Established in September 2004, Dubai International Financial Centre (DIFC) is a federal financial free zone that aims to develop to the same stature as New York, London, Tokyo, and Hong Kong. Due to the time-zone advantage, it primarily serves the global financial centers between Western Europe and East Asia.
DIFC is home to a world-class stock exchange, the Dubai International Financial Exchange (DIFX), which opened in September 2005. This onshore financial center is set up in a sprawling area of about 110 acres. It has a distinct legal system with absolute jurisdiction over employment, corporate security, commercial trusts, and civic bodies.
Dubai Financial Services Authority (DFSA) is an independent risk-based regulator and the governing body that regulates financial and banking services conducted by DIFC and provides them with a growth-oriented, secure, and stable platform to conduct business. This regulatory body issues business licenses to companies planning to operate in this largest intercontinental financial cluster between Singapore and Europe.
The DIFC Free Zone Fintech
Let us look at the growth of the fintech firms, the DIFC fintech, the company laws, and the introduction of IBO.
Growth of Fintech Firms
Banking and financial services can now be operated with the click of a button, backed by core coding in the backend. The core domains where tech has played a significant role in the finance sector are depicted below.
DIFC FinTech Hive’s 3 Pillars
1. Ground-Up Development
Customized and focused technology solutions are paramount in driving success and overcoming challenges. Deal flow and data over the past decade have been captured and analyzed, allowing for the continued success and implementation of strategic measures to be put in place and showcase the far-reaching needs of both international and local financial service providers.
2. Global Connectivity
An international community that drives innovation and collaboration, DIFC has brought in a tried and tested global concept to complete this link. The accelerator allows experience on a global scale to find the right niche in which to work and excel through solution-led financial technology.
3. Ecosystem Development
Continued reflection and constant learning have created an unparalleled start-up ecosystem and enhanced its development, catering to all parts of the value chain. The ecosystem capital, talent, and infrastructure are already in place, complementing top-end flow and rapidly growing risk capital culture to drive FinTech innovation for the Middle East, Africa, and South Asian region.
Company Laws of DIFC
In the process, Companies Law, DIFC Law No. 5 of 2018, abolishes LLC and introduces different classifications of public and private companies, emphasizing more mergers to accommodate the growing market. Moving ahead, DIFC Law No.7 includes the enhancement of the licensing regime, which will allow business entities to conduct businesses within or from the center.
Next, DIFC Law No. 10, which deals with real estate properties, will ensure that the purchasers get a clear picture and disclosure of what is being bought.
Introduction of UBO
A business entity is expected to understand with whom they are dealing daily. This saves them to avoid doing business with fraudulent parties. Ultimate Benefit Ownership (UBO) reveals the necessary information about a business entity that its stakeholders should know.
DIFC has taken a step forward to introduce UBO, which requires the ownership information of all the entities, maintaining their accuracy and providing accurate privacy protection.
Procedure for a DIFC Business Setup
Coming to DIFC company formation, the authority does not allow companies to operate in the non-financial sector. Toset up a company in Dubai free zone, one must have a commercial license. The procedure is as follows:
1. Decide on Your Business Activity
You can choose your business and financial activity from the following:
Types of Business Activities
- Private Banking
- Investment Banking
- Capital Markets
- Insurance, Reinsurance, and captives
- Fund Management
- Asset Management
- Wealth Management
- Private Equity
- Islamic Finance.
Types of Financial Activities
- Accepting deposits
- Advising on financial products
- Arranging for the custody and investment credit or deals
- Carrying out contracts of insurance
- Dealing in investments as an agent or as principal
- Effecting insurance contracts
- Insurance broking and management
- Managing assets
- Managing profit-sharing investments
- Operating a collective investment scheme
- Providing credit
- Providing custody
- Providing pecuniary services.
Select a Legal Entity
This free zone allows an entity (individual or corporate) to register a business in any of the following legal forms:
- Company Limited by Shares
- Limited Liability Company (LLC)
- Branch Office
2. Prepare the Company Documents
Fill out the application form and after choosing an appropriate business name, move on to the registration process by submitting all the following documents with proof of minimum share capital of the business:
- Anti-money laundering procedures and controls
- Applicant company's financial position and regulatory history, in case of a branch
- Company's internal audit functions and compliance system
- Detailed business plan
- Detailed information on operating systems and controls
- Names of key controllers, major shareholders having above 5% shares, and key staff
- Propriety certificate confirming the institution's fitness to conduct business
- Proposed institution's organizational structure
- Audited account of shareholders of the last 3 years.
3. Obtain Your Business License
The license will be issued within a few weeks after analyzing every document provided, and the certificate of incorporation will also be issued. The following license types are available:
- Ancillary Services
- Asset Management and Fund Registration
- Banking Services
- Business Processing Operations
- Capital Markets
- Islamic Finance
- Reinsurance & Captive Insurance.
4. Open a Business Bank Account
Open a free zone company bank account to proceed with your business transactions.
5. Get an Office Space
The different types of office space provided in this Free Zone are as follows-
Commercial Office Space- It includes many attractive options, like,
Utilities, including the central cooling system and emergency power
24-hour security with CCTV surveillance
IT packages and integrated data center solutions
Fit-out technical consultation
P.O boxes within the center
Conference and catering facilities.
- Co-working Spaces- This DIFC work hub offers cost-effective and flexible co-working spaces, backed by enabling infrastructure and passage to a financial community of over 22,000 professionals working across over 2,000 firms.
- Retail Spaces- DIFC leases office space to a range of retail businesses, from restaurants, art galleries, grocery stores, pharmacies, nurseries, fitness centers, health and beauty outlets, and technology and office support.
- Business Centres- DIFC’s Business Centres provide multi-purpose offices with impressive high-tech services, dedicated IT support, meeting rooms and engage in corporate, networking, education, or cultural activities.
- Event Spaces- This free zone offers spectacular and inspiring event spaces that can be modified to suit any occasion. The expansive space can be used for major launch events hosting several thousand guests or a smaller, more intimate reception for a hundred people or less.
If you want to incorporate your company into this free zone, then our advisors can help you.Contact ustoday- we’d be happy to assist you.
Do I need a local sponsor to open a business in the DIFC?
No, the DIFC is a free zone area.
How much time does it take to register the company?
What is the minimum share capital one needs to own?
What is the cost to set up a business in the DIFC free zone?
Around USD 20000.
What type of companies can I open in the DIFC free zone?
Branch Company, subsidiary, or even a new company.