The UAE offers lots of opportunities for universities looking to establish an international campus. With a thriving education sector, it remains a draw for investors and universities looking to enter the region. Dubai, in particular, is one of the more mature markets in the Middle East and with the likes of University of South Wales recently entering the region; it doesn't look like that interest will change any time soon.
The regulation of UAE universities in Dubai is regulated by the Ministry of Education (MoE), who are responsible for the promotion of higher education in the UAE; and it achieves this through the Commission for Academic Accreditation (CAA). The Knowledge & Human Development Authority (KHDA) manages the licensing process for international university branch campuses located in the Dubai Free Zones.
Regulatory Compliance and Structuring
The KHDA dictates that all international branch campuses must be established by way of a branch. A limited liability company is not permitted. The branch will need to be formed by the main University legal entity directly, and not a subsidiary. Operating in Dubai through a branch licence may have tax implications, and given that there is no separate legal personality for the Branch there will be no ring fencing of liability between the university and the Dubai branch campus.
It is common for the university to partner with a UAE based service provider (an Academic Infrastructure Service Provider or ISP) to jointly operate the Dubai campus. The ISP must also be licensed by the KHDA. The ISP’s role is flexible but usually includes taking responsibility for the land and premises, employment of faculty and operating the marketing and admission systems. The university, however, must retain absolute right to decide on all academic matters, including hiring of faculty and admission of students. The ISP is prohibited from having any involvement in the provision of courses or academic management of the campus. An International University in Dubai will need to interact with the MoE and the CAA only if it wishes to obtain local accreditation for its courses.
Selecting the right ISP is key. Is the ISP providing operational support and local knowledge and assistance only, or will they also be providing investment (for example to fund purpose built premises). It is important to take time to understand the ISP and their reasons for partnering with your institution, and spend time explaining your ethos and the reasons for expansion. These discussions should deal with how the local campus will operate and be managed and the oversight required and responsibilities of each party. This will help ensure that interests and expectations are aligned and will flush out any potential areas of mismatch.
It is also common for a third party investor to fund the construction of premises. Typically this "PropCo Investor" will acquire land (either freehold or a right to develop the land) and own the premises. A suite of investment and development agreements and operating leases will need to be negotiated.
Protection of Intellectual Property
International universities should aim to maximise their brand value. This can be achieved by protecting the name and logo of the institution, the curriculum, courses and any current or future teaching materials. There may also be intellectual property rights which exist in educational software systems and platforms.
Given that the use of the name and logo of the university will be core to any project, it is crucial to ensure that clearance searches are conducted to confirm that the name is cleared for use and registration, and if so, that adequate trade mark protection is secured in advance of signing any agreements. As part of this protection strategy, it is important to consider whether Arabic language variations of the mark need to be protected.
There are a number of education focused free zones in Dubai (such as Knowledge Village and Dubai International Academic City) which have prebuilt premises that universities can lease, as well as other free zones such as Dubai South and DMCC that are receptive to education institutions. However, you may wish to have purpose built premises constructed. Land can pose an issue, not only in terms of location (you will be limited to land in the free zone in which you plan to operate) but also construction and opening deadlines.
Unless the Dubai branch campus will be owned or funded by the Government, the campus will be subject to a standard rate of VAT from 1 January 2018. This applies even for campuses located in the free zones. All campuses are required to register for VAT. Please see our VAT article for further details on the VAT requirements for universities.
Universities can apply to the relevant Immigration Authority for a student visa for individuals wishing to study at their campus. A student visa only permits an individual to study at the relevant university and does not permit the undertaking of any paid work.
The Ministry of Human Resources and Emiratisation (MHRE) has recently issued a resolution enabling students to undertake paid work provided that they obtain a part-time work permit from the MHRE. It is not clear whether a student enrolled in a university in a free zone will be able to obtain a work permit from MHRE. In any event, this is only relevant where the part-time work is onshore. Part-time work for a business in a free zone will require permission from the relevant free zone authority.
The Dubai Creative Clusters Authority (DCCA), the licensing authority for nine free zones in Dubai including the Knowledge Village and Dubai International Academic City free zones, allows university students attending institutions located in the DCCA operated free zones to carry out paid part-time work for companies also located in those free zones.
Having assisted a large number of the universities who have set up in Dubai, such as University of South Wales, Modul University Dubai and University of Wollongong we are able to help you navigate the regulatory and legal landscape and ensure you take into account everything that may affect you entering the region.