Dubai International Financial Centre (DIFC), strategically located in the heart of Dubai, has emerged as a leading financial hub in the Middle East, offering a secure and efficient business infrastructure for financial companies. With its world-class facilities and common law framework, DIFC has become the preferred destination for international financial institutions looking to expand their regional presence.
Established in 2004, with its three financial independent authorities- Dubai Financial Services Authority (DFSA), Dubai International Financial Center Authority (DIFCA) and DIFC Courts, under common law, the DIFC offer highly professional business solutions, growing rapidly into a thriving ecosystem for financial and non-financial businesses, attracting global investors, corporations, and professionals alike.
The major financial activity sectors in the DIFC are the capital market, banks, wealth and asset management, corporate offices, insurance and reinsurance, and professional services.
DIFC offers a top-class regulatory environment under the Dubai Financial Services Authority (DFSA), the independent regulator of all financial activities within the jurisdiction. The regulatory body was developed on a primary model similar to that of major financial centres in London and New York.
The DFSA ensures that financial institutions operating in DIFC comply with international regulatory policies, fostering transparency and compliance with financial transactions. It also covers various financial services, including asset management, banking, credit services, securities trading, investment funds, and commodities trading.
The legislative system in DIFC is aligned with the English Common Law system, providing a unique set of commercial and civil laws for the regulations of financial services. With its autonomous judicial system, DIFC Courts administer and enforce justified resolutions of civil and commercial disputes within DIFC-registered companies and related bodies.
The DIFC boasts state-of-the-art infrastructure, with iconic skyscrapers housing many financial institutions, professional service firms, and multinational corporations. The centre provides a variety of world-class facilities with modern transport and infrastructure, including cutting-edge office spaces, conference centres, and an array of lifestyle amenities.
DIFC has a conducive environment that encourages collaboration and innovation within the financial community.
Setting up a business within the DIFC is a streamlined and efficient process. The centre offers a range of license categories to suit different business activities, making it an ideal destination for financial institutions, asset management companies, Fintech startups, and professional service providers. Furthermore, the DIFC provides extensive support services, easing the entry process for new companies and facilitating their growth.
DIFC companies can benefit from the full repatriation of capital and profit flows without restrictions. Also, they can utilise the no currency exchange controls within the US-dollar-denominated jurisdiction. DIFC offer businesses 40-year corporate income and profit tax exemptions.
Authorised firms are businesses involved in finance and banking activities. These companies are subject to the financial regulatory system of the DFSA.
Some business activities under authorised firms include managing assets, providing credit and money services, advising on financial products, insurance management, and fund administration.
Although DIFC focuses mainly on the financial sector, it provides access to broader economic activities. Non-financial businesses are that do not fall under the finance or banking category.
Some business activities under non-financial services include retail spaces, salons, gyms, tailors, wellness centres, cafes, and restaurants.
Minimum base capital requirement: US$ 10 million
Business Activities involved: Accepting deposits and managing unrestricted profit-sharing account
Staff appointment requirements: It depends on the scale and scope of their operations. Key appointments include a well-organised and diverse Board of Directors, a Senior Executive Officer (SEO), a Finance Officer (FO), a Chief Risk Officer, a Compliance Officer (CO), a Money-Laundering Reporting Officer (MLRO), and an Internal Auditor.
Minimum base capital requirement:US$ 2 million
Business Activities involved:Principal Investor/ providing credit
Staff appointment requirements:Similar to Category 1, Category 2 firms should have a diverse Board of Directors, an SEO, an FO, a Chief Risk Officer, a CO, an MLRO, and an Internal Auditor. The Chair of the Board must be a non-executive Director.
Minimum base capital requirement:US$ 500,000
Business Activities:Dealing with investments as a matched principal and agent.
Staff appointment requirements: Apart from the Board of Directors and key executive appointments mentioned in Category 1 and 2, Category 3A firms should also have a Risk Officer.
Minimum base capital requirement:US$ 4 million
Business Activities involved:Custody services for funds, act as trustees for funds, operate employee money purchase schemes, and act as administrators for such schemes.
Staff appointment requirements:The staffing requirements are similar to those of Category 2 firms.
Minimum base capital requirement:US$ 500,000 (It also varies with the type of business)
Business Activities involved:Managing assets, collective investment funds, providing trust services, custody and managing a profit-sharing investment account.
Staff appointment requirements:Category 3C firms require a diverse Board of Directors, an SEO, an FO, a Risk Officer, a CO, an MLRO, and an Internal Auditor.
Minimum base capital requirement: US$ 10,000
Business Activities involved: Arranging investment deals, arranging credit, advising on financial products, and operating crowdfunding platforms.
Staff appointment requirements: The staffing requirements for Category 4 firms are similar to those of Category 1 firms, with the addition of a Risk Officer for certain activities.
Minimum base capital requirement: US$ 10 million
Business Activities Involved: Category 5 firms focus on operating Islamic businesses that align with the principles of Sharia.
Staff appointment requirements: The staffing requirements are similar to those of Category 1 firms.
Ascent Partners is a boutique consulting firm located in Dubai, UAE. With unparalleled, extensive experience and proven track record of its founders and partners, we aim to advise and aid businesses to scale their presence in the country.
We believe that a well-planned foundation empowers businesses to scale. Our depth of knowledge in multiple jurisdictions and relevant experience helps us guide you throughout all strategic phases of your business, from licence registration and expansion to market flotation and exit.
We at Ascent Partners can help you establish your business with services and infrastructure tailored to your needs.