Dubai Financial Services Authority (DFSA)

What is the DFSA, DIFC and what do they do?

The Dubai Financial Services Authority (DFSA) is the independent regulatory authority for all activities related to financial and ancillary services in Dubai. The Dubai International Financial Centre (DIFC) is a financial-free zone attracting some of the world’s finest investment firms, investment funds, fintechs, and venture capital investment funds. Further, the DFSA works symbiotically with the DIFC in facilitating the largest financial hub for the Middle East, Africa and South Asia (MEASA).

 DFSA Category 3A License

The Category 3A license, regulated by the Dubai Financial Services Authority (DFSA), authorises an investment firm to carry out the financial services of

  • Dealing in Investment as Principal,
    1. Restricted to do so only on a Matched Principal basis only,
  • Arranging Deals in Investments.

The entity to be licensed

  • will be incorporated in Dubai’s International Financial Centre (DIFC) with approx. 23,000 USD in total set-up fees and 15,000 USD in recurring annual fees,
  • can be a subsidiary a regulated entity in approved jurisdictions,
  • can onboard retail clients through a one-off 20,000 USD Retail Clients regulatory license endorsement fee and compliance with the DFSA’s requirements when engaging retail clients, and
  • can hold and/or control client funds or assets through a one-off 5,000 USD Client Assets regulatory license endorsement fee.

Fees to the DFSA

The one-off application fee to the DFSA is 25,000 USD, or 50,000 USD if 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.

The recurring annual Category 3A license renewal fee is 25,000 USD, plus

  • 1,000 USD for each 1,000,000 USD of expenditure,
  • 1,000 USD for each additional financial service specified on the license.

Minimum Regulatory Capital Required

The Minimum Capital Requirement for DFSA Category 3A Licensed entities is higher of 500,000 USD or the Expenditure Based Capital Requirement (EBCM) or Risk Capital Requirement (RCR).

Licensing Timeframe

In our experience, the DFSA licensing procedure can be concluded in under 12 months, yet we advise our clients to budget for 12 to 14 months, in anticipation of the varying workload by the DFSA and reverting to the DFSA promptly with the required information and/or additional documents.

DFSA Category 4 License

The Category 4 license, regulated by the Dubai Financial Services Authority (DFSA), authorises an investment firm to carry out the financial service of

  • Arranging Deals in Investments.

The entity to be licensed

  • will be incorporated in Dubai’s International Financial Centre (DIFC) with approx. 23,000 USD in total set-up fees and 15,000 USD in recurring annual fees,
  • can be a subsidiary of a regulated entity in approved jurisdictions,
  • can onboard retail clients through a one-off 20,000 USD Retail Clients regulatory license endorsement fee and compliance with the DFSA’s requirements when engaging retail clients, and
  • cannot hold and/or control client funds or assets.

Fees to the DFSA

The one-off application fee to the DFSA is 15,000 USD, or 30,000 USD if 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.

The recurring annual Category 4 license renewal fee is 15,000 USD, plus

  • 1,000 USD for each 1,000,000 USD of expenditure,
  • 1,000 USD for each additional financial service specified on the license.

Minimum Regulatory Capital Required

The Minimum Capital Requirement for DFSA Category 4 Licensed entities is higher of 10,000 USD or the Expenditure Based Capital Requirement (EBCM).

Licensing Timeframe

In our experience, the DFSA licensing procedure can be concluded in under 6 months, yet we advise our clients to budget for 8 to 10 months, in anticipation of the varying workload by the DFSA and reverting to the DFSA promptly with the required information and/or additional documents.

How Category 3A and Category 4 licenses compare

FeaturesCategory 3ACategory 4
Fees• ~23,000 USD in total for DIFC set-up & 15,000 USD recurring annually
• 20,000 USD as a one-off fee to DFSA for onboarding retail clients
• 25,000 USD or 50,000 USD as a one-off application fee to DFSA depending on the structure of the applying entity
• 25,000 USD plus 1,000 USD for each 1,000,000 of expenditure and 1,000 USD for each additional financial service specified on the license in annual renewal fees payable to the DFSA
• ~23,000 USD in total for DIFC set-up & 15,000 USD recurring annually
• 20,000 USD as a one-off fee to DFSA for onboarding retail clients
• 15,000 USD or 30,000 USD as a one-off application fee to DFSA depending on the structure of the applying entity
• 15,000 USD plus 1,000 USD for each 1,000,000 of expenditure and 1,000 USD for each additional financial service specified on the license in annual renewal fees payable to the DFSA
Minimum Regulatory Capital Requiredhigher of 500,000 USD or the EBCM or RCRhigher of 10,000 USD or the EBCM
Licensing timeframeapprox. 12 monthsapprox. 6 months
Permitted to hold and/or control client funds or assetsYes, through a one-off 5,000 USD Client Assets regulatory license endorsement fee to the DFSANo

Obtaining a DFSA Category 3A or DFSA Category 4 License with SALVUS

We approach our licensing engagements in a project management manner. For our clients, this means we work as an extension of their team, leading the effort to gather internal data while producing all required documents and forms.

We optimise the DFSA Category 3A and 4 licensed entity’s expenditure through our know-how on the most efficient number of employees, outsourcing arrangements and external third parties to be engaged for what.

We are ready to help you fulfil your business needs by understanding the unique challenges you have to face. Please contact us at [email protected] to discuss your licensing needs. We look forward to working together and being of value.