Setting up corporate offices in the DIFC | Setting Up In DIFC

  • 13-06-2019
 
Setting up corporate offices in the DIFC:
 
What is the DIFC?
 
The Dubai International Financial Centre, or DIFC, is a leading financial hub in the region for business, fintech, and lifestyle. Setup in 2004, the DIFC has grown to be one of the top 10 onshore financial centres in the world. It brought in a paradigm change in the region, by adopting a Common Law framework, with an independent regulator (DFSA) and an independent English language Common Law judiciary – DIFC Courts.

 

Since then, the DIFC District has matured into more than just a place to work – it is now a lifestyle destination, with retail outlets, cafes and restaurants, art galleries, residential apartments, public green areas and hotels dotting the landscape.

Why setup in the DIFC?

The DIFC is one of the only two financial free zones in the UAE. It offers 100% foreign ownership, as opposed to establishing a financial services firm in the Dubai mainland, where only part foreign ownership is permitted. The DIFC is the preferred gateway for investors to access the Middle East, Africa and South Asia (MEASA) markets on one side and Europe, Asia and the Americas on the other – a region worth an estimated USD 7.4 trillion in annual trade.

Legal Structures available

The Dubai International Financial Centre (DIFC) provides attractive legal structures unavailable elsewhere in the region, making it ideal for corporate management offices and other corporate entities, including Single Family Offices, Holding Companies, Proprietary Investment Companies, Special Purpose Companies and Intermediate Special Purpose Vehicles.

Specific Advantages:

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.

TAX BENEFITS:

  • Zero tax for 50 years on profits, capital or assets from 2004.
  • Zero tax on employee income.

COUNTERPARTY CONFIDENCE:

  • Highly regarded, independent regulator.
  • Independent, English-speaking, common law judicial system.
  • Distinct from the UAE legal system.
  • Risk-based regulatory approach.

DIVERSE ECOSYSTEM:

  • 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.

GEOGRAPHIC EPICENTRE:

  • 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.

Types of Corporate Offices

The DIFC also offers a wide range of corporate office structures, as below:

MANAGEMENT OFFICE OR CORPORATE HEADQUARTERS:

This is a legal entity that provides strategic leadership, oversight, management, and administration of regional or international operations of entities. Many multinational companies prefer establishing their corporate offices in the DIFC due to the familiarity of Common Law and convenience of doing business.

Such an entity can also perform back-office support such as treasury, legal and compliance services.

HOLDING COMPANY

DIFC holding companies can be used to hold assets within the UAE, the GCC, or anywhere else in the world. These include real property and shares in other companies in the UAE and worldwide.

You can read our detailed article on setting up holding companies in the DIFC here.

https://10leaves.ae/publications/difc/setting-up-a-holding-company-in-the-difc

Also watch our short video on holding companies in the DIFC.

https://www.youtube.com/watch?v=3gyZ4CV0_wk

PROPRIETARY INVESTMENT COMPANY

DIFC Proprietary Investment Companies are suitable for direct investments, acquisitions, joint ventures or partnerships. They are also appropriate for investments in private equity, other alternative investment funds or assets. Investments may not be limited to a specific industry and can be from the commercial, education, healthcare, industrial and oil & gas sectors.

INTERMEDIATE SPECIAL PURPOSE VEHICLES

  • Simple, cost-effective, efficient means to hold and ring fence certain assets
  • May be established by DIFC Incorporated Funds, Holding Companies, Proprietary Investment Companies and Single Family Offices, as well as any entity holding assets for a foreign fund managed by a DFSA-regulated fund manager

SPECIAL PURPOSE COMPANIES

  • Established to arrange specific structured financial transactions
  • Structures provided for a multitude of industries and business types
  • Open only for use by a DIFC-registered Trustee of an Investment Trust, Investment Company or Investment Partnership
  • Holds the property of relevant fund(s)
  • Cannot offer financial services

SINGLE FAMILY OFFICE

  • Patriarch or family can structure the ownership and allocation of owned assets in a highly flexible and specific manner
  • Beneficial owners must be members of a single family
  • Able to manage family philanthropic activities
  • Can provide non-financial services, such as concierge services, to family members

Special Legislation

DIFC is the only jurisdiction in the region to offer a diverse collection of world-class laws that facilitate wide flexibility in corporate and family activities. The applicable laws include:

SINGLE-FAMILY OFFICE LAW

SPECIAL PURPOSE COMPANY LAW

DIFC TRUST LAW

  • The only Trust Law in the MENA region
  • Individuals and families can establish common law trust mechanisms to hold and manage assets
  • Provides flexibility to ensure the wishes of settlors are met
  • Delivers clarity in succession planning

Fast-track application process

These entities are not subject to regulation by the DFSA, and are authorised directly by the DIFC Registrar of Companies. The process, although detailed, is smooth and efficient.

Conclusion

The DIFC is a premier destination to live and work and brings with it several advantages and efficiencies. Setting up a company in the DIFC allows companies to have a base in Dubai and cater to the expanding MENASA market. The DIFC District has matured into more than just a place to work – it is now a lifestyle destination, with retail outlets, cafes and restaurants, art galleries, residential apartments, public green areas and hotels dotting the landscape.

Lets get started!

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