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Jan
22
Setting up a regulated entity in the DIFC

Setting up a regulated entity in the DIFC

The Dubai International Financial Centre (DIFC) is the financial hub for the Middle East, Africa and South Asia.
 
It is a financial free zone established by the United Arab Emirates Federal Decree No. 35 of 2004 and defined in Federal Law No. 8 of 2004.
 
The DIFC has over 1500 active registered firms and hosts regulated and non-regulated entities.
 
These include:
  • Designated Non-Financial Businesses or Professions (DNFBPs) including lawyers and accountants.
  • Representative Offices.
  • Non-regulated entities including restaurants and cafes, gyms, printers, couriers and more.
  • Regulated financial services entities.
 
Entities who will be providing financial services must submit an application to the Dubai Financial Services Authority (DFSA) to become authorised and issued with a licence. The DFSA is the regulatory body in the DIFC. It authorises and registers, supervises and enforces legislation it administers.
 
Firstly, the category of licence required must be determined and this depends on the financial services to be conducted by the applicant.  
 
The categories are:

 

  • Category 1 
    • Accepting Deposits
    • Managing an unrestricted Profit Sharing Investment Account (PSIAu)
       
  • Category 2 
    • Providing Credit
    • Dealing in Investments as Principal
       
  • Category 3A 
    • Dealing in Investments as Principal
    • Dealing in Investments as Agent
       
  • Category 3B 
    • Providing Custody (for a Fund)
    • Acting as a Trustee of a Fund
       
  • Category 3C 
    • Managing Assets
    • Managing a Collective Investment Fund
    • Providing Trust Services as a trustee of an express trust
    • Managing a restricted Profit Sharing Investment Account (PSIAr)
    • Providing Custody (other than for a Fund)
       
  • Category 4 
    • Arranging Deals in Investments
    • Advising on Financial Products
    • Arranging Custody
    • Insurance Intermediation
    • Insurance Management
    • Operating an Alternative Trading System
    • Providing Fund Administration
    • Providing Fund Trust Services (where it is not acting as trustee in respect of an express trust)
    • Arranging Credit and Advising on Credit
       
  • Category 5  - Islamic Financial Institution which manages a PSIAu.
     
  • Representative Office - Carrying out a very narrow set of activities described as marketing of financial services or financial products offered in the jurisdiction outside the DIFC by a 'related party' ie its head office, another branch of the head office or a Group member.
 
The application process for authorisation to operate as a DFSA regulated entity is:

 

  1. Introductory meeting with the Dubai International Financial Centre (DIFC) and Dubai Financial Services Authority (DFSA). 
  2. Letter of Intent filed with the DIFC.
  3. DFSA informally reviews submission.
  4. Applicant lodges full application along with a Regulatory Business Plan.
  5. DFSA will conduct a review of the application and carry out due diligence.
  6. DFSA issues In-Principal Approval.
  7. Following an In-Principal Approval the applicant will need to complete the following:
  • Incorporation and registration of the company with the DIFC Registrar of Companies.
  • Open a local bank account and provide evidence of remittance of capital.
  • Provide evidence of office space where financial activities will be conducted from.

 

Once all In-Principal conditions have been met by the Applicant, the DFSA will carry out an on-site visit and will issue the entity’s licence to operate.

 

HOLT consultancy is experienced in assisting clients with the licence application process.

 

Please contact the team at HOLT consultancy by email using info@holtconsultancy.com or by phone on +971 4 386 6360 to discuss your requirements. 

 
More information can be found on our website http://www.holtconsultancy.com.