Money Services Provider (MSP) – DFSA
What are the DFSA & DIFC and what do they do?
The Dubai Financial Services Authority (DFSA) serves as the independent regulatory authority overseeing all activities related to financial and ancillary services within Dubai. It ensures that the financial sector operates in a transparent, efficient, and compliant manner. The Dubai International Financial Centre (DIFC) is a specialised financial-free zone that attracts some of the world’s premier investment firms, investment funds, fintech companies, and venture capital investment funds. The DIFC and DFSA together, created a symbiotic relationship and are offering a conducive business environment. Both authorities have positioned themselves as leading financial hubs for the Middle East, Africa, and South Asia (MEASA) region, bolstering Dubai’s status as a global financial centre.
Why establish a Money Services Provider in Dubai?
An established MSP in Dubai benefits from:
- The DIFC’s operation under a unique legal framework, aligned with the English Common law accompanied by its own civil and commercial laws and regulations.
- The DFSA’s legislation model is built on the legal framework used by global financial centres ensuring a stable and secure system.
- The DIFC’s attractive tax regime where zero taxes are applied on corporate income and profits during a forty-year period and the UAE’s wide range of double tax treaties can be exploited.
- Applying no restrictions on foreign talent, capital or profit repatriation and no currency exchange controls for existing groups’ branches or subsidiaries in DIFC.
- Dubai’s strategic location, situated at the crossroads of East and West, serves as a global gateway to two-thirds of the world’s most attractive growth markets.
- Dubai has strong economic ties with major global economies, such as the United States, China, and the European Union, allowing investors to benefit from global economic policies and trends.
- A resilient, dynamic, and well-diversified economy supported by strong economic foundations.
- Forward-looking regulations and regional governance standards, government effectiveness, and institutional empowerment.
- A smart city, embracing a culture of innovation and digitisation.
Financial Services
The DFSA categorizes Money Services Providers to effectively regulate them, by clearly defining their service offerings within the DIFC Free Zone.
| License Category | Financial Services |
|---|---|
| Category 3C | • Issuing Stored Value |
| Category 3D | • Providing or Operating a Payment Account • Executing Payment Transactions on a Payment Account • Issuing Payment Instruments |
| Category 4 | • Arranging or Advising on Money Services • Providing Money Transmission Services |
Regulatory Capital Requirements
Minimum regulatory capital requirements vary between the three License Categories as per the table below.
| License Category | Capital Requirements |
|---|---|
| Category 3C | From 500,000 USD, depending on the combination of services to be offered. |
| Category 3D | From 200,000 USD, depending on the nature, quantum of business and annual expenditure. |
| Category 4 | From 30,000 USD, depending on the combination of services to be offered. |
Application Fees
DFSA application fees depend on the Category of License to be acquired, the detailed scope of activities, and whether the applying entity is part of a group, of a multi-level structure or the DFSA will act as a lead supervisor of part of the applying entity’s group. Incorporation fees for the establishment of the legal entity in DIFC are independent of the License Category.
Annual Fees
License renewal fees to the DFSA depend on the License Category, the level of expenditures and any additional financial services specified on the license. The recurring fees payable to the DIFC remain independent of the License Category and financial services offered, as well as of the level of expenditure.
Licensing Timeframe
An MSP licensing procedure varies depending on the category. In our experience from the initial introduction to being fully operational, the process can be concluded in under 12 months. Yet, we advise our clients to budget for 12 to 14 months for the DFSA different License Categories. This is in anticipation of the varying workload by the regulatory bodies and reverting to both DFSA and DIFC promptly with the required information and/or additional documents.
Obtaining a Money Services Provider License with SALVUS
The SALVUS Payment Services Licensing team, comprised of industry-leading experts, stands ready to assist you in obtaining the most appropriate MSP license by employing a project management approach. We support you throughout the entire licensing process by acting as a reliable link between the supervisory authorities, DFSA and DIFC and your applying Money Services Provider.
Once your MSP license has been successfully granted, our Regulatory Compliance team is determined to guide you in meeting all your regulatory and reporting obligations.
Please contact us at info@salvusfunds.com if you are interested in establishing a Money Services Provider in Dubai; we look forward to working together and being of value.