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How to get Investment and Finance Business License in the UAE

By Ananya - 23 Nov 2021 Last Updated: 09 May 2022
How to get Investment and Finance Business License in the UAE

A flourishing financial and investment environment has come from favourable legislation, state assistance, and the population's purchasing power. They have made the UAE one of the most secure countries in the world when it comes to financial dangers. You can issue loans, manage, and advise, collect commissions and rewards while managing securities and finances in the UAE and overseas without paying taxes or sharing tax information if you have a license and tax resident status.

Financial Actions that are Available to you licensing in the United Arab Emirates

Your business development strategy is determined by the sort of License you choose, so choose wisely activity with caution. Dhanguard Group can assist you in deciphering license concerns and specifics.

Commercial projects

Recruiting and investing in commercial company ventures and assets, as well as management.

Securities transactions

In the financial markets, there are financial instruments, Investments, and client (intermediary) operations.

Financial products

Issuing credit cards and financial products, as well as providing direct and trade financing

Provider of payment services

Payment Service Provider (PSP) license - activities involving the receipt and processing of payments for third parties.

Investment consulting

Providing a variety of services relating to asset optimization, investment attraction, and placement.

FinTech license

Fintech is a term that refers to financial services that make use of cutting-edge technologies such as Big Data, artificial intelligence, and blockchain.

Insurance and reinsurance are two types of insurance.

Individuals and businesses can benefit from insurance and reinsurance goods and services. Putting together Investment Funds from private individuals and legal entities are pooled for joint investment.

Asset trust administration

Investors' monies are invested in the company's assets and financial instruments.

Investment and Financial Licenses in the United Arab Emirates: Differences and Peculiarities

Mainland Incorporation

  • Local (Mainland) businesses may be eligible. domestically conduct business while also giving an entry point into the UAE market the chance to represent one's own interests and have a presence in international markets.
  • Because of the firm's presence in This solution caters to the local market. prestige and trustworthiness among banks as well as counterparties, In the international arena, he has a lot of clout. It's got a convoluted structure

Financial Centres 

  • In specialized FTZs and foreign markets, licenses enable the right to conduct both financial and investment business transactions on a permanent basis.
  • A license in the DIFC and ADGM, the UAE's key financial centres, ensures the company's high standing and respect. 100% foreign ownership is permitted, although there is a lengthy registration process.
  • Companies registered in some FTZs are utilized to conduct business outside of the UAE and to execute financial and investment transactions.
  • It prevents you from freely operating in the domestic market. Local banks and counterparties are taking a cautious approach.
  • Allows for 100% foreign ownership.

Jurisdictions in the United Arab Emirates for Forming Investment and Financial Firms

Mainland (The local area)

Registrars are the Economic Development Departments of each of the Emirates. For several reasons, additional procedures and authorization from local financial regulators may be required a number of licenses

Dubai International Financial Centre is a financial Hub in Dubai (DIFC)

DIFC has its own financial regulator (DFSA), registration authority, and registration authority. a court of arbitration Additional restrictions may apply to a variety of licenses.

Jurisdictions in the United Arab Emirates for forming investment and financial firm’s internal financial regulator's criteria and approvals

Abu Dhabi Global Market (ADGM)

Abu Dhabi Global Market (ADGM) is structured with its own financial regulator (FSRA), registration authority, and arbitration court. Additional requirements and authorization from the internal financial regulator may be required for several licenses.

The Northern Emirates have several Free Trade Zones

There are no internal financial regulators and only limited licensing requirements. Most business activities are not subject to additional rules, however operating in the local market is forbidden.

The Central Bank of the Emirates (CB UAE) and the Committee for the Management of Financial and Commodity Markets must authorize some investment and financial licenses before they can be used for business purposes (Securities and Commodities Authority, SCA).

  • State control

Depending on the type of operation and the jurisdiction of incorporation, different state criteria apply. The Central Bank of the UAE (CB), the Financial and Commodity Markets Management Committee (SCA), and the Police are the major regulating bodies.

  • Share capital

In most circumstances, there are regulations relating to the amount of approved capital, with minimum levels ranging from 41 000 to 1.4 million dollars. In extreme situations, the permitted capital required for complex permits might be as much as US$8-14 million or more.

  • Bank guarantee

For the fulfilment of financial obligations to other parties, the State has established standards for a Bank guarantee. The guaranteed amount is determined by the type of financial or investment activity. The needed deposit can be large at times.

  • Qualified personnel

Financial managers, analysts, specialists in internal control over financial transactions, and a general manager with the required degree of education or qualifications are among the prerequisites for staffing levels and skills.

  • Equipped office

Financial and investment firms must meet a few requirements, including having a physical office that meets regulatory standards and international standards. It must also be suitable for confirming it as the company decision-making centre in compliance with Economic Substance standards.

  • Internal control

To minimize risks, regulators must guarantee that an internal control mechanism is in place as well as rigorous adherence to the law. They're also looking for procedures and processes to ensure that money laundering laws are followed.

The financial services activities in the UAE are regulated by a number of authorities.

Central Bank of UAE

The Central Bank of the United Arab Emirates regulates banking, investment, and money exchange businesses.

Companies and individuals are not permitted to engage in financial services operations unless they first receive a regulatory license from the UAE Central Bank.

Companies that want to start these businesses should contact the Central Bank. The Central Bank of the UAE should be contacted for Central Bank licensing laws and regulations, as well as licensing procedures.

  • SCA stands for Securities and Commodities Authority.

Emirates Securities and Commodities Authority regulates securities market, mutual funds, brokerages, and other related activities (ESCA)

Insurance Authority – IA The Insurance Authority of the UAE regulates and supervises the insurance, reinsurance, insurance intermediaries, and professionals who work in the insurance industry.

The following are the most important requirements for establishing a business in Dubai/UAE:

  • Generally, activities necessitate a minimum of 51 percent UAE national ownership or holding.
  • The initial capital required to establish a firm is typically high.

Read More: How to Apply for Trade License in Dubai

What are the other jurisdictions in the UAE where financial services can be conducted?

Individuals and organizations who specialize in providing financial services to professionals can do so from either the Dubai International Financial Centre (DIFC) or the Abu Dhabi Global Market (ADGM).

The DIFC and ADGM are onshore financial centres that provide secure and efficient operating environments for financial institutions.

How can I set up a company in ADGM?

The Abu Dhabi Global Market (ADGM) is a global financial centre that caters to local, regional, and international organizations.

ADGM is a Financial Free Zone in the United Arab Emirates, with its own civil and commercial laws and financial services regulator, the Financial Services Regulatory Authority (FSRA).

In the ADGM, you can learn more about Business Setup.

How do you start a business in the DIFC?

DIFC is a rapidly growing financial centre that will play a significant role in the global economy in the future.

It provides a reliable and safe platform for enterprises and financial institutions to access the Middle East, Africa, and South Asia's rising markets.

The DIFC is a Financial Free Zone in the United Arab Emirates, with its own civil and commercial laws and financial services regulator, the Dubai Financial Services Authority (DFSA).

In the case of international entrepreneurs, the company registration process for a financial firm in Dubai must be done by a local agency or corporation. To give financial aid in the UAE, anyone interested in doing so must first obtain a financial consultancy or financial analyst license.

In the financial industry of Dubai, the following sorts of businesses can be established:

  • banks
  • investment companies
  • investment funds
  • insurance companies, and investment trusts

Our Dubai company formation experts can provide information on the financial services that these types of businesses can provide.

In Dubai, there are several requirements for enterprises in the financial sector.

It's vital to note that the Company Law in Dubai imposes several requirements for forming a financial company. Among these are:

  • at least 51% of the company must be owned by a UAE or by a GCC national.
  • the minimum capital required to set up this type of company is 1 million AED (approximately 300,000 USD);
  • the company must hire a financial analyst or consultant.
  • it must have an internal audit system in place.

Foreign companies are also allowed to offer financial services in Dubai if they are operational for at least 5 years in their home countries.

Conclusion

Getting an investment and financial license in mainland UAE can be complex because of too much legality but our experts at Dhanguard make the job easy for you with their relevant experience. To know more about the process and assistance connect to our experts at Dhanguard.

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

Dhanguard provides faster and hassle-free Trade License with minimum paper work. With the guidance of our professional team of consultants you will get General trading license, Freelance license, Etrader license, Event Management License, Travel Agency license in Mainland and Freezone in UAE.

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