The Dubai International Financial Centre (DIFC) is the city's financial centre. It was formed under UAE Federal Decree No. 35 of 2004, UAE Federal Law No. 8 of 2004, and Dubai Law No. 12 of 2004 as a federal financial free zone. The DIFC has a physical footprint of around 110 acres. The DIFC has its own legal system and courts that are separate from the UAE's, with authority over corporate, commercial, civil, employment, trusts, and securities law.
The DIFC's mission is to create a platform for financial institutions to do business with the region's growing markets. It was founded with the goal of fostering growth, progress, and economic development in the UAE while also facilitating access to regional markets by providing internationally recognised legal and commercial practises, as well as infrastructure that meets international standards.
It is a financial hub ideally placed between the eastern and western time zones, surrounded by a rapidly rising region rich in natural resources and petrodollars. It offers an unrivalled financial destination and powerhouse when combined with a tax-friendly framework and a laissez-faire attitude toward capital repatriation and fund movement.
DIFC's expanding prominence as a global financial centre serving to the area is reaffirmed by the geographic diversity of the Centre's total number of regulated enterprises. Europe accounts for 36% of regulated enterprises, followed by the Middle East (27%), North America (16%), Asia (11%), and the rest of the world (10%).
DIFC has increased not only in size but also in the sophistication and complexity of financial operations it conducts since its inception. Innovative legislative actions that addressed specific sector demands and the region's rising financial services requirements were important growth drivers.
Types of Licenses Provided in DIFC
A financial regulatory system keeps track of business activity related to finance and banking.
Non Managed License
In the DIFC, non-managed licences are those that are not related to finance or banking.
Types of Entities Registered under DIFC
- Company Limited by Shares (LTD) - A LTD can raise capital through a public offering of shares and can also issue securities. There must be at least one stakeholder.
- Limited Liability Company (LLC) - A LLC is not subject to DFSA regulation and is not permitted to issue securities. A minimum of one person is necessary to form a group.
- A Recognised Company (RC) is a DIFC-registered branch of an existing overseas business. Because an RC is not regarded a separate legal entity, it is merely an extension of the foreign-incorporated corporation.
- A Limited Liability Partnership (LLP) is a business entity formed by two or more people who are all members of the LLP. Members' responsibilities are limited to the amount of money they put into the LLP.
- A general partnership (GP) is created by two or more people, and each member is jointly and severally accountable for the partnership's debts and obligations without limits.
- A limited partnership (LP) is a business entity formed by two or more people. It must have at least one general partner with unlimited liability and one limited partner with responsibility limited to the amount contributed to the LP.
- Special Purpose Companies (SPVs) must be licenced to operate under the DIFC Authority in accordance with their charter.
- It is possible to register a pre-existing LLP, GP, or LP in the DIFC.
- The DIFC Authority also allows for the transfer of international enterprises to the DIFC (provided that the foreign company is authorised to do so pursuant to the laws of its jurisdiction of incorporation).
- Non-regulated entities are those that are based in the DIFC but are not engaged in the provision of a financial service (as defined in the DFSA Rulebooks) or are exempt from regulation under one or more of the DFSA Rulebooks' exemptions.
Why one should Start a business in DIFC?
Subsidiaries and incorporated entities have 100 percent ownership in DIFC, as well as a world-class regulatory framework that provides for a variety of legal entity structures.
Framework of Common Law
The legal system and courts of the DIFC are based on a Common Law framework that is overseen by an independent and well-respected regulator and adjudicated by a court system that is similarly well-respected.
Capital Repatriation is Unrestricted
Companies based in the DIFC incur no capital or profit flow limitations, and there are no currency exchange regulations in the US-dollar denominated jurisdiction.
Regulatory Environment with Independence
The Dubai Financial Services Authority (DFSA), an independent risk-based regulator, awards licences and oversees financial services conducted through DIFC.
Model of a Hub and Spoke
DIFC provides a platform for organisations to centralise regional and worldwide operations management, as well as its deployment to worldwide branches.
Regulatory bodies operating in DIFC
The DIFC Authority, which was founded as a judicial entity established by the Government of Dubai under Law No. 9 of 2004, is the organisation in charge of monitoring the operation and administration of DIFC. Its functions include formulating and directing overall strategy, promoting DIFC, and attracting licensees to operate in the DIFC.
Dubai Financial Services Authority (“DFSA”)
Established under Law No. 9 of 2004 and completely separate from the DIFC Authority and the DIFC Judicial Authority, the DFSA is the integrated regulator responsible for the authorization, licencing, and registration of institutions and individuals wishing to conduct financial and professional services in the DIFC.
DIFC Judicial Authority (“DIFC Courts”)
The DIFC Courts are charged with administering and enforcing DIFC's civil and commercial legislation.
Registrar of Companies (“ROC”)
The ROC is a separate legal entity constituted as a “Corporation Sole” under the Companies Law. The ROC is responsible for advising on, receiving, reviewing, and processing all applications submitted by prospective DIFC registrants in accordance with the Companies Law, the General Partnership Law, the Limited Liability Partnership Law, or the Limited Partnership Law, and the implementing regulations applicable thereto.
Registrar of Securities (“ROS”)
The ROS is in charge of recording and registering security pledged against loans, guarantees, and other financial transactions, and therefore establishing priority.
RORP (Registrar of Real Property)
The RORP safeguards the interests of purchasers, sellers, and lessees.
DIFC Investments (Company)
DIFC Investments (LLC) is a company based in Dubai, United Arab Emirates. In keeping with the growth of the Centre's investment strategy and policies, DIFC Investments maintains and maintains a wide portfolio of investments. It strives to develop strategic alliances to help DIFC achieve its aims and objectives.
Hawkamah Institute of Corporate Governance
Hawkamah Institute of Corporate Governance is an international network of corporate governance practitioners, regulators, and institutions whose principal mission is to create Middle Eastern corporate governance best practises.
Mudara - Institute of Directors (IOD)
Mudara - Institute of Directors (IOD) is a membership organisation in the Middle East and North Africa (MENA) area that serves directors, professional leaders, and governance experts.
How will Dhanguard assist you?
Dhanguard will help you establish up a financial services or allied services business in the DIFC. Because DIFC firms are focused on finance and investment, the concerned authorities must conduct a detailed evaluation of the shareholder profile, company activities, and business strategy.
Our legal and commercial professionals will guide you through the whole company formation process in the DIFC. If you'd like to learn more about the DIFC Company Formation process, contact one of our expert consultants right immediately!