Doing business in the Dubai International Financial Centre
The Dubai International Financial Centre (“DIFC”) is a financial free zone within the UAE with an independent civil and commercial legal framework based on International Standards and Principles of the English Common Law.
The DIFC provides an excellent regulatory environment for all the registered businesses. Furthermore, companies are entitled to benefit from i) freedom of capital and profit repatriation; ii) full exemption from corporate taxes for 40 years and iii) complete foreign ownership.
The core businesses in the DIFC evolve around regulated activities related to i) banking; ii) investment; iii) asset and wealth management and iv) finance. However, it is also possible to register non-regulated and non-financial businesses like retail and convenience stores, restaurants as well as art galleries within this UAE free zone. Refer to the complete list of business activities below:
Areas of business
Banking Brokerage Fund management Private banking Capital Markets Asset management Investment banking Insurance, reinsurance & captives Wealth management Private Equity Islamic finance
The financial activities that are permitted in DIFC are divided into 5 Categories as follows. Each Category has different Government fees and capital requirements.
Category 1 Category 2 Category 3A Category 3B Category 3C Category 4 Category 5 Accepting Deposits Dealing in Investments as Principal (Not as Matched Principal) Dealing in Investments as Principal (Only as a Matched Principal) Providing Custody (Only if for a fund) Managing a Collective Investment Fund Arranging Credit or Deals in Investment An Islamic Financial Institution whose entire business is conducted in accordance with Shari’a and Which Manages a Profit Sharing Investment Account Managing a PSIAu Providing Credit Dealing as agent Acting as the Trustee of a Fund Managing Assets Advising on Financial Products or credit Arranging Custody Providing Trust Services as a Trustee of an Express Trust Insurance Intermediation Managing a PSIAr Insurance Management Providing Custody (other than for a fund) Operating an alternative Trading System Providing Fund Administration Providing Trust services other than as a trustee of an express trust Operating a Crowdfunding Platform
Government fees and capital requirements
Financial Services (in US$) Registration
(Annual Recurring Fee)
Data Protection Fee DFSA Application DFSA Annual Renewal Fees Base Capital Requirements Category 1 & 5 $8,000 $12,000 $1,000 $70,000 $70,000 $10 million * Category 2 $8,000 $12,000 $1,000 $40,000 $40,000 $2 million * Category 3A&3 C $8,000 $12,000 $1,000 $25,000 $25,000 $500,000 * Category 3B $8,000 $12,000 $1,000 $25,000 $25,000 $4 million* Category 4 $8,000 $12,000 $1,000 $15,000 $15,000 $10,000 * Category 4 (Crowdfunding platform) $8,000 $12,000 $1,000 $5,000 $10,000 $140,000
Areas of business
Brokers Consultancies Service Providers Product Providers Labor Recruitment Brokerage Office Services Computer Consultancies Advertisement Designing & Producing Antiques & Rare Collections Repaire Leasing Property Brokerage Agents Facilities Management Consultancy Antiques & Rare Collections Repaire Auction Hall Feasibility Studies Consultancies Art Gallery Baby Food Trading Financial Analysis & Consultancy Auctions Organizing Beauty & Personal Care Equipment Trading Human Resources Consultancies Award Rendering Program Beauty & Personal Care Requisites Trading Information Studies & Consultancies Beauty Salon Training Center Body Building Club Internet Consultancy Building Cleaning Services Books Binding Management Consultancies Building Maintenance Books, Newspapers & Publications Trading Marketing Research & Consultancies Businessmen Services Caffeteria Network Consultancies Car Park Rental & Management Calligraphers Project Development Consultant Cards & Envelops Printing Car Rental Quality & Standardization Consultants Carpets & textiles mending Carpets Trading Sourcing & Procurement Consultant Carpets Cleaning Coffee Shop Tourism and Recreation Consultants Cloth Pressing Services Computer & Data Processing Requisites Trading College Computer Electric Accessories Trading Communication Engineering Services Computer Equipment & Requisites Trading Community College Computer Software Trading Compliance & Risk Management Confectionary & Chocolate Trading Computer Graphic Design Services Cutlery & Silverware Trading Computer Software House Dates Trading Conferences & Seminars Organizing Distribution of Advertising Materials & Samples Cost Control & Risk Management Services Dried Vegetables & Fruit Trading Customer Care Centre Educational Aids Trading Data Entry Services Electronic Precision Instruments Trading Design & Artwork Services Flowers & ornamental Plants Trading Dieting & Weight Control Services Food & Beverages Trading Documents Clearing Services Gifts & Jewellery Box Making Documents Copying Services Gifts Trading Documents Transport Grocery Store Dry Cleaning Services Handbags & Leather Products Trading Education & Training Computer Software Health Food Trading Education Institute Ice Cream Shop Educational Facilities Management Services Ice Cream Trading Educational Technologies Research & Development Illustrated Magazines & Catalogues Trading Electrical Fitting Contracting Imitation Jewellery Trading Electronic Chips programming Invitation & Greeting Cards Trading Electronic Management Jewellery Trading Employment Agency Juice & Soft Drinks Shop Event Management Mini Store Fabrics, textiles & readymade garments screen printing Mobile Phones Trading Fashion Designing Novelties Trading Five Stars Hotel Nuts Trading Four Stars Hotel Oriental Carpets Trading Foreign Language Institute Paintings & Frames Trading Full Service Postal Agency Para Pharmaceutical Products Trading Fund Administration Fund Administration General Clinic Pearls & Precious Stones Trading Gents Cosmetic & Personal Care Perfumes & Cosmetics Trading Gents Haircutting & Hairdressing Salon Pharmacy Gents Spa Club Readymade Garments Trading Gents Tailoring Restaurant Gents Wears Tailoring & Embroidery Workshop Restaurant & mini store Gift Wrapping service Roastery Government Liaison Office Sandwich Shop Hotel Apartments Rental Sculpture & Beautification Elements Works For Private Shows Hotel Consultants Selling Commodities By Automatic Vending Machines Hotel Management Shoe Trading Interior Decoration Smoking Requisites Trading Internal Communication Network Installation & Maintenance Snack Food Trading Internet Content Provider Soap & Hair Care Products Trading Internet Services Spectacles & Contact Lenses Trading IT Infrastructure Stationery , Drawing & Writing Instruments Trading Jewellery repairing Suitcases & travel requisites trading Ladies Cosmetic & Personal Care Sunglasses trading Ladies Gown's tailoring Supermarket Ladies Haircutting & Hair Dressing Telephones & Telecommunications Equipment Trading Ladies Physical fitness club Textile Trading Ladies Oriental Bath Tobacco & Cigarettes Trading Ladies Tailoring Tobacco Trading Laundry Services Trees Seedings, ornamental plants & annual flowers trading Legal Translation Used Jewellery trading Letters & Post Items Delivery Vegetables & Fruit Trading Management Services Watches & Clocks & Spare Parts Trading Managing Office Marketing Management Meditation centre Men physical fitness club Nursery Office Of International Organization On Demand Labors Supply Services Operations & Security Control Center Parcels Delivery Plastic Cards Printing Poly Clinic Portal Portal Building Promotional Gifts Preparing Property Guard & Surveillance Services Proprietary Investment Company Proprietary Investments Public Networking Services Public Relations Management Real Estate Management Supervision Services Restaurants Management Self-Owned Property Leasing & Management Services Shoe Making Shoe Polishing Shoe Repairing Social Club Specialized Professional Institute Sports & Recreational Club Sub- Postal agency Testing Center Three Stars Hotel Tour and Travel Agency Tourism Guidance Services Translation Services Travel agent Typing & Photocopying Services University Valet Parking Services Watches & Clocks Repairing Web-Design
Non-financial businesses requiring DFSA registration
- Non-financial firms which fall under the category of “Designated Non-Financial Business or Profession (DNFBP)” will need to register with the DFSA. This process will take 2 months;
- Business activities that fall under the DNFBP category are: i) Real estate developers and agents; ii) dealers in precious metals and/or stones; iii) dealers of products with saleable price equal to or greater than US$15,000; iv) law firms, notary firms and other legal businesses; v) accounting, audit or insolvency firms; vi) company service providers and vii) single-family offices;
DIFC rules and regulations
Several institutions have been created to provide autonomy to the DIFC: i) an independent judicial system governed by the Dispute Resolution Authority (DRA) and DIFC Courts, that have jurisdiction over all disputes arising within the DIFC; ii) the Dubai Financial Services Authority (“DFSA”) which is in charge of regulating, supervising and monitoring all banking and financial institutions; and iii) the DIFC Authority, responsible for development and administration of laws and regulations for non-financial businesses;
Steps to register a financial business in the DIFC
Healy Consultants Group PLC will project manage the A to Z of our Client’s DIFC company formation. Unfortunately, our Client will need to travel to Dubai for 1 day, before the license is issued, and the bank account is opened. Securing a license for the DIFC takes approximately 8 months as follows:
Pre-incorporation steps – 1.5 months
- Consultation phase: Prior to starting the DIFC company incorporation process, our Client explains their existing and proposed business activities and business goals as well as their requirements for their new entity. Healy Consultants Group PLC and our Client plan the optimal structure for the entity to be setup and agree on the i) fees payable for the engagement; ii) potential licensing requirements and iii) details of the directors and the share allocation;
- Planning phase: At this point, our Firm takes all the information provided to plan the process in detail from the beginning till the end of the engagement, including i) Dubai business incorporation; ii) multi-currency corporate bank account opening; and iv) securing applicable licenses, thereby increasing transparency as well as setting Client expectations and minimizing disruption to project completion. Our deliverable is a detailed project plan (click to see an example) mapping out the step by step details of this engagement;
- Business plan, LOI and initial assessment by the Authorities: With the information supplied by the Client, our Incorporation Team i) drafts a detailed business plan; ii) drafts a Letter of Intent (LOI) and iii) requests a meeting with the DIFC Authority and the DFSA. During this first meeting, the Authority will informally review the application and consider the suitability of the applicant and the category of license for which the application is made. A list of required documents is supplied to Healy Consultants Group PLC;
- Document preparation: Next, our Dubai Incorporation Team gathers all the documents required to submit a quality incorporation application to the DIFC;
Incorporation steps – 6 months
- Document submission: Healy Consultants Group PLC prepares a complete quality incorporation application and lodges the same online;
- In-Principle approval: Following a detailed review of the business plan, the application and documents supplied, the Authority i) confirms name reservation and ii) issues an in-principle approval. Note that it is usual for the authorities to revert multiple times during this pre-approval stage requesting for additional documents and information. Consequently, the process usually takes a minimum of 4 months. Once the In-principle approval is issued, it has a validity of 3 months;
- Document attestation: Thereafter, we supply our Client a complete list of documents that require the UAE embassy’s attestation in the country of origin and assist our Client to submit them in a timely manner;
- Entity registration: The attested documents together with 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 our Client to open a Dubai corporate bank account for their business within 5 weeks. Unfortunately, our Client must travel to Dubai for a one-hour interview with the bank officer, before the account is opened. Immediately after the corporate bank account is issued, our Client deposits the paid-up share capital;
- Office premises: Simultaneously with the step above, we assist our Client to locate office space and sign a 12 months lease agreement, necessary before the license is issued. It is important for our Client to sign a lease agreement for office premises located within the Free Zone. Fortunately, the DIFC offers a wide range of office options ranging from co-working space to business centers, retail space, and commercial office space;
- License issuance: Within 1 week from the moment Healy Consultants Group PLC submits to the DIFC and the DFSA i) a certificate of capital deposit; ii) the signed lease agreement and iii) the payment slip for the payment of the office rental fees. The Authorities then issue the commercial license. Our Client can now conduct business in the UAE;
Post incorporation steps
- Additional registrations: Now that the company is fully incorporated, we can register the entity for VAT and apply for employee visas;
- Registration completion: Following the receipt of all necessary approvals and documents, Healy Consultants Group PLC couriers a full company kit to our Client, including original corporate documents, unopened bank correspondences, and lastly a Client feedback survey to make sure that all the Client expectations were met during the entire engagement period.
- Statutory compliances: Following our Client’s Dubai registration, our Client must appoint a Dubai qualified auditor within 1 month of registration and submit quarterly VAT reports and prepare annual audited financial statements. Depending on the business category, additional financial reportings may be needed.
The estimated total engagement fee for a DIFC company engaged in financial services amounts to US$56,700.
Please refer to our invoice for a detailed breakdown of the fees. Kindly note that this fee excludes the DFSA application fee and the paid-up share capital requirements (both mentioned in the business activity section above);
The estimated total engagement fee for a DIFC company engaged in non-financial services amounts to US$45,500. Please refer to our invoice for a detailed breakdown of the fees.