There are several types of licenses that businesses can obtain within the DIFC, depending on the nature of their activities. Some of the common types of licenses include:
This license is for businesses engaged in financial activities such as banking, insurance, asset management, and other financial services.
This license covers non-financial activities like consulting, marketing, and other service-oriented businesses.
This license is for businesses engaged in retail activities, such as selling products directly to customers.
This license is for professionals like lawyers, accountants, and consultants providing specialized services.
This is for individuals who want to offer their services as freelancers within the DIFC.
This license is for businesses focused on innovative and technology-driven activities.
These three authorities guarantee that DIFC provides a highly professional yet business-friendly environment that follows best standards and is recognized by all major financial centers worldwide.
The DIFC is unique in that its legislative structure is based on English common law. DIFC has its own set of civil and commercial laws and regulations (Companies Law DIFC Law No. 5 of 2018 including the UK Companies Act 2006 plus policy decisions on where to deviate or apply a lighter touch than the UK or other common law positions) and has developed a comprehensive code of law governing financial services regulation. DIFC has established an autonomous judicial system as part of its sovereignty. The DIFC Courts are in charge of the independent administration and enforcement of justice in the DIFC. All civil and commercial issues originating within DIFC or pertaining to bodies and businesses registered in DIFC are exclusively heard by the Courts.
DIFC Category 1 License Authorised Firm is a firm that is licensed to carry out the Financial Service of Accepting Deposits or Managing a Profit-Sharing Investment Account (received on an unrestricted basis). The Authorised Firm under this category may be authorised to conduct other Financial Services, but its authorisation for Accepting Deposits and/or Managing a Profit-Sharing Investment Account is what determines it as a Category 1 Authorised Firm, rather than another. A Category 1 firm may apply for an Islamic Window to conduct certain aspects of its business in a Sharia-compliant manner.
Capital Requirement is not applicable to a Branch set-up of existing regulated bank.
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by DFSA on the review of the application.
This is an Authorised Firm licensed to carry out the Financial Service of Dealing In investments as Principal and Providing Credit. In addition to this activity, the Authorised Firm under this category may also be authorised to conduct other Financial Services found in Category 3A, 3B, 3C or 4, provided that it cannot be authorised to conduct the Financial Services set out in Category 1.
Capital Requirement not applicable to a Branch set-up of existing regulated bank.
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by DFSA on review of the application.
In this category, an Authorised Firm is licensed to carry on one or more of the Financial Services of: Dealing in Investments as Principal where it does only so as a Matched Principle; Dealing in Investments as Agent. An Authorised Firm grouped under this category may be authorised to conduct other Financial Services found in Category 3B, 3C or 4, but it cannot be authorised to conduct any of the Financial Services in Categories 1 or 2.
Capital Requirement is not applicable to a Branch set-up of existing regulated bank.
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by DFSA on the review of the application.
An Authorised Firm in this category is licensed to Provide Custody (but only for a Fund) and act as trustee for a Fund. An Authorised Firm in this category can carry on financial services in Category 3C and 4 but cannot carry on financial services in Categories 1, 2 or 3A.
Capital Requirement is not applicable to a Branch set-up of an existing regulated bank.
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by DFSA on the review of the application.
An Authorised Firm in this category may be licensed to carry on one or more Financial Services of Managing a Collective Investment Fund, Managing Assets, Providing Trust Services as a trustee of an express trust, Providing Custody (other than for a fund) and Managing a Profit-Sharing Investment Account (received on a restricted basis). An Authorised Firm that has a 3C licence can also provide Financial Services in Category 4 but cannot provide Financial Services in Categories 1, 2, 3A or 3B.
Expenditure based capital requirement of 18/52 of annual operating expenditure (as the Fund Manager will hold or control Client Money)
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by DFSA on the review of the application.
An Authorised Firm in this category may be licensed to carry on one or more Financial Services of providing money services where the firm is providing or operating a payment account, executing payment transactions or issuing payment instruments. This includes creating and maintaining accounts for executing payment transactions, issuance of personalized sets of procedures agreed upon by the users and the provider, for initiation or execution of payment instructions. An Authorised Firm that has a 3D licence can also provide Financial Services in Category 4 but cannot provide Financial Services in Categories 1, 2, 3A or 3B, 3C or 5.
9/52 of annual operating expenditure Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by DFSA on the review of the application.
Authorised Firms in this category can do one or more of Arranging Deals in Investments, Advising on Financial Products, Arranging Custody, Insurance Intermediation, Insurance Management, Operating an Alternative Trading System, Providing Fund Administration, Arranging Credit and Advising on Credit, Operating a Crowdfunding Platform and/or Providing Trust Services (other than as a trustee of an express trust). In Categories 2-4, Authorised Firms may apply to conduct their business in a wholly Sharia Compliant manner or through an Islamic Window.
Operating a crowdfunding platform while holding client money –$140,000
Expenditure-based capital requirement of 6/52 of annual operating expenditure (18/52 if will holding or controlling Client Money).
Note that additional capital requirements may be imposed by DFSA on the review of the application.
An Islamic Financial Institution carries out its entire business in accordance with the principles of Sharia and manages a profit-sharing investment account (received on an unrestricted basis).
CET1, 6%; Tier 1, 8%. Capital Requirement is not applicable to a Branch set-up of an existing regulated bank.
Capital Plan must be captured in Internal Capital Adequacy Assessment Process Report.
Note that additional capital requirements may be imposed by DFSA on the review of the application.
A DIFC representative office is an Authorised Firm and is regulated by the DFSA. However, it is not included in the above Authorised Firms categorisation table because it does not have any capital requirements as per the DFSA PIB Module. This is because a DIFC Representative Office can only be set up as a branch of an already established firm.
Any firm in a financial services sector can apply to be a Representative Office in DIFC but they must be regulated in an acceptable home jurisdiction (other than the DIFC). A representative office’s activities are confined to the general marketing of financial services and financial products already being offered from a location outside the DIFC by its head office or a member of its group.
Obtaining a Dubai International Financial Centre (DIFC) Financial License involves navigating through a complex regulatory framework and fulfilling specific requirements. It's crucial to have legal assistance from experienced professionals who understand the local laws, regulations, and procedures. Here's an overview how our lawyers can assist you:
Our experienced lawyers provide an initial consultation to understand your business model, objectives, and the type of financial activity you intend to conduct within the DIFC. They also assess your eligibility and guide you through the regulatory landscape.
DIFC offers various license categories, such as banking, insurance, financial services, and more. We can help you determine the most suitable license category for your business activities.
Our team of professionals can assist in preparing a comprehensive application, ensuring all necessary documentation, financial statements, business plans, and compliance measures are in order. This is critical to demonstrate your business's viability and adherence to regulations.
Our lawyers will ensure your business adheres to DIFC regulations and other applicable laws. They can help you establish appropriate governance, risk management, and compliance frameworks.
Our lawyers can represent you in interactions with the DIFC Authority and regulatory bodies. This includes addressing any queries they might have during the evaluation process.
Our legal professionals review the terms and conditions of the license, ensuring that they align with your business interests. They also negotiate with regulatory authorities on specific points if needed.
Our lawyers conduct due diligence on your behalf, verifying that your business structure, operations, and financials are compliant with DIFC regulations.
Our professionals can draft and review legal agreements, contracts, and other documents necessary for your licensing process, such as shareholder agreements, employment contracts, and service agreements.
In case of any issues or disputes during the application process, our lawyers can assist you in appealing decisions or resolving conflicts.
After obtaining the license, our lawyers can help you maintain compliance with ongoing regulatory requirements. This might include reporting, audits, and updating your business practices as regulations evolve.
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