Establishing a DFSA Category 3A and Category 4 licence in Dubai in 2025
Over recent years, the United Arab Emirates (UAE) has solidified its position as a global business hub, with Dubai at the forefront, attracting premier investment firms, asset managers, fintech companies, and venture capital funds. Central to this financial ecosystem is the Dubai Financial Services Authority (DFSA), an autonomous regulatory body overseeing all financial and ancillary services within Dubai. In collaboration with the Dubai International Financial Centre (DIFC), the DFSA ensures the smooth operation of this distinguished financial district.
In this article, the SALVUS Investment Firms Licensing team explores the requirements for obtaining a Category 3A or Category 4 licence under the DFSA framework, highlighting recent developments up to 2025. We also outline our methodology in assisting you to secure the appropriate licence tailored to your business needs.
Additionally, our Licensing team sheds light on the DFSA’s vision and regulatory strategy, offering insights on becoming a licensed Investment Firm, Investment Fund, Money Services Firm, or other financial service providers.
This commentary aims to guide you through the process of establishing a DFSA Category 3A or Category 4 licence in Dubai in 2025, ensuring you are well-informed and prepared for the evolving regulatory landscape.
1. DFSA Category 3A license requirements and authorisation
2. DFSA Category 4 license requirements and authorisation
3. Comparison between Category 4A and Category 4 licenses
4. The DFSA’s vision and regulatory approach
5. Guidance from the DFSA on becoming a licensed entity
6. How can SALVUS assist you?
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1. The DFSA Category 3A license
The DFSA Category 3A licence permits investment firms to conduct the following financial services:
- Dealing in Investments as Principal (on a Matched Principal basis only)
- Dealing in Investments as Agent
To qualify, firms must be incorporated within the DIFC and may operate as subsidiaries of regulated entities from approved jurisdictions. With a Retail Clients licence endorsement from the DFSA, Category 3A licensed entities can onboard retail clients. Additionally, they can hold and/or control client funds or assets through a Client Assets licence endorsement issued by the DFSA.
The minimum capital requirement for entities with a DFSA Category 3A licence is USD 500,000. Based on our experience, the licensing process typically takes between 8 to 12 months to complete.
2. The DFSA Category 4 license
The DFSA Category 4 licence allows investment firms to perform the following investment-related services:
- Arranging Deals in Investments
- Advising on Financial Products
- Operating an Alternative Trading System
- Providing Fund Administration
- Operating a Crowdfunding Platform
Through the DFSA Category 4 licence, firms can also be authorised to offer other financial services not included in the above list.
Similar to Category 3A, firms must be incorporated within the DIFC and can be subsidiaries of regulated entities from approved jurisdictions. While Category 4 licensed entities can onboard retail clients through a Retail Clients regulatory licence endorsement from the DFSA, they are not permitted to hold or control client funds or assets.
The minimum capital requirement for entities holding a DFSA Category 4 licence is USD 10,000. Based on our experience, the licensing process for a DFSA Category 4 licence can be completed within 4 to 6 months.
Our Licensing team is ready to support your firm in securing a DFSA Category 3A or Category 4 licence in 2025. Contact us at info@salvusfunds.com to discuss your licensing needs.
3. How the Category 3A and Category 4 licenses compare
| Features | Category 3A | Category 4 |
|---|---|---|
| Key differences | Allowed to act as a traditional broker | Allows the license holder to be a facilitator of transactions but has no authority to bind parties to the transaction |
| Minimum Regulatory Capital Required | Higher of: • 500,000 USD • Risk Capital Requirement • Expenditure Based Capital Minimum | Higher of: • 30,000 USD • Expenditure Based Capital Minimum |
| Licensing timeframe | 6-9 months | 4-6 months |
| Permitted to hold and/or control client funds or assets | Yes, through a one-off USD Client Assets regulatory license endorsement fee to the DFSA | No |
4. The DFSA’s vision and regulatory approach
The DFSA aims to set clear goals and principles, providing direction and purpose for its regulatory activities. Its vision is “to be an internationally respected regulator, leading the development of financial services through strong and fair regulation.” The DFSA follows a risk-based regulatory approach, directing and prioritising resources to prevent unacceptable and unnecessary risks. It is committed to ensuring a high level of competence across all functions related to its administrative and consultative procedures, while also commanding respect among market participants both regionally and globally.
5. Guidance from the DFSA on becoming a licensed entity
Preparing the necessary documentation and paperwork for submitting an application must be undertaken diligently. Whether you are a start-up investment firm or an established payment institution seeking to expand into Dubai’s International Financial Centre, it is crucial to prepare in advance.
Submitting the DFSA’s most up-to-date application forms helps avoid outdated requirements and the need to redo procedures. Additionally, ensure the business activities to be provided are recognised by the DFSA and correspond to specific financial and ancillary services. If you are uncertain whether your business activities fall under DFSA’s regulation, review this with the DFSA, DIFC, or an expert consultancy firm such as SALVUS.
6. How can SALVUS assist you?
Drawing on our extensive experience with DFSA Category 3A and Category 4 licence applications, we assist in:
- Assessing your business model to align with DFSA’s regulatory framework.
- Preparing all necessary documentation, including financial projections, compliance manuals, and governance structures.
- Liaising with the DFSA throughout the licensing process to ensure a smooth and efficient approval.
- Providing ongoing compliance support post-licensing to maintain regulatory adherence.
Our Licensing team is ready to support your firm in securing a DFSA Category 3A or Category 4 licence in 2025. Contact us at info@salvusfunds.com to discuss your licensing needs.
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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.