Notes

Issue of Licences

1.1

Licences for Hotel and Leisure Services may be issued for each of Dubai Internet City ("DIC"), Dubai Media City ("DMC"), Knowledge Village ("KV") International Media Production Zone ("IMPZ"), Dubai Outsource Zone ("DOZ"), Dubai Studio City ("DSC"), Dubai Biotechnology and Research Park ("DuBiotech") and Dubai Renewable Energy Eco-Community ("DREEC").

1.2

Hotel and Leisure Service Licences may not be issued for Dubai Land ("Dubailand").

Definitions

2.1

"Authority"

means the Dubai Technology and Media Free Zone Authority.

2.2

"Classification" and "Classified"

means the hotel ranking classification rating system used by the Department of Tourism and Commerce Marketing.

2.3

"DNRD"

means the Dubai Naturalisation and Residency Department.

2.4

"DTCM"

means the Department of Tourism and Commerce Marketing of the Government of Dubai.

2.5

"Employment Regulations"

means the Dubai Technology and Media Free Zone Employment Regulations 2004.

2.6

"Guest"

means any person who checks in at a Hotel, Guest Houses or Furnished Apartment for the purpose of being lodged against a financial consideration.

2.7

"Guest House"

means a building or part of a building which incorporates not less than 10 bedrooms and which provides lodging services only against a financial consideration.

2.8

"Hotel"

means a building or independent part of a building which incorporates not less than ten (10) bedrooms available for board and lodging services against a financial consideration.

2.9

"Hotel Apartments"

means a Hotel Establishment comprising not less than eight serviced and furnished villas or apartments leased to clients on a daily, weekly or monthly basis. Hotel Apartments do not necessarily provide food and beverage services. (The term "Furnished Apartment" has been changed to "Hotel Apartment" by the DTCM since 20 October 1999.

2.10

"Hotel Establishment"

means any of a Hotel, Hotel Apartment or Guest House.

2.11

"Hotel Licence Fee"

means the annual fee payable by a Hotel Establishment to operate in the TECOM Zone determined in accordance with Clause ‎11 below.

2.12

"Hotel Management Licence"

means a licence granted to a Hotel Establishment in terms of the Licensing Regulations and the Licensing Decision.

2.13

"Hotel Operator"

means the applicant for a Hotel Management Licence who must also be the legal person (or persons) who will own and control and be the registered shareholder of the shares in the Operating Company.

2.14

"Licensing Decision"

means Decision No. 1 of 2006

2.15

"Licensing Regulations"

means the Dubai Technology and Media Free Zone Licensing Regulations 2003.

2.16

"Liquor Licence "

means an alcoholic drinks licence issued under the Dubai Law of 1972 Controlling Alcoholic Drinks.

2.17

"Operating Company"

means a free zone limited liability company incorporated under the provisions of the Dubai Technology & Media Free Zone Private Companies Regulations 2003.

2.18

"R&LD"

means the Registration and Licensing Department of the Dubai Technology and Media Free Zone Authority.

2.19

"TECOM Zone"

means the Dubai Technology and Media Free Zone.

2.20

"Tourism Licence"

means a licence issued by the DTCM in the Emirate of Dubai to allow the holder to provide services as a Hotel Establishment.

2.21

"Zoning Authority"

means the Zoning Authority of the Dubai Technology and Media Free Zone Authority.

Hotel Name Registration

3.1

The Hotel Operator shall submit an application with the proposed Hotel Establishment name to the DTCM, on the DTCM's standard form, for initial approval by the DTCM.

3.2

On receiving the DTCM approval as set out in Clause 3.1 above, the Hotel Operator shall then submit a name approval application for the Hotel Establishment to R&LD on R&LD's standard form and attaching the approval from DTCM obtained under Clause ‎3.1 above.

3.3

Once the Hotel name is approved by both DTCM and R&LD, the Hotel Operator may commence Classification.

Classification - Hotel Management Licence and Trade Licence

4.1

No Hotel Establishment in the TECOM Zone may be operated unless it is Classified by the DTCM.

4.2

Prior to commencing construction of the Hotel Establishment, the Hotel Operator shall establish the Operating Company in the TECOM Zone under activity 10.3.4 ("Administration Office") as set out in and subject to the Licensing Decision. The lease or freehold title for the plot of land where the Hotel Establishment is to be constructed must be registered in the name of the Operating Company. The Hotel Operator must be the registered shareholder of the shares in the Operating Company. No transfer of shares in the Operating Company will be permitted by the Authority during the Classification and licensing process.

4.3

The Operating Company will maintain its licence as an Administration Office for the entire construction, Classification and licensing process. The activity of the Operating Company will only be converted to a Hotel Licence (with the purposes of Segment 10.4 of the Licensing Decision) when the Hotel is complete and the Tourism Licence has been issued to the Hotel Establishment by the DTCM.

4.4

For all activities under this Decision (and for the purposes of Segment 10.4 of the Licensing Decision) and for the purposes of Regulation 23.1 of the Dubai Technology and Media Free Zone Private Companies Regulations 2003, the minimum paid up capital of the Operating Company shall be in accordance with the following:

Classification	Shared Capital
3 Star Hotel	AED 1,000,000.00
4 Star Hotel	AED 2,000,000.00
5 Star Hotel	AED 3,000,000.00
Deluxe Hotel Apartment	AED 2,000,000.00

4.5

For the avoidance of doubt, the United Arab Emirates national ownership and/or United Arab Emirates national ownership sponsorship requirements imposed by the DTCM in Dubai do not apply to the development and operation of Hotel Establishments in the TECOM Zone.

Hotel Establishment Construction Permit

5.1

Subject to having completed the requirements of Clause ‎4 above (Hotel Management Licence and Trade Licence) the Hotel Operator shall apply for a no objection certificate from the DTCM to commence construction of the Hotel Establishment.

5.2

Having obtained the no objection certificate from the DTCM as set out in Clause ‎5.1 above, the Hotel Operator shall apply for and obtain construction approval from the Zoning Authority.

5.3

At the completion of the construction of the Hotel Establishment, the Hotel Operator shall apply to the Zoning Authority for a building completion certificate.

5.4

Having obtained the building completion certificate as set out in Clause ‎5.3 above, the Hotel Operator may then apply to DTCM for DTCM to undertake the hotel inspection and Classification.

Hotel Inspection and Classification

6.1

All Hotel Establishments are subject to Classification. No Hotel may operate in the TECOM Zone without obtaining Classification.

6.2

The DTCM determines in accordance with its own policies and regulations the Classification for any Hotel Establishment. The Authority does not participate in the Classification process.

6.3

Classification is an ongoing process and involves checks and regular inspections by the DTCM. As a term of any Hotel Establishment's licence in the TECOM Zone, that Hotel Establishment is required to comply with all directives, policies and procedures of DTCM. Any breach by a Hotel Establishment of Classification will constitute a breach for the purposes of Regulation 10.1.2 of the Licensing Regulations.

Liquor Licence

7.1

Any Hotel Establishment licensed to operate in the TECOM Zone in accordance with this Decision, may apply for a Liquor Licence. It is noted that the DTCM has agreed not to process any application for a Liquor Licence for any Hotel Establishment in the TECOM Zone without an official approval letter from the Authority.

7.2

Subject to the above, the Hotel Establishment will otherwise process a Liquor Licence application on the same basis as other hotels in Dubai.

7.3

For the avoidance of doubt, the provisions of Article 12 and Article 13 of Law No. 1 of 2000 of the Emirate of Dubai shall not apply to the wholesale supply to, and the retail supply by, any Hotel Establishment in the TECOM Zone of food and beverage items.

Visa Policy

8.1

The Employment Regulations shall apply to all staff engaged by Hotel Establishments.

8.2

Transit and Tourist Visas for hotel guests will be managed by the Hotel Establishment through the DNRD, and not through the visa licensing process managed by the Authority. The Authority will assist the Hotel Establishment to obtain an immigration card at the DNRD. Prior to the rendering of any assistance by the Authority to the Hotel Establishment to obtain the immigration card from the DNRD, the Hotel Establishment will supply to the Authority an undertaking letter, in the Authority's required form, stating that the immigration card will only be used for transit and tourist visas and not for employment and visit visas.

8.3

While the Operating Company is licensed as an Administration Office as set out in Clause ‎4.2 above, the Operating Company will be entitled to a maximum of six (6) employment visas under the Employment Regulations.

8.4

After Classification of the Hotel Establishment is completed, the Operating may apply for employment visas under the Employment Regulations up to a maximum amount determined on a ratio based on the number of guest rooms at the Hotel Establishment multiplied by a factor based on the Classification of the Hotel Establishment. The visa entitlement matrix is as set out below:

	Hotel
Classification	5 Star	4 Star	3 Star
Employment Visa Quota (staff per room)	1.65	1	0.8

	Hotel
Classification	Deluxe
Employment Visa Quota (staff per room)	0.75

8.5

The Operating Company shall be entitled to avail itself of up to seventy percent (70%) of the total permitted visas for that Hotel Establishment as set out in Clause ‎8.4 above on issuance of the Tourism Licence to the Hotel Establishment. The total permitted visas will be allowed only after the Hotel Establishment has paid the Authority the Hotel Licence Fee.

Food, Beverage and Retail Outlets in a Hotel Establishment

9.1

Where a Hotel Establishment maintains within the premises of the Hotel Establishment separate outlets for the provision of food, beverages and for health fitness and leisure services (each an "Outlet" and collectively "Outlets") then such Outlets are not required to obtain a separate licence under the terms of the Licensing Decision provided such Outlets are owned and managed by the Hotel Establishment. For the avoidance of doubt, any other retail service premises and/or services must obtain a separate licence under the Licensing Decision.

9.2

For the avoidance of doubt, all food and beverage Outlets in a Hotel Establishment are subject to the jurisdiction of the Dubai Municipality in accordance with the Dubai Order issued on 21 January 2004 regarding health, public safety and environmental protection regulations in the Emirate of Dubai.

10.

Waste Disposal

10.1

Dubai Municipality provides waste disposal services to Hotel Establishments in the TECOM Zone in the same way, and for the same cost, as to other hotel establishments in Dubai. The annual fees to be paid by a Hotel Establishment for waste disposal services vary by Classification and are as set out below:

	Hotel
Classification	5 Star	4 Star	3 Star
Waste Management Fee (AED per annum)	80,000.00	60,000.00	40,000.00

	Hotel
Classification	Deluxe
Waste Management Fee (AED per annum)	10,000.00

11.

Hotel Licence Fee

11.1

The Hotel Licence Fee for a Hotel Establishment is determined based on the Classification for a Hotel Establishment. The Hotel Licence Fee is as set out below:

	TECOM Annual Licensing Fee
	Hotel			Hotel Apartment
	3 Star	4 Star	5 Star	Deluxe
Hotel Establishment holding Liquor Licence (AED/ per room/ per annum)	10,000.00	16,000.00	25,000.00	N.A.

Hotel Establishment not holding Liquor Licence (AED/ per room/ per annum)	7,000.00	11,200.00	17,500.00	12,000.00

11.2

The rates set out in Clause ‎11.1 above are on a per room, per annum basis. The number of rooms in any Hotel Establishment will be finally determined with reference to the Classification by DTCM.

11.3

The Hotel Licence Fee shall be paid by a Hotel Establishment to the Authority on a calendar quarterly basis in advance on 31 March, 30 June, 30 September and 31 December in each year. The first quarterly payment by a Hotel Establishment on obtaining its licence will be pro-rated up to the next calendar quarterly payment date. The Hotel Licence Fee will commence from the date the Tourism Licence is issued to the Hotel Establishment by the DTCM.

11.4

In the event of closure of any part of the Hotel Establishment (due to renovation works or similar) the Zoning Authority shall inspect the Hotel Establishment and, in consultation with the DTCM, determine a revised number of rooms for the Hotel during the course of partial closure. In such circumstances, the Hotel Licence Fee shall be pro-rated accordingly for the period of such temporary closure.

Telecommunication Services

12.1

In order to compliment the telecommunications services offerings in the TECOM Zone, each Hotel Establishment shall obtain telecommunication services through the Authority's designated telecommunications services provider.

13.

Entertainment Activities

13.1

All Outlets within a Hotel Establishment that provide entertainment shall comply with the requirements of the DTCM and the Dubai Police with respect to the provision of any such entertainment and shall obtain all relevant permits, permissions and approvals as may be required for any particular entertainment activity. For the avoidance of doubt, the Authority shall not levy any additional fee with respect to entertainment conducted inside a Hotel Establishment.

This Decision shall come into effect on the date of its issuance.

Ahmad Binbyat

Director General of the
Dubai Technology and Media Free Zone Authority

Issued in Dubai on 19 October 2006