The document provides information about obtaining a regulated license in the Dubai International Finance Centre (DIFC). It discusses the types of licenses available, including commercial licenses for fintech companies and an innovation testing license. It also outlines the regulatory bodies that oversee DIFC operations and the process for applying for and obtaining a regulated license, which involves submitting documentation for review and receiving approvals.

1. DIFC REGULATED LICENSE
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2. The Dubai International Finance Centre (DIFC) formed in 2004 is a sought-after
jurisdiction for financial and banking licenses. Since its start, DIFC has been home to
many leading banks, financial institutions, and insurance companies, serving a large
clientele in the region. DIFC follows international law, which has prompted many
global investors to have their presence in DIFC and also supervises Dubai’s financial
enterprises’ strategic growth, operational management, and administration.
HLB HAMT, as a leading business consultant in DIFC, has a team of capable financial
specialists that give crucial advice to businesses looking to establish operations. The
team assists with incorporation, government rules, and post-incorporation procedures,
starting with consultation services and a fundamental foundation.

3. FINTECH IN DIFC
Financial technology (FinTech) is an integral part of the financial services sector’s
advancement. Fintech is progressing, with regulators and governments paying more
attention to the influence that businesses will have on the regional economy. DIFC
adheres to stringent data protection measures that are in accordance with international
norms. DIFC, having been named one of the best ten fintech centres in the world, is
ideally positioned to promote this expansion and act as a breeding ground to leverage
its massive potential.
1. Commercial Licenses: DIFC provides specific commercial licenses for FinTech
companies, enabling them to function within the centre while benefiting from top-
notch infrastructures at a low cost. These license holders will also have access to
the DIFC work hub, which is a co-working space.

4. 2. Innovation Testing License (ITL): The DIFC’s regulatory authority, the DFSA,
assists ITL owners in testing unique and innovative financial products, activities,
and business ideas without being subject to regulatory requirements.
DIFC features one of the most comprehensive FinTech and venture capital settings in
the region, with cost-effective licensing choices, suitable laws, innovative programmes,
and developmental start-up financing, since it is the region’s largest financial hub.

5. DEWS (DIFC EMPLOYEE WORKPLACE SAVINGS)
The DEWS plan, which was implemented in February 2020 for employees stationed in
the DIFC, was the first of its type in the market to provide a systematic end-of-service
benefits plan. Employees can effortlessly plan for their financial future with this well-
funded and professionally sound contribution plan. DEWS also have a voluntary
savings scheme that allows DIFC workers to contribute to their savings.
By revising the end-of-service benefit plan to meet with worldwide retirement savings
norms, the DEWS support employers and employees and also DIFC’s objective of
driving the evolution of the finance sector in the region.

6. BENEFITS OF FORMING BUSINESS IN DIFC

7. DIFC regulatory entities include:
1. DIFC Authority (DIFC): The DIFC Authority, which was founded as a legal
organization affiliated to the Government of Dubai under Dubai Law No. 9 of 2004, is
in responsible of monitoring the operation and administration of DIFC.
2. The Dubai Financial Services Authority (DFSA): This is a government agency that
regulates the financial services industry in Dubai. The DFSA is the integrated regulator
responsible for the authorization, licensing, and registration of institutions and individuals
who intend to operate financial and operational services in or from DIFC.

8. 3. DIFC Courts (DIFC Judicial Authority): The statutory duty of the DIFC Courts is to
properly execute DIFC’s civil and commercial legislation.
4. The Registrar of Companies (ROC) is a government agency that oversees the
registration of businesses. The ROC is in charge of providing advice, receiving,
examining, and processing all applications filed by potential DIFC registrants wanting
to establish a presence in the DIFC.
5. Registrar of Securities (ROS): The ROS is in charge of documenting and registering
security pledged against loans, guarantees, and other financial transactions, and
thereby establishing priority.
6. Registrar of Real Property (RORP): The RORP safeguards the interests of
purchasers, sellers, and lessees.

9. HOW TO SET UP A COMPANY IN DIFC?
DIFC company registration, like any other business setting, is performed through a procedure that
the firm owners are obligated to follow. When the processing of their DIFC company registration
follows the right regulations, the businessmen’s schedule and timeframe for beginning their firm can
be met.
For setting up a business in UAE, there are two types of licenses available.
 Regulated License – This refers to any type of registration that is associated with banking and
finance-related business operations.
 Non–Regulated License – This refers to any type of business registration that isn’t associated with
banking or financial transactions.

10. NON-FINANCIAL & FINANCIAL SERVICES IN
DIFC
Non-financial Service
The most effective financial hubs generate a wide range of economic activities. Non-
financial companies supply the service that main financial companies uses to perform
profitably. Business consultants, legal companies, and professional service providers
are among them. Nevertheless, not all of it focuses on work. These non- financial
services contribute to the development of a recreation and lifestyle setting.
Professionals seek a luxury environment, as well as personal services like tailoring,
salons, gyms, retail outlets like restaurants and coffee shops, and even fine dining
alternatives to amuse their clients. They also give non-financial activities to
establishments like hotels and educational institutions too.

11. Financial Service
The Dubai Financial Services Authority, or DFSA, requires firms involved in obtaining
financial services from the DIFC to file proposals. The sort of business that the
applicant wants to run determines the type of license that is needed.
It’s also worth noting that in order to obtain a full banking license (i.e., a DIFC
Category 1 license), the DIFC entity must be either a branch or a subsidiary of a bank
regulated by a regulator in a jurisdiction acceptable to the DIFC, or a joint venture
between two or more banks regulated in a jurisdiction satisfactory to the DIFC. The
kinds of financial activities that an Authorized Firm is authorised to offer to define the
range and category of an Authorised Firm’s license. Let’s look at how financial services
are categorized.

12. (Category 1) Accepting Deposits/Managing an Unrestricted Profit Sharing Account A
Category 1 Authorised Firm is one that has been granted permission to provide the
financial service of accepting deposits or managing a profit-sharing investment
account (received on an unrestricted basis). Although an authorised Firm in this
category may be licensed to provide other financial services, its authorization to
accept deposits and/or manage a profit-sharing investment account is what
distinguishes it as a Category 1 Authorised Firm.
(Category 2) Principal Investor (not matched)/Providing Credit This is a licensed
authorised Firm that provides the financial services of dealing in principal
investments and providing credit. In addition to this activity, an authorised Firm in
this category may be authorised to conduct other Financial Services from Categories
3A, 3B, 3C, or 4, provided that it is not authorised to provide Financial Services from
Category 1.

13. (Category 3A) Dealing in Investments as Principal/Dealing in Investments as Agent
An Authorised Firm is permitted to take out one or more of the Financial Services
of:
1. Dealing in Investments as Principal (where it only does so as a Matched
Principal)
2. Dealing in Investments as Agent (where it only does so as a Matched Principal)
An authorised Firm in this category may be permitted to undertake other Financial
Services found in Categories 3B, 3C, or 4, but it may not conduct any Financial
Services found in Categories 1 or 2.

14.  (Category 3B) Providing Custody (for a Fund)/Acting as a Trustee of a Fund This type of
authorised Firm is allowed to provide custody (but only for a Fund) and act as a trustee
for a Fund. This type of authorised Firm can provide financial services in Categories 3C
and 4, but not in Categories 1, 2 or 3A.
 (Category 3C) Managing a Collective Investment Fund/Managing Assets An authorised
Firm in this category may be licensed to provide one or more of the following Financial
Services:
1. Managing a Collective Investment Fund
2. Managing Assets
3. Providing Trust Services as a trustee of an express trust
4. Providing Custody (other than for a fund), and
5. Managing a Profit Sharing Investment Account (received on a restricted basis)
Financial Services in Category 4 can be provided by an authorised Firm with a 3C license,
but they cannot be provided in Categories 1, 2, 3A, or 3B.

15. (Category 4) Credit Arrangements or Investment Deals / Financial Product Advice
1. Organising Investment Deals
2. Recommending on Financial Products
3. Arranging Custody
4. Insurance Intermediation
5. Insurance Management
6. Operating an Alternative Trading System
7. Providing Fund Administration
8. Coordinating Credit and Advising on Credit
9. Operating a Fund raising Forum, and
10. Providing Trust Services

16. (Category 5) Islamic Financial Institutions
An Islamic Financial Institution administers a profit-sharing investment account and
conducts its whole operation in compliance with Sharia standards (received on an
unrestricted basis).

17. THE DUBAI FINANCIAL SERVICES
AUTHORITY (DFSA)
The Dubai Financial Services Authority (DFSA), an independent regulator that
awards licenses and controls the operations of all banking and financial institutions in
DIFC, has been at the crux of the DIFC paradigm. The DFSA has figured prominently
in ensuring that financial institutions have a strong, resilient, safe, and growth-
oriented infrastructure for their operations. The DFSA takes a risk-based approach to
regulation. The independent regulator focuses and prioritises its efforts on avoiding
unacceptably high and needless risks. As a result, the DFSA is dedicated to achieving
a high level of competence in all aspects of its administrative and consultative
operations.

18. REGULATED LICENSE REGISTRATION IN
DFSA
Businesses must be approved and get a license from the DFSA in order to perform
financial services in or from the DIFC. The DFSA issues authorization in the format of a
license that outlines the types of Services that can be done. Businesses must be registered
with the DFSA in order to conduct designated non-financial business. The DFSA performs
its first evaluations as a risk-based regulator to verify that enterprises follow the DFSA’s
ethical guidelines.
It’s important to take the time to prepare all of the required papers and paperwork before
submitting an application. It is critical to plan ahead of time, whether you are a new
investment firm or an existing payment institution looking to expand your business in
Dubai’s International Financial Centre.

19. By using the most recent DFSA application forms, you can prevent having to redo the procedure due
to obsolete requirements. Furthermore, confirm that the DFSA recognises the business operations to
be offered and that they correspond to certain financial and associated services.
In the United Arab Emirates, the procedure for obtaining authorization is as follows:
To gain license from the relevant authority, an applicant company must go through a formal process.
For example, obtaining approval from the DFSA entails the following steps:

20. (a)Submitting a Letter of Intent – A Letter of Intent typically contains the
following topics:
 The applicant’s objective and the actions that will be
carried out;
 Grounds for establishing a business in the DIFC;
 Corporate structure and founding directors
 Resources and functions – which will be based in the
DIFC entity and what their roles will be.
 The need for permanent office space.
(b) A Regulatory Business Plan must be submitted
(RBP)
The RBP should include the plan and justification for establishing a
DIFC operation, as well as how the company will be managed and
controlled. The DFSA must comprehend the applicant firm’s business
model in order to guarantee that it is permitted for the appropriate
financial services, investment types, and client categories, as well as to
examine the adequacy of the applicant firm’s resources. The applicant
company will be required to:
 Determine all financial services and other activities that will be
provided;
 Compile a list of all potential commercial and regulatory risks;
 Describe in broad terms how it intends to monitor and manage these

21. (c) Additional DFSA Application Forms and accompanying paperwork must be
submitted
From the date of receipt of the applicant firm’s full and complete application,
processing each application for authorisation.
(d) Performing a thorough review procedure
All applications are subjected to a thorough evaluation by the DFSA. Multiple
rounds of follow-up questions, explanations, and even an interview to clearly
understand the project and their duties are all part of this procedure.

22. (e) In-Principle approvals are granted
The DFSA issues an In-Principle Approval (IPA) after a successful
assessment process. According to the IPA, the DFSA invites the user to the
center if all of the IPA’s prerequisites are met.
(f) ROC Process of DIFC
The DIFC Registrar of Companies (ROC) is in charge of processing
applications for legal organisations to be established in the DIFC. The DIFC
Commercial License is issued at the successful completion of the procedure.

23. Basic guidelines of financial categories
The licensed firm may only execute the operations for which it has been officially authorised
in each DIFC financial category. Authorized enterprises must obey the DFSA rulebook’s
guidelines, which include the following restrictions:
1. Clients may only be offered items or services that comply with the DFSA’s conduct of
business client categorization rules. An authorised firm must guarantee that its business
and financial operations are conducted in accordance with the DFSA and DIFC’s rules and
regulations in all aspects. Breaching the laws and regulations may result in revoking the
authorised firm’s license. This might be in relation to one or more of the company’s financial
services. Such repercussions may also apply to authorised individuals or other persons
performing any tasks in the authorised firm if the DFSA deems it essential. Any violation of
the aforementioned people’ requirements empowers the DFSA to prevent them from
executing their functions, or, in the case of authorised individuals, to suspend or revoke
their status.

24. FREQUENTLY ASKED QUESTIONS –
REGULATED LICENSE
How to set up an insurance advisory firm in UAE?
To start an insurance business in Dubai, you must first register with the Dubai
Economic Department and then receive a license from the Insurance Authority. The
type of services supplied determines which operating license is awarded.
How to set up financial services company in Dubai?
To set up a financial services company in Dubai, a company needs to have a paid up
capital of at least Dh500,000. It needs to be registered with the appropriate authorities
and present basic documentation such as a certified copy of passport, trading license
and memorandum and articles of association.

25.  How to setup a regulated license in ADGM?
If you would like to set up a regulated ADGM license, it is best to start by consulting with
the ADGM licensing and regulatory services. They will be able to tell you whether or not
your product requires a license and how to go about getting one. Before they can help you,
though, they will need an accurate description of your product.
 What are the procedures for regulated license in UAE?
The United Arab Emirates has been working to build a regulated environment for the
financial industry. In order to issue a license in the United Arab Emirates, businesses must
be registered with their respective central bank as well as sign a Memorandum of
Understanding (MoU) with Dubai International Financial Centre Authority (DIFCA). The
MoU outlines particular objectives of any given company’s activities and can also allow
certain companies to make use of foreign currency transactions.

26. CONTACT US
HLB HAMT
Level 18, City Tower-2,
Sheikh Zayed Road
PO Box 32665
Dubai – United Arab Emirates.
Tel: +971 4 327 7775
E-mail: dubai@hlbhamt.com