The DIFC has announced a full waiver of registration and license fees for new companies. Those looking at establishing ANY LICENSE (regulated or non-regulated) in the DIFC, will have to pay ZERO license and registration fees*, with deferred rental payments for upto 6 months**!
Forming your DIFC company has never been more cost effective. Take advantage of this limited time offer - GET IN TOUCH TODAY!
Note: *DFSA fees not included in the offer **for DIFC-managed buildings only
DIFC is one of the world’s top ten onshore financial centers and offers a secure and efficient platform for businesses and financial institutions to reach into and out of the emerging markets of the region. The quality and independence of DIFC’s regulator, the prevailing common law framework, excellent infrastructure and tax efficiencies make it the perfect base to take advantage of the rapidly growing demand for financial and business services in the MENASA region.
DIFC fills the time-zone gap for a global financial centre between the leading financial centres of London and New York in the West and Hong Kong and Tokyo in the East.
Why setup a financial services firm in the DIFC?
The DIFC is a leading financial hub in the region. Besides offering a wide range of financial service activities, the centre also provides an integrated environment and world-class standard of living. It is well regarded in the international community as well.
There exist opportunities for startups as well. The recent focus on fintech led to the DIFC Fintech Hive initiative, that serves as an accelerator for fintech firms to test their products and pitch it to prospective investors. Sarwa (https://www.sarwa.co) is one such success story.
Here are some specific advantages of establishing in the Dubai International Financial Centre.
LEGAL AND REGULATORY FRAMEWORK
- Legal framework supports cross-border activities
- 100% foreign ownership permitted
- No restriction on foreign talent or employees
- No restrictions on capital repatriation
- Zero tax for 50 years on profits, capital or assets from 2004
- Zero tax on employee income
- Highly regarded, independent regulator
- Independent, English-speaking, common law judicial system
- Distinct from the UAE legal system
- Risk-based regulatory approach
- Central to regional deal making
- High concentration of international firms, investment funds, wealth management firms, banks, and financial institutions
- World-class regional and international law and auditing firms, and other professional services
- The largest fund domicile in the region
- Management offices, holding companies and family offices are located closer to the assets they own or manage
- The Middle East, Africa and South Asia (MEASA) is increasingly the centre of gravity for the global economy
- Dubai plays a central role in the growing South-South trade, principally between Asia and Africa
- Well-positioned to harness the potential of emerging markets
Setting up a regulated firm in the DIFC
Firms interested in engaging in financial services from the DIFC are required to submit applications to the independent regulator - Dubai Financial Services Authority, or DFSA.
The DFSA offers a wide range of financial service activities, from investment advisory to asset management, brokerage and wholesale banking. For the purposes of authorisation and supervision,the DFSA categorises applicants based on the activities applied for. There are five main categories of Authorised Firms in the DIFC. Read more about the DIFC Licensing categories here:
The DFSA application process
The DFSA has a fast-track process for Fund Manager licenses, which come under Category 3C. The Fund Manager, if approved, can manage domestic (Public, Exempt and Qualified Investor Funds) and Foreign Funds in other jurisdictions as well. For all other financial services, applicants have to go through a full-fledged license process.
Step 1 – Introductory meeting with the DIFC
The first step involves a formal meeting with the DIFC. A holistic description of the project, intended activities and expansion plans are discussed here. The outcome of the meeting is the submission of a ‘Letter of Intent’, expressing interest in setting up in the DIFC.
Step 2 – Regulatory Business Plan
The regulatory business plan forms the backbone of the application to the DFSA. It has to be comprehensive, and detail the business model, revenue streams, corporate governance and management, control mechanisms, risks involved and every other aspect that will be relevant to the proposed business.
The first draft of the regulatory business plan is sent to the DFSA for a quick review, following which they revert either confirming the go-ahead for submissions, or suggesting a rework of the draft.
Step 3 – Formal submission to the DFSA
The next step is submission of the formal application to the DFSA. This is a comprehensive submission and includes the regulatory business plan, financial model, manuals and policies, KYC and other details on the shareholders, directors, controllers and senior management, and IRAP/ICAAP reports if applicable. The DFSA application fee has to be paid as well.
Step 4 – Detailed review process
The DFSA conducts a detailed review process for all applications. A case officer is appointed, and he/she reviews the application and sends across a list of questions that the applicant clarifies. This process can take upto two-three months, with multiple rounds of followup queries and clarifications. The DFSA also, at some point during this process, conducts an interview with the Senior Executive Officer, Compliance Officer and controllers, to better understand the project and their roles.
Setp 5 – Issuance of In-Principle approvals
A satisfactory review process at an internal DFSA authorisation committee meeting results in the DFSA issuing an In-Principle Approval (IPA). The IPA states that the DFSA welcomes the applicant to the centre, subject to the completion of conditions stated in the IPA. These conditions usually include setting up the legal structure, opening the bank account and deposit of the share capital.
Step 6 – DIFC ROC Process
The DIFC Registrar of Companies is the body that is responsible for processing applications for setting up legal structures in the DIFC. Part of this process is availing office space within the DIFC. The process ends with issuance of the DIFC Commercial License.
Click here to know more about the costs involved in setting up a regulated company in the DIFC.
Step 7 – Bank account opening
A bank account of the firm has to be opened in a local bank. This process can take 1-2 weeks. Once opened, the share capital will have to be deposited into the account.
Step 8 – Final submission to the DFSA
Evidence of fulfilment of the in-principle conditions is submitted to the DFSA, following which they issue the Financial Services Permission to the applicant firm. The firm can now conduct business from the DIFC.