DIFC company formation services: start and grow your business in the most dynamic and independent international financial centre in UAE

What is DIFC and where is it located?

Dubai International Financial Centre (DIFC) is a wealth advisory hub in the Middle East, Africa, and South Asia (MEASA) region. This free zone is located in Dubai, UAE.

DIFC has a 20-year track record of facilitating trade and investment flows across MEASA. In 2023, DIFC posted a net profit of US$203 million and has 5,523 active companies.

It is the leading financial innovation hub with over 700 tech firms.

Contact us today to explore how we can support your business setup in DIFC.

DIFC company setup guide: Table of contents

Advantages and disadvantages of DIFC free zone company formation

The DIFC is one of the two financial free zones in the UAE. The following are the benefits of DIFC company setup:

Advantages of setting up company in DIFC free zone

1. DIFC FinTech Hive offers mentorship and guidance to investors. The accelerator programs are industry driven and address sectoral needs of the region.
2. The DIFC Innovation Licence offers a subsidized commercial licence to tech and innovation companies that support their growth. The companies pay only US$1,500 yearly for the licence which is valid for two to five years. It includes access to shared workspaces and visa discounts.
3. DIFC is regulated by a dedicated financial services authority and an independent legal system.
4. DIFC hosts 17 of the world’s top 20 banks and seven of the leading global law firms.
5. DIFC follows principles of a common law that is tailored to the region’s unique needs. It has a unique legal system like English law that includes civil and commercial laws system. Unlike other free zones, DIFC operates independently from UAE commercial laws that usually follow the Sharia Law.
6. DIFC shares the feature of 100% foreign ownership with other Dubai free zones and similarly, does not have repatriation or currency exchange controls.
7. DIFC is home to NASDAQ Dubai. It offers trading in shares, bonds, and various financial instruments.
8. DIFC’s new Family Arrangement Regulations focus on managing family wealth. In this regard DIFC has created the Foundation regulation. Foundations offers protection of family assets, effective succession planning, family governance and privacy for beneficiaries.
9. Prescribed companies are exempted from filing financial statements, conducting an annual audit and renting its own office space.
10. DIFC offers several tax benefits. For example, there is a 40-year corporate income tax holiday and no withholding tax on dividends, interest, or royalties paid by companies in DIFC.

Disadvantages of DIFC free zone company setup

The following are the drawbacks of DIFC company setup:

1. Regulated companies should budget to spend between US$50,000 to US$90,000 before they are operational.
2. Depending on the licence category, base capital for regulated activities varies from US$10,000 to US$10 million.
3. Companies engaged in relevant activities must meet these economic substance requirements. Failure to file a notification can result in AED 20,000 penalty.
4. 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 US$25,000.

What industries is DIFC free zone ideal for?

Financial Services

• DIFC stands out in the financial sector. It hosts firms in corporate banking, phone banking, investment banking, brokerage, and capital markets.
• Under wealth and asset management, DIFC focuses on fund management, private equity, hedge funds, and venture capital.
• DIFC is home to nine of the top 20 wealth and asset management firms.
• DIFC has 5 of the top 10 global insurance and reinsurance companies.

Financial activities permitted in DIFC are divided into 5 categories, each with different Government fees and capital requirements.

Category 1

License Type

Banks

Activities

1. Accepting deposits
2. Managing a Profit Sharing Investment Account (PSIAu)

Base Capital

US$10,000,000

Timeline to incorporate

8-11 months

Category 2

License Type

Market maker, provider of credit

Activities

1. Dealing in investments as principal (Not as matched principal)
2. Providing credit
3. Can conduct other financial services in other categories but not those from Category 1

Base Capital

US$2,000,000

Timeline to incorporate

8-11 months

Category 3A

License Type

Brokerage (forex, commodity, and derivatives)

Activities

1. Dealing in investments as principal where it does only so as a matched principle.
2. Dealing in investments as agent.
3. May be authorised to conduct other financial services found in Category 3C or 4.

Base Capital

US$500,000

Timeline to incorporate

9-11 months

Category 3B

License Type

Brokerage (forex, commodity, and derivatives)

Activities

1. Dealing in investments as principal where it does only so as a matched principle.
2. Dealing in investments as agent.
3. May be authorised to conduct other financial services found in Category 3C or 4

Base Capital

US$500,000

Timeline to incorporate

9-11 months

Category 3C

License Type

Discretionary Asset Management (Fund Manager) and issuer of stored valued managing client portfolios on a discretionary basis, under a client mandate.

Activities

1. Managing assets
2. Managing a Collective Investment Fund
3. Providing custody (other than for a fund)
4. Managing a PSIAu (received on a restricted basis)
5. Providing trust services as a trustee of an express trust
6. Providing money services (where it issues Stored Value).
7. Can also provide financial services in Category 4, but cannot provide financial services in categories 3A or 3B.

Base Capital

US$500,000 base capital requirement for 3C Fund Manager – US$140,000 (US$ 70,000 to manage exempt funds/QIFs). Expenditure based capital requirement of 18/52 of annual operating expenditure (as the Fund Manager will hold or control client Money)

Timeline to incorporate

9-11 months

Category 3D

License Type

Money Service Business

Activities

1. Money services including providing or Operating a payment account, executing payment or issuing payment instruments.
2. Can also provide financial services in Category 4 but cannot provide financial services in categories 1, 2, 3A or 3B, 3C or 5.

Base Capital

US$200,000 expenditure-based capital requirement of 9/52 of annual operating expenditure

Timeline to incorporate

9-11 months

Category 4

License Type

1. Investment Advisory
2. Non-discretionary asset management service, making recommendations and dealing on an execution only basis

Activities

1. Arranging deals in investments
2. Advising on financial products
3. Arranging custody
4. Insurance intermediation
5. Insurance management
6. Operating an alternative trading system
7. Providing fund administration
8. Arranging credit and advising on credit
9. Operating a crowdfunding platform
10. Providing trust services (other than as a trustee of an express trust).

Base Capital

1. US$10,000 Operating a crowdfunding platform while holding Client funds
2. US$140,000 Expenditure-based capital requirement of 6/52 of annual operating expenditure (18/52 if will holding or controlling Client Money).

Timeline to incorporate:

8-10 months

Category 5

License Type

Islamic Financial Institution

Activities

To carry out its entire business in accordance with the principles of Sharia and manages a profit-sharing investment account (received on an unrestricted basis).

Base Capital

US$ 10,000,000

Timeline to incorporate

9-11 months

*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:

1. Two Directors
2. A Senior Executive Officer. This can be a director resident in the UAE. The role cannot be outsourced.
3. Risk Officer
4. Finance Officer (can be a director or senior manager)
5. UAE resident Money Laundering Officer’s Report (MLRO)
6. UAE compliance officer. It can be the same person as the MLRO.

FinTech and Innovation

The benefits of startup licences have been given to tech startups in education and regulatory technology. DIFC has over 700 innovation licenses.

This license offers significant discounts on initial and ongoing fees, no paid up share capital requirements, access to world-class coworking spaces at competitive prices, and integration into an ecosystem comprising technology companies, investors, and the region’s leading venture capital funds.

DIFC offers commercial licences to artificial intelligence and Web3 businesses at a 90% subsidy.

Foundations

Foundations, unlike trusts, are independent legal entities and are versatile tools used for family wealth planning, philanthropy, business holdings, asset protection and real estate holding within the UAE.

Foundations can apply to be treated as Unincorporated Partnerships for tax purposes (taxed at 0%) if following conditions are met i) established for the benefit of natural persons or a public benefit entity ii) primarily managing assets or funds iii) not conducting business activities and iv) not primarily aiming to avoid taxes under UAE CIT.

Retail and other professional service providers

DIFC is the ideal hub for corporates and professional service providers. The Centre also offers a stable platform to manage regional activity. Some of the activities are listed below:

• Accountants
• Legal consultants
• Management consultancies
• Restaurants and coffee shops

Prescribed companies

A prescribed company is ideal for holding companies, managing office and/or proprietary investments.

It is cheap and easy to set up.

Prescribed companies can only be registered for a qualified purpose or by a qualified applicant.

It is also ideal for succession planning, managing business continuity and ring-fencing assets.

The estimated timeline to register a prescribed entity is four weeks following issuance of corporate bank account numbers 8 to 10 weeks thereafter.

Activities permitted

1. Holding Company
2. Managing Office
3. Proprietary Investment
4. Investment in Real Estate
5. Investment in Agricultural Enterprises & Management
6. Investment in Commercial Enterprises & Management
7. Investment in Educational Enterprises & Management
8. Investment in Healthcare Enterprises & Development
9. Investment in Industrial Enterprises & Management
10. Investment in Oil & Natural Gas Project
11. Investment in Retail Trade Enterprises & Management

What does a qualifying applicant or a qualifying purpose mean?

Qualifying Applicant

Any of the following:

1. A DIFC registered entity.
2. A shareholder or an Ultimate Beneficial Owner that controls a DIFC registered entity.
3. An affiliate of a DIFC registered entity.
4. An authorised firm.
5. A family operated business.
6. A fund
7. A government entity
8. 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

1. Aviation structure
2. Maritime structure
3. Crowdfunding structure
4. DIFC holding structure
5. Structured financing
6. Innovation holding structure
7. Intellectual property structure

What are the required steps to setup a company in the DIFC free zone?

Healy Consultants Group will project manage your 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 following are the steps to register and form a company in DIFC:

Company setup in DIFC: Pre-incorporation steps – 1.5 months to 3 months

1. 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;
2. 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.
3. 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.
4. Document preparation: Our Dubai incorporation team gathers all documents required to submit a quality application to DIFC.

Company setup in DIFC: Incorporation steps – 6 months to 8 months

1. Document submission: Healy Consultants Group submits the quality incorporation application online.
2. 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.
3. 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.
4. DIFC company incorporation and 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;
5. Bank account for the DIFC company and deposit of capital: Our 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.
6. 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.
7. 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.

Company setup in DIFC: Post incorporation steps – 1 month

1. 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;
2. 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.
3. 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.

How can Healy Consultants help with business setup in DIFC?

We can help by:

• Preparing the regulatory DIFC 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 in DIFC.
• Securing the DIFC company registration numbers and regulatory licenses.
• Opening a multi-currency corporate bank account for your DIFC company;

Contact us today to explore how we can support your business setup in DIFC.

Healy Consultants Group’s fees to setup a DIFC free zone company

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.