23 Nov Dubai International Financial Center (DIFC) – Company Formation
Dubai International Financial Centre (DIFC) is one of the region’s most forward-thinking and prestigious financial centers. It is home to most of the leading global banks, eight of the ten leading international law firms, three of the top five insurance companies, and has the most Fintech companies in the MENA region.
With thousands of financial, legal, and insurance companies operating out of the Dubai International Financial Center (DIFC), it has created an incredible ecosystem where companies can engage and conduct business with regional and global companies. Moreover, with proximity to other well-established free zones such as Dubai Multi Commodities Centre (DMCC) , Jebel Ali Free Zone (JAFZA) , and Dubai Internet City (DIC) , you have access to a vast marketplace of ideas, resources, and talent.
Types of Companies can be formed in DIFC
Limited Liability Company (LLC)
An LLC is the most common type of company in DIFC, suitable for businesses of all sizes, including financial institutions and those offering corporate services. It offers the flexibility of a partnership structure with the benefits of limited liability for its shareholders. LLCs can be formed with a minimum of one shareholder and are required to have at least one manager.
Subsidiary of a Foreign Company
International companies can establish a subsidiary in DIFC, allowing them to expand their operations while maintaining their existing corporate structure. Subsidiaries are treated as separate legal entities and are subject to DIFC’s regulatory framework.
Branch Office (Representative Office)
For companies seeking a more temporary or limited presence in DIFC, a branch office or representative office can be established. These are extensions of the parent company and are not considered separate legal entities. They are typically used for representative or marketing purposes.
Other Company Types
DIFC also offers options like a Prescribed Company, Limited Partnership, Limited Liability Partnership, General Partnership, DIFC Holding Company (DIFC Foundation), and Offshore Company Formation. These cater to specific business activities, corporate structuring needs, or financial services.
LLCs offer greater flexibility and autonomy, subsidiaries, branches, and other company types may be preferable for companies with an existing global presence, specific operational requirements, or those seeking to leverage the DIFC’s corporate tax advantages and business-friendly environment.
DIFC Company Formation: Why Get a DIFC License?
- 0% corporate income tax rate for forty years.
- State-of-the-art offices close to Burj Khalifa and Sheikh Zayed Road.
- The Dubai Financial Services Authority (DFSA), an independent regulator, grants licenses and regulates the activities of financial services .
- No restrictions on the repatriation of profits.
- No currency restrictions.
- A Common Law structure administered by an independent regulator and adjudicated by a well-recognized court system.
- DIFC companies qualify for a Tax Residency Certificate to benefit from the UAE’s double tax treaty network.
- Awarded best ‘International Finance Centre’ by Wealth Briefing European Awards
- Awarded “Dubai Quality Award in Recognition of Business Excellence” by the Department of Economic Development (DED) in Dubai .
Dubai International Financial Center Entities
- DIFC Registration Authority (DIFCA) – Registrar that handles all business incorporation and renewal matters.
- Dubai Financial Services Authority (DFSA) – Independent regulator of financial services conducted in or from the Dubai International Financial Center (DIFC).
- Dispute Resolution Authority (DRA) – Comprised of the Academy of Law, the DIFC Wills & Probate Registry, and the DIFC-LCIA Arbitration Centre with the purpose to resolve commercial disputes.
- DIFC Courts – An independent English language common law court with jurisdiction governing civil and commercial disputes within DIFC.
DIFC License Types
DIFC has become a destination for businesses primarily in the financial, insurance, and legal sectors. Below are the various types of financial sector-regulated licenses issued by DIFC free zone and associated minimum capital requirements and fees.
Features Category 1Category 2Category 3ACategory 3BCategory 3CCategory 3DCategory 4Category 5DescriptionAccepting deposits.
Managing a profit-sharing account.
Principal investor.
Providing credit.
Dealing with investments as a principal.
Dealing in investments as an agent.
Acting as trustee of a fund Managing a collective investment fund.
Managing assets,
Operating a payment account.
Executing payment transactions.
Arranging credit.
Advising on financial products.
Islamic financial institution Minimum Capital Required$10,000,000$2,000,000$500,000$4,000,000$500,000$200,000$10,000$10,000,000
Also, do check how to obtain the following DIFC licenses in Dubai
DFSA Fees for Licensing
Accepting Deposits or Providing Credit.$70,000Dealing in Investments as Principal$40,000Effecting Contracts of Insurance or Carrying Out Contracts of Insurance$40,000Managing a Collective Investment Fund if any Fund to be managed is:
(a) a Credit Fund; or
(b) a Fund other than a Qualified Investor Fund, a Venture Capital Fund, or an Investment Company managed by its Corporate Director.
$10,000Managing a Collective Investment Fund if the Funds to be managed will only be Qualified Investor Funds, except if any Fund is a Credit Fund or all of the Funds are Venture Capital Funds.$5,000Managing a Collective Investment Fund if the Funds to be managed consist only of Investment Companies managed by Corporate Directors and no Fund is a Credit Fund and the Funds are not all Venture Capital Funds.$5,000Managing a Collective Investment Fund if the only Funds to be managed are Venture Capital Funds.$2,000Dealing in Investments as a matched principal.$25,000Dealing in Investments as Agent.$25,000Managing Assets.$25,000Providing Custody.$25,000Providing Money Services$25,000Managing a Profit-Sharing Investment Account.$25,000Providing Trust Services (if it acts as trustee of one or more express trusts).$25,000Acting as the Trustee of a Fund.$25,000Arranging Deals in Investments.$15,000Advising on Financial Products.$15,000Arranging Custody.$15,000Insurance Intermediation.$15,000Insurance Management.$15,000Providing Trust Services (if it does not act as trustee of any express trust).$15,000Operating a Credit Rating Agency.$10,000Effecting Contracts of Insurance or Carrying Out Contracts of Insurance as a Captive Insurer or as an ISPV.$5,500Effecting Contracts of Insurance or Carrying Out Contracts of Insurance as a PCC:(a) for the core; and$8,000(b) for each cell$1,000Providing Fund Administration.$15,000Arranging Credit and Advising on Credit.$15,000Providing Money Services (if it does not issue Stored Value and does not only provide Money Transmission).$15,000Providing Money Services (if it only provides Money Transmission)$10,000Operating a Crowdfunding Platform.$5,000Arranging or Advising on Money Services$5,000Operating an Employee Money Purchase Scheme.$20,000
Please click here for details on non-financial business activities allowed within the free zone. In addition, you can find the latest complete list of fees on the DIFC schedule of fees page.
Procedure to Start a Financial Company via Dubai International Financial Center
Here are the steps to conduct the DIFC company setup:
1) Book an introductory meeting with the DIFC and DFSA. Next, a Letter of Intent (LOI) is required to indicate the qualifying purpose and scope of your business. Once the regulator reviews the submission, the applicant is either provided the clearance to lodge a complete application or asked for further information on their venture.
2) DFSA reviews the application documents and carries out due diligence checks.
3) If everything clears, an “In-Principal Approval” letter is issued. The applicant is required to complete the following:
- Incorporation of the entity with the DIFC Registrar of Companies;
- Open a local bank account and remit the applicable capital;
- Appoint a DIFC-recognized auditor ;
- Acquire office space within DIFC.
4) Once the above conditions are satisfied, the DFSA grants a full license. Conditions and requirements for application processes vary depending on the type of regulated entity.
Special Purpose Vehicle
Dubai International Financial Center (DIFC) offers an SPV regime to separate risks by ring-fencing assets and liabilities. The incorporation costs are low compared to a typical holding company in the DIFC , with an application fee of only $1,000 and the annual commercial license fee of $3,000 without any requirement for a dedicated office. In addition, SPVs only expose assets related to a business deal or project to its liabilities. Please speak to our team for more details on DIFC SPVs.
Professional Services to Launch Your DIFC Company
Our team has assisted many entities in setting up their businesses within DIFC. So let us be your one-stop solution for DIFC company formation services.
Our experienced consultants have in-depth knowledge of DIFC’s regulations, processes, and requirements set by the DIFC Authority and they can streamline the formation process, ensuring compliance and minimizing potential delays or complications.
We can tailor the services to meet your specific needs, whether it’s a DIFC business setup, corporate structuring, or accessing the DIFC Innovation Hub. Our expertise can provide you peace of mind and ensure a smooth transition into the DIFC business landscape, whether you’re operating from the UAE mainland, Dubai mainland, or South Asia.
If you seek comprehensive expert advice, don’t hesitate to contact us for professional assistance.
Also, don’t forget to check out the comparison between Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM)
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