Authorised Firm – DFSA
What are 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).
Why establish an Authorised Firm in Dubai?
An established Authorised Firm in Dubai benefits from:
- The DIFC’s operation under a unique legal framework, aligned with the English Common law accompanied by its own particular 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 capital or profit repatriation and no currency exchange controls for existing groups’ branches or subsidiaries in DIFC.
Each license category authorised by the DFSA prescribes a specific set of financial services. The license categories relating to the provision of investment services are Category 3A and Category 4.
|License Category||Financial Services|
|Category 3A||• Dealing in Investment as Principal; restricted to do so only on a Matched Principal basis.
• Arranging Deals in Investments.
|Category 4||• Arranging Deals in Investments.|
Regulatory Capital Requirements
Minimum regulatory capital requirements vary between the two license categories as per the table below.
|License Category||Capital Requirements|
|Category 3A||Higher of:
• 500,000 USD
• Risk Capital Requirement
• Expenditure Based Capital Minimum
|Category 4||Higher of:
• 10,000 USD
• Expenditure Based Capital Minimum
DFSA application fees depend on the Category of License to be acquired 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.
Under the DFSA Category 3A License, the entity can receive permission to hold and control client funds or assets, subject to a one-off client assets regulatory license endorsement fee to the DFSA.
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 expenditures.
In our experience, the DFSA Category 3A licensing procedure can be concluded in under 12 months and the DFSA Category 4 under 6 months. Yet, we advise our clients to budget for 12 to 14 months for DFSA Category 3A and 8 to 10 months for DFSA Category 4. This is in anticipation of the varying workload by the DFSA and reverting to the DFSA promptly with the required information and/or additional documents.
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 Category 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 that.
We are ready to help you fulfil your business needs by understanding the unique challenges you have to face. Please contact us at firstname.lastname@example.org to discuss your licensing needs. We look forward to working together and being of value.