Dubai International Financial Centre (DIFC) is one of the topmost financial centres in the Middle East, Africa, and South Asia region. With a workforce of 25,600 and 2,584 registered companies, DIFC is a leading financial hub. Dubai Financial Services Authority (DFSA) regulates all the activities and grants licenses in DIFC.
It has been facilitating trade and investment flows for a period of 15 years now. It has a judicial system, which is independent and internationally recognized. The DIFC aims to drive the future of finance.
Dubai International Financial Centre (DIFC) Benefits
The various benefits enjoyed at DIFC include:
- Strategic location
- Tax-friendly regime
- World-class regulatory environment
- Unique legal framework
- 100% ownership of business permitted
- No restrictions on capital and profits repatriation
- No currency exchange controls and restrictions
DIFC Company Formation Process
The companies that are looking to setup and conduct business in DIFC need to apply for the registration or incorporation of a DIFC entity. This is done by submission of the relevant application to the Registrar of Companies (ROC). The ROC advises, receives, reviews, and processes all the applications. The ROC then provides a detailed checklist of all the required forms and supporting documents that are to be submitted by the applicant.
General Partnership Law, Companies Law, and Limited Liability Partnership Law determine the structure of the entity of the registrant. The Registrar of Companies then issues a Commercial License and Certificate of Registration, Incorporation, or Continuation.
The various areas of business in the DIFC are banking, private banking, investment banking, brokerage, capital markets, innovation license, insurance, reinsurance and captives, fund management, asset management, wealth management, private equity, corporate offices, professional service providers, Islamic finance, fintech, retail and convenience, cafes and restaurants and art galleries.
Based on the areas of business, the business types can be divided into two broad categories
1. Financial Business
Most of the DIFC’s client portfolio is made up of regulated entities since they provide a fully-supported financial regulatory system. The businesses that are interested in setting up their base in DIFC are required to submit an application to the regulatory body of DIFC, the Dubai Financial Services Authority (DFSA). DFSA considers the capabilities and the suitability of the applicant, along with the category of license for which the application has been made.
Before starting the registration process for an applicant, an introductory meeting is held with the Dubai Financial Services Authority (DFSA), and a Letter of Intent (LOI) is filed with the Dubai International Financial Centre (DIFC). After a formal review of the application by DFSA, the applicant has to lodge the full application along with a Regulatory Business Plan. DFSA conducts an initial review of the application and the documents to ensure that they are in good order and suffice the conditions laid by the DFSA. Then it carries out its own due diligence and enters into an ongoing dialogue with the applicant.
After the issuance of the In-Principal Approval, the applicant must do the following:
– Ensure the registration or incorporation of the entity with the Dubai International Financial Centre Registrar of Companies
– Open a local bank account and provide the DFSA with proof of the capital remittance
– Provide evidence of the office space from which it will be conducting its financial activities.
On fulfillment of all the conditions, DFSA grants the license to the applicant.
2. Non-Financial Business
While the core activities might concern the finance and banking sector, DIFC provides a broader base of other economic activities. Regulated professional services companies establish their base in the DIFC to operate in the areas of accountancy, law, and some other non-financial and non-regulated businesses.
These entities generally perform two important roles. Firstly, they provide financial firms with a variety of goods and services that are needed to operate effectively and efficiently. For example, consultancy, legal translation services, courier, and printing. Secondly, they help in creating a lifestyle and leisure environment that finance professionals expect from international financial centres. The professionals require a variety of good services before, after, and during working hours. Electronics and apparel, salons and fitness, tailors, gyms, restaurants, and cafes ranging from casual to fine dining and retail shops are some of the examples.
The DIFC has a Registrar of Companies that facilitates the company formation process. The types of companies that can be setup are as follows:
– Under the Companies Law, the companies that can be formed include Company Limited by Shares (LTD), Limited Liability Company (LLC), or a branch of an already existing foreign company.
– Under the Limited Liability Partnership Law, a Limited Liability Partnership (LLP) or a branch of an already existing foreign Limited Liability Partnership can be established.
– Under the General Partnership Law, a General Partnership (GP) or a branch of an already existing foreign general partnership (RP) can be formed.
– Under the Limited Partnership Law, a Limited Partnership (LP) or a branch of an already existing limited partnership (RLP) can be established.
There are various types of office spaces available at DIFC for companies to choose from. These are commercial office spaces, co-working spaces, retail spaces, business centres, event spaces, and data centres.
Some of the features of the business centre are the provision of conferencing and meeting facilities, 24-hour security, hot and cold beverages, communication tools, mail receipt and distribution, storage space, IT support, housekeeping, instant internet, and telecom connectivity.
The regulating authorities at DIFC are:
- Dubai Financial Services Authority (DFSA)
- Dubai International Financial Centre Courts
Frequently Asked Questions
The Work Hub is open to three types of firms, and they are- Fintech Firms, InsurTech Firms, and RegTech Firms.
To join the DIFC Work Hub, the requirements are first discussed with a DIFC Business Development Team, then the applications and documents are submitted, and finally, approvals for licenses and visas are obtained.
The legislative framework is based on the Principles of Common Law and International Standards.
Foreign Account Tax Compliance Act is an account used to target non-compliance by the taxpayers in the US. The UAE Government has entered into a FATCA Inter-Governmental Agreement with the US.
We, at NR Doshi and Partners, have been offering company formation and setup services for more than 34 years now. We have an experienced team of business setup professionals on board with us who closely work with each of our clients.
We provide all the details that help you in making informed decisions and plan ahead for your company. Our clientele of 2500+ is a testimony to the expertise and rich experience that we have in this field. We can answer all your queries and help you make the process simpler and smoother.