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.
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 WealthBriefing 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 free zone and associated minimum capital requirements and fees.
|Features||Category 1||Category 2||Category 3A||Category 3B||Category 3C||Category 3D||Category 4||Category 5|
Managing a profit-sharing account.
|Dealing with investments as a principal.
Dealing in investments as an agent.
|Acting as trustee of a fund||Managing a collective investment fund.
|Operating a payment account.
Executing payment transactions.
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.||$70,000|
|Dealing in Investments as Principal||$40,000|
|Effecting Contracts of Insurance or Carrying Out Contracts of Insurance||$40,000|
|Managing 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.
|Managing 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.||$5,000|
|Managing 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.||$5,000|
|Managing a Collective Investment Fund if the only Funds to be managed are Venture Capital Funds.||$2,000|
|Dealing in Investments as a matched principal.||$25,000|
|Dealing in Investments as Agent.||$25,000|
|Providing Money Services||$25,000|
|Managing a Profit-Sharing Investment Account.||$25,000|
|Providing Trust Services (if it acts as trustee of one or more express trusts).||$25,000|
|Acting as the Trustee of a Fund.||$25,000|
|Arranging Deals in Investments.||$15,000|
|Advising on Financial Products.||$15,000|
|Providing Trust Services (if it does not act as trustee of any express trust).||$15,000|
|Operating a Credit Rating Agency.||$10,000|
|Effecting Contracts of Insurance or Carrying Out Contracts of Insurance as a Captive Insurer or as an ISPV.||$5,500|
|Effecting Contracts of Insurance or Carrying Out Contracts of Insurance as a PCC:|
|(a) for the core; and||$8,000|
|(b) for each cell||$1,000|
|Providing Fund Administration.||$15,000|
|Arranging Credit and Advising on Credit.||$15,000|
|Providing Money Services (if it does not issue Stored Value and does not only provide Money Transmission).||$15,000|
|Providing Money Services (if it only provides Money Transmission)||$10,000|
|Operating a Crowdfunding Platform.||$5,000|
|Arranging or Advising on Money Services||$5,000|
|Operating an Employee Money Purchase Scheme.||$20,000|
Procedure to Start a Financial Company via Dubai International Financial Center
1) Book an introductory meeting with the DIFC and DFSA. Next, a Letter of Intent (LOI) is required to indicate the 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 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.
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)