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Dubai International Financial Free Zone Authority
Dubai International Financial Free Zone Authority
Dubai International Free Zone (DIFC) is the center establishment of Dubai, nearby the Dubai World Trade Center (DWTC). It is a Free Financing Zone governed by Dubai Financial Regulatory Authority.
Dubai International Financial Centre (DIFC) is a first-rate financial free zone site founded in 2004, as a special financial territory in Dubai. It is a business hub of firms that have presence in the Middle East, Africa and South Asia (MEASA) markets.
Key Features of DIFC
Regulatory Framework: The Dubai Financial Services Authority (DFSA) is a special zone regulator whose operations are independent and can only be applied in the zone (DIFC)
It has a system of common law, and does business in English
Legal System: The court system used in DIFC is called the DIFC Courts and has nothing to do with the legal system of UAE
This offers a special legal context to global financial activities.
Tax Benefits: DIFC provides 50 years no-tax commitment against corporate income and profits
This is supplemented with the network of the double taxation treaties in the UAE.
Ownership Structure: As a free zone, DIFC allows companies 100% foreign ownership without the need for a local partner
DIFC Authority
The principal governing body of the DIFC is the DIFC Authority
Its responsibilities include:
1
Overseeing strategic development
2
Managing operational aspects
3
Planning for the Dubai International Financial Centre
4
Tally ERP
The DIFC Authority is committed to creating value for its stakeholders and ensuring the centre’s growth and success.
Business Activities
DIFC caters primarily to institutional investors, focusing on sectors such as:
- Banking and Brokerage
- Capital markets
- Wealth management
- Reinsurance and captives
- Islamic finance
- Business processing operations
- Ancillary services
Growth and Success
DIFC has experienced invalid growth and this is indicated by the report of 19% growth in non-financial companies per year in 2022
DFIC has at present over 3,000 international companies, family businesses and corporate service providers altogether.
Dubai International Financial Centre Free Zone Authority has developed a financial hub that has drawn businesses and talents across the world. It has been able to propound on its specialized regulatory structure, tax regulatory advantages, and geographical strategic position as the main force in the global economic sector.
It permits banks, capital markets, technology, financial service outfits, and allied companies in the service industry to operate out of here.
The Dubai International Financial Centre (DIFC) has several important stages in the process of the company set up:
Initial Consultation and Planning
Pay a visit to DIFC authorities to address them on your business plan and activity intentions
File the Letter of Intent to have an interest in establishing in DIFC
Write up a Regulatory Business Plan documenting your business model, your sources of revenue, your governance and how you will manage risks
Application and Approval
- Submit a formal application to the Dubai Financial Services Authority (DFSA) along with required documentation
- Regulatory Business Plan
- Financial model
- Policies and procedures manuals
- Details on shareholders, directors, and senior management
- IRAP/ICAAP reports (if applicable)
- Pay the DFSA application fee
- Undergo a detailed review process by the DFSA
- Receive an In-Principal Approval (IPA) if the application is satisfactory
Company Registration
- Register the legal entity with the DIFC Registrar of Companies (ROC)
- Choose an appropriate legal structure (e.g. LLC, LTD, Branch)
- Submit required documents:
- Business plan
- Shareholders’ documents and resolutions, wherever applicable
- Memorandum and articles of association
- Proof of capital investment
- Obtain a provisional Certificate of Incorporation
Operational Setup
- Secure office space within DIFC
- Open a local bank account and deposit the required share capital
- Apply for and obtain the necessary commercial license
Final Approval
- Present proofs of observance of the IPA conditions to the DFSA
- Accept the Financial Services Permission and get the ability to start business operations
The normal time line of process is between 6-8 months in regulated activities and between 6-8 weeks in non regulated activates.
It is worth adding that certain demands and schedule might be different according to the nature of your businesses and the kind of your license.
The prices to establish a firm at the Dubai International Financial Centre (DIFC) may change according to various parameters but the following will give the principal costs:
Registration and Licensing Fees
Company Registration
- Name reservation: $800
Incorporation application for a Private Company Limited by Shares: $8,000
Commercial License
- Annual fee: $12,000
Data Protection
- Registration: $500
- Annual renewal: $250
Office Space
DIFC demands all registered entities to acquire a physical office on lease. Options include:
- DIFC Business Centre: Starting from $27,000 for a one-desk office
- DIFC Fitted Offices: From Approx $55 per square foot
- Other buildings within DIFC: Starting from $32,000 per annum
Visa Costs
- Establishment Card Application: $630
- PSA Deposit: $682
- Visas (per visa): Starting from $1,500
Additional Costs for Regulated Firms
For companies requiring regulation by the Dubai Financial Services Authority (DFSA):
- Application fee: Starts from $15,000 for a Category 4 license
- Annual license fee: Starts from $15,000 for a Category 4 license
Total Estimated Cost
The cost of establishing a holding company in DIFC will be estimated to be over 25,000 dollars.
Nevertheless, this may be significant depending on the nature of the company, the selected office premise and the number of visas that one needs. The start up expenses of regulated firms may be between 50,000 and 90,000 dollars, prior to the start of it.
It should be mentioned that these charges are not fixed and can be changed according to the needs of your business. There are professionals in business set up and they can be consulted to give the most current and accurate cost information as per your business requirements or one can refer directly to DIFC authorities.
Alpha Equity’s expert DIFC Free Zone authorised consultants can incorporate a company in DIFC according to the client’s and prospect’s business models and plans.
We provide end-to-end solutions to all clients in the business setup of DIFC, licensing amendment services in DIFC, and PRO services in DIFC as per the rules and regulations of Dubai International Financial Center.