Doing business in Dubai International Financial Centre in 2024
Dubai International Financial Centre (DIFC) is a global financial centre and wealth advisory hub in the Middle East, Africa, and South Asia which has boosted Dubai’s status as a financial hub.
It posted a net profit of US$203 million up by 45% in 2023. DIFC saw 34% growth in new registrations last year, spurred by demand from companies in a broader range of sectors and new industries. The total number of active companies stood at 5,523 at the end of 2023.
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Advantages of DIFC company registration
- DIFC FinTech Hive – mentorship to investors at every stage: DIFC FinTech Hive offers mentorship, guidance, and access to investors, contributing to an attractive environment for innovation and entrepreneurship in the Fintech sector. The collaboration ensures that the accelerator programs are industry driven and directly address the financial sector needs of the region.
- The DIFC Innovation Licence is a commercial licence with a subsidised fee structure designed to support technology and innovation firms at any stage of their growth. DIFC Innovation Licence is subsidised for a period of two to five years at a rate of US$1,500 per annum and gives you access to co working space and discounted visas. It is the largest financial innovation ecosystem in the region, with more than 700 innovation and tech firms.
- Enjoy high reputation: The DIFC is one of the only two financial free zones in the UAE that has a specialised focus on financial services, governed by a dedicated financial services regulator and an independent legal system. DIFC currently houses 17 of the top 20 banks in the world and seven of the top global law firms.
- Independent Regulatory Framework: DIFC operates under a unique legal framework consisting of civil and commercial laws and courts, including a common law framework directly applied to English law. While other free zones also offer regulatory benefits, they typically do not possess a separate legal system. Businesses in these zones are generally subject to UAE commercial laws and regulations. This sets them apart from DIFC. All pertinent laws, which have been largely codified and adjusted to meet changing business demands both locally and internationally, are included in the UAE civil law system practiced in DIFC.
- 100% foreign ownership: DIFC shares the feature of 100% foreign ownership with other Dubai free zones. This is different from establishing a financial services firm in the Dubai mainland, where only part foreign ownership is permitted.
- Presence of Global Financial Exchange: DIFC hosts the Dubai International Financial Exchange (now known as NASDAQ Dubai), which allows for the listing and trading of shares, bonds, and other financial instruments. It provides a platform for international and regional investors to access a diversified range of investment products. Other free zones in Dubai do not typically host financial exchanges. They focus more on providing office space, warehousing, and other facilities specific to their industry.
- DIFC’s latest Family Arrangement Regulations are aimed at providing a strategic approach to ensure family’s wealth is safeguarded and managed well to minimise potential conflicts and inefficiencies. The regulations help families tailor plans to fit their unique situations, making it a compelling choice for securing your family’s financial future.
- No restrictions on capital repatriation: While the feature of unrestricted capital repatriation is not unique to DIFC among Dubai’s free zones, its role as a premier financial centre amplifies the significance of this advantage.
- DIFC has no currency exchange control
- Prescribed companies are exempted from filing financial statements, conducting an annual audit and renting its own office space.
- Attractive tax regime: DIFC offers several tax benefits. For example, there is no withholding tax on dividends, interest, or royalties paid by companies in the DIFC. This can be particularly advantageous for businesses that have international operations or rely on cross border transactions.
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Disadvantages of DIFC company registration
- Expensive: Regulated companies planning to establish their presence in the DIFC should budget to spend between US$40,000 to US$80,000 before they are operational.
- Depending on the licence category, base capital varies from US$10,000 to US$10 million.
- Companies engaged in relevant activities must meet these economic substance requirements. Failure to file a notification can result in AED 20,000 penalty.
- All companies must i) create and maintain a register of their ultimate beneficial ownership (UBO) and ii) submit UBO data to the relevant registrar or licensing authority, failure to comply with the regulations may result in a fine of up to USD 25,000.
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What industries is DIFC ideal for?
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Financial Services
- DIFC is a compelling option in the financial sector with many companies operating in key economic areas such as corporate banking, phone banking, investment banking, brokerage, and capital markets. It is designed to support the needs of the banking and capital markets, providing a sophisticated infrastructure that allows growth and innovation in these fields.
- Under the wealth and asset management, DIFC has carved out significant focus areas, including fund management, private equity, hedge funds, and venture capital firms. The centre’s strategic initiatives aim to cater to the growing demand for specialist fund management services. DIFC has nine of the top 20 wealth and asset management firms.
- The insurance industry, including reinsurance and captive insurance, finds a strategic partner in DIFC, which provides a conducive environment for growth and expansion. DIFC has 5 of the top 10 global insurance and reinsurance companies.
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FinTech and Innovation
- Initially targeting Fintech players through the DIFC Fintech Hive, the benefits of startup licences were extended to include a broader spectrum of tech startups—Education technology (EdTech), Regulatory Technology (RegTech), and all technology-based enterprises. Over 700 innovation licenses are currently operating from the DIFC.
- DIFC has started offering commercial licences to artificial intelligence (AI) and Web3 businesses at a 90% subsidy as it works to create the largest cluster of new-age tech companies in the Middle East and North Africa region.
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Prescribed companies
A prescribed company is ideal for holding companies, managing office and/or proprietary investments. It is cheap and easy to set up but can only be registered by a qualified applicant or for a qualified purpose.
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Retail and other professional service providers
DIFC is the ideal hub for corporates and professional service providers. The Centre not only gives access to a market of leading financial and non-financial firms, but it also offers a stable and efficient platform to manage regional activity. Some of the activities are listed below:
- Accountants
- Legal consultants
- Management consultancies
- Restaurants and coffee shops
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Financial entities business setup
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Financial companies’ comparison table
Financial activities permitted in DIFC are divided into 5 Categories, each with different Government fees and capital requirements.
Note that additional capital requirements may be imposed by Dubai Financial Services Authority (DFSA) on the review of the application.
*Indicative fee structure is subject to change. For latest fees, visit DFSA and DIFC.
Each of the financial companies must appoint:
- 2 Directors
- Senior Executive Officer. Can be a director resident in the UAE. The role cannot be outsourced.
- Risk Officer
- Finance Officer (can be a director or senior manager)
- UAE resident Money Laundering Officer’s Report (MLRO)
- UAE compliance officer. It can be the same person as the MLRO
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Steps to register a financial business in DIFC
Healy Consultants Group will project manage the A to Z of our client’s DIFC company formation. Our client must travel to Dubai for a day before the licence is issued and a bank account is opened. Securing a licence for DIFC takes approximately eight months and the steps are listed below:
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Pre-incorporation steps – 1.5 months to 3 months
- Consultation phase: Before starting the DIFC company incorporation process, our client explains their existing and proposed business activities, business goals, and requirements for the new entity. Healy Consultants Group and our client plan the optimal structure for the entity and agree on i) engagement fees payable ii) potential licensing requirements and iii) details of directors and share allocation;
- Planning phase: Our firm takes all information provided to plan the process in detail, including i) Dubai business incorporation, ii) multi-currency corporate bank account opening and iii) securing applicable licenses. This phase sets client expectations and seeks to minimise disruption until project completion. Our deliverable is a step-by-step project plan.
- Business plan and financial projections, Letter of Intent (LoI) and initial assessment by the authorities: As per the client’s information, our incorporation team i) drafts a detailed business plan, ii) drafts a Letter of Intent (LoI), and iii) requests a meeting with DIFC authority and DFSA. During this first meeting, the authority will informally review the application and consider the applicant’s suitability and the licence category. The authority will also supply a list of required documents to Healy Consultants Group.
- Document preparation: Our Dubai incorporation team gathers all documents required to submit a quality application to DIFC.
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Incorporation steps – 6 months to 8 months
- Document submission: Healy Consultants Group submits the quality incorporation application online.
- In-Principle approval: Following a detailed review of the business plan, application and documents, DIFC authority i) confirms name reservation and ii) issues an In-Principle Approval Certificate. Note that it is usual for the authorities to revert multiple times during this pre-approval stage, requesting additional documents and information. Consequently, the process usually takes a minimum of four months. Once In-principle approval is issued, it is valid for three months.
- Document attestation: We supply our client with a complete list of documents that require attestation at the UAE embassy in the country of origin. We assist them in documents submission as well.
- Entity registration: The attested documents and the In-Principle Approval Certificate are submitted to the Registrar of Companies (ROC). The ROC issues a provisional Certificate of Incorporation;
- Bank account and deposit of capital: Our banking team assists the client to open a Dubai corporate bank account for their business within five weeks. It is compulsory for the client to travel to Dubai for an hour-long interview with the bank officer before opening the account. Immediately, after getting the corporate bank account number, our client deposits the paid-up share capital.
- Office premises: Simultaneously with the step above, we assist our client in locating office space and signing a year’s long lease agreement. This step is necessary before the licence. Fortunately, DIFC offers a wide range of office options. From co working space to business centres, DIFC caters to all the clients with relevant options.
- License issuance: Within one week of Healy Consultants Group submitting to DIFC and DFSA i) a certificate of capital deposit ii) signed lease agreement, and iii) a payment slip for the payment of office rental fees, DIFC Authority issues the commercial licence. Our client can now conduct business in the UAE.
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Post incorporation steps – 1 month
- Additional registrations: Now that the company is fully incorporated, we can register the entity for Value Added Tax (VAT), Corporate Income Tax (CIT) and apply for employee visas;
- Registration completion: Following the receipt of all necessary approvals and documents, Healy Consultants Group couriers a complete company kit to our client, including original corporate documents, unopened bank correspondences, and a feedback survey to ensure client’s expectations were met during the entire engagement period.
- Statutory compliances: Our client must appoint a Dubai qualified auditor within one month of registration, submit quarterly VAT reports, and prepare annual audited financial statements. Depending on the business category, additional financial reporting may be needed.
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Prescribed companies
- A prescribed company is ideal for holding companies, managing office and/or holding proprietary investments.
- It is also ideal for succession planning, managing business continuity and ring-fencing assets.
- Prescribed companies can only be registered by a qualifying applicant or for a qualifying purpose.
- The estimated timeframe to register a prescribed entity is four weeks following issuance of corporate bank account numbers 8 to 10 weeks thereafter.
- The total engagement fees is US$22,349. Refer to the fee section below to see a complete breakdown;
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Activities permitted
- Holding Company
- Managing Office
- Proprietary Investment
- Investment in Real Estate
- Investment in Agricultural Enterprises & Management
- Investment in Commercial Enterprises & Management
- Investment in Educational Enterprises & Management
- Investment in Healthcare Enterprises & Development
- Investment in Industrial Enterprises & Management
- Investment in Oil & Natural Gas Project
- Investment in Retail Trade Enterprises & Management
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What does this imply for qualifying applicant or for a qualifying purpose?
Qualifying Applicant
Any of the following:
- A DIFC registered entity.
- A shareholder or an Ultimate Beneficial Owner that controls a DIFC registered entity.
- An affiliate of a DIFC registered entity.
- An authorised firm.
- A family operated business.
- A fund
- A government entity
- A person wholly owned by one or more of the foregoing qualifying applicants, and which satisfies the registrar that it or they will control the prescribed company.
Qualifying Purpose
- Aviation structure
- Maritime structure.
- Crowdfunding structure
- DIFC holding structure
- Structured financing
- Innovation holding structure
- Intellectual property structure
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How can Healy Consultants help?
We can help by:
- Preparing the regulatory business plan and application forms.
- Drafting the financial projections.
- Preparing policies and manuals related to Compliance and Anti Money Laundering.
- Helping you outsource the Financial Officer, Risk Officer, MLRO and Compliance officers.
- Assisting you locate office premises.
- Securing the company registration numbers and regulatory licenses.
- Opening a multi-currency corporate bank account;
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Fees
Click below for an estimated detailed breakdown of fees. These exclude paid-up share capital requirements (mentioned in business activity section above), officer appointments, creating manuals and policies, office rental, notarizations and attestations.
Type of entity License Type / use Setup fees (US$) Annual recurring fee (US$) Breakdown of fees Non-financial companies - US$57,888 US$32,803 View invoice PDF Holding companies - US$57,888 US$32,803 View invoice PDF Prescribed company - US$22,349 US$14,948 View invoice PDF Financial entities Category 1 Banks US$89,742 US$56,624 View invoice PDF Category 2 Market maker, provider of credit US$104,742 US$81,624 View invoice PDF Category 3A Brokerage
(forex, commodity and derivatives)US$89,742 US$56,624 View invoice PDF Category 3B Custodian and Employee Money Purchase Schemes US$84,742 US$46,624 View invoice PDF Category 3C Discretionary Asset Management
(Fund Manager) and issuer of stored valued
Managing client portfolios on a discretionary basis, under a client mandateUS$69,742 US$36,624 View invoice PDF Category 3D Money Service Business US$69,742 US$36,624 View invoice PDF Category 4 Investment Advisory
Non-discretionary asset management service, making recommendations and dealing on an execution only basisUS$79,742 US$46,623 View invoice PDF Category 5 Islamic Financial Institution Ask for a quote
