Dubai International Financial Centre – Set up process18 October 2017 Category:
When considering your options for setting up in the UAE, the nation’s free zones catch the eye.
This is particularly true for first-time, foreign entrepreneurs – and it’s not hard to see why. As well as 100% foreign ownership, UAE free zones also offer 0% corporate and personal tax, 100% repatriation of capital and profits, no currency restrictions, and 100% import and export tax exemption.
And there are plenty more advantages since each specific free zone offers a number of distinct and unique benefits. Some free zones are better suited to businesses in the import and export trades, while others (such as the one we’re looking at today) lend themselves to more regulated industries such as finance.
Dubai International Finance Centre (DIFC) is located in the heart of central Dubai, making it the ideal hub for businesses wishing to tap into the fast-emerging financial markets of the Middle East, Africa and South Asia. The free zone’s internationally recognised and independent regulation, and enabling environment make it one of the least complex pathways into the heavily regulated financial industries.
Dubai International Finance Centre (DIFC) is located in the heart of central Dubai, making it the ideal hub for businesses wishing to tap into the fast-emerging financial markets of the Middle East, Africa and South Asia.
Setting up in Dubai International Financial Centre
So, if you’re looking to make an impact in the money markets of the UAE, there are few better places to call home. With that in mind, let’s look at some of the key benefits on offer.
1. Open to a range of businesses: As well as attracting businesses from the regulated financial sectors of banking and wealth management (the free zone is home to 17 of the world’s top 20 banks), Dubai International Finance Centre also welcomes many companies from non-regulated industries. DIFC is open to brokers, consultants, and service and product providers from industries as varied as HR, health and fitness, and jewellery trading.
2. Robust setup procedure: A major reason why DIFC is considered one of the UAE’s most prestigious free zones is its comprehensive setup process. Regulated businesses must first file a letter of intent with DIFC and attend a meeting with representatives from both DIFC and the Dubai Financial Services Authority (DFSA). Once your submission has been informally reviewed, you can then make your full application. As well as a completed application form, you will also be required to provide usual setup documents such as visa and passport copies as well as a formal regulatory business plan and a three-year financial forecast. If all is in order, you will receive an In-Principal Approval from the DFSA and you must then provide proof of incorporation or registration with DIFC, open a corporate bank account and provide evidence that you have office space from which to trade. Only then will you receive your company licence. The process for non-regulated is slightly less strict, though the exact requirements will depend on the nature of your business.
3. Clear pricing structure: While setting up in DIFC is by no means cheap, its pricing structure is transparent. As well as an initial setup cost of USD 21,500, entrepreneurs are required to pay licensing fees, office costs and paid up-front share capital of USD 50,000. Another substantial cost to consider if you are setting up a regulated business is that of creating a business plan. As this must adhere to the London Law, the total cost of creation can run into the thousands. These costs, and indeed any payment to DIFC or any other authority, must be made in US dollars.
4. Auditing and bookkeeping requirements: Dubai International Finance Centre’s strict auditing and bookkeeping requirements are yet another reason why it is one of the most respected free zones in the region. However, while regulations may be tight, that’s not to say they are overly complex. Businesses must simply keep up-to-date books and file an annual report – for which a USD 800 fee is payable.
Dubai International Finance Centre’s strict auditing and book keeping requirements are yet another reason why it is one of the most respected free zones in the region.
5. Easy to arrange your corporate bank account: Once you’ve received your In-Principal Approval from DIFC and the DFSA, you can set up your corporate bank account. The application process is quick and simple. DIFC staff can advise on the best bank to suit your needs – and can even arrange meetings in-branch for you, should you wish. A company formation specialist can also provide the same service – or alternatively, you’re welcome to approach any local or international bank on your own.
6. Dedicated visa service: DIFC’s dedicated Government Services office provides many administrative services, including the issue and renewal of employment visas. The maximum number of visas you can apply for will depend on both the type of business you wish to set up and – as physical office space is mandatory – the size of premises you lease in the free zone.
7. Easily sponsor dependants: Dubai International Financial Centre is also on hand to help with visas for your dependants as well. Whether you wish to sponsor a maid, driver or family member, the process is relatively easy – entry permit, status adjustment, medical fitness test, then Emirates ID registration and visa stamping. Keep in mind, however, that visas for maids require a deposit of AED 2,060. As this is such an important process, it’s a good idea to get advice from an expert in setting up UAE free zone businesses. This ensures that before you start an application, both you and those you’re hoping to sponsor meet the entry criteria.
8. Set up with multiple shareholders: As well as its ideal location in central Dubai, there’s another reason for DIFC’s popularity with large, multinational business: it allows for company setup with multiple shareholders. These can be individuals, corporate entities or a combination of the two.
9. Zero percent tax: It’s impossible to talk about the popularity of Dubai International Financial Centre without mentioning its favourable tax conditions. The free zone provides a 40-year guarantee of zero taxes on both corporate income and profits. This is thanks in large part to DIFC’s broad network of double taxation treaties with global regulators and central banks.
The free zone provides a 40-year guarantee of zero taxes on both corporate income and profits.
10. Location, location, location: Without a doubt, much of DIFC’s draw is down to its location. As well as being strategically placed to trade with both East and West, the free zone’s central location between new and old Dubai puts it in proximity to some of the city’s best schools and healthcare facilities. DIFC is also linked to Dubai’s main highway, putting important travel hubs such as Dubai International Airport within easy reach.
Make Dubai International Finance Centre your new home
So you’re sold on the benefits of setting up your business in Dubai International Finance Centre – what next? There are a number of steps that need to be undertaken, some complex, some less so. The first thing to do is choose your business activity. From here you can decide on your company name, complete and file your registration paperwork with the relevant authorities, open a bank account, and apply for any visas that may be required.
However, the specifics of this process will depend largely on the type of licence you are applying for and the kind of business you wish to run. That’s why before starting any of these steps, the first port of call should always be to a company setup expert who will guide you through every part of the application, ultimately ensuring the entire process requires little more than a few hours of your time.