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How does Law of Data Protection in DIFC guard the Personal Data?

How does Law of Data Protection in DIFC guard the Personal Data?
How does Law of Data Protection in DIFC guard the Personal Data?

Learn about the Law and Its Significance!

Understanding the Law of Data Protection in DIFC

As Personal Data Processing is a key factor, brushing up your knowledge about the Law of Data Protection in DIFC which gives an ample amount of protection to your personal data. Dubai International Financial Centre paved the way for data protection by adopting its most recent DIFC Data Protection Law (DP Law) No. 5 of 2020 for personal data processing. Like the Abu Dhabi Global Market (ADGM) Data Protection Regulations, the DIFC DP Law appoints a Commissioner of Data Protection as the supervisory authority. While both entities share common goals, they differ in the roles of Data Controllers and Data Processors.

The story of penalty in Law of Data Protection in DIFC

There was a non-compliance of a consulting firm to the DIFC DP law by not providing valid notice to data subjects, specifically contacts of new or existing employees, about the collection and use of their information for marketing purposes. The consulting used the personal Email addresses for direct marketing purposes without the knowledge of data subjects which is a breach of privacy and contravention to the DIFC DP law. A monetary penalty was imposed on the firm, amounting to $15,000 because of its non-compliance with the DIFC Data Protection Law.

Key Players in Law of Data Protection in DIFC: Data Subject, DPIA, and DPO:

· Data Subject: Individuals to whom personal data relates.
· DPIA (Data Protection Impact Assessments): Conducted for high-risk data processing, revealing potential risks to data subjects’ rights.
· DPO (Data Protection Officer): Oversees compliance, liaises with the Commissioner, conducts assessments, and manages DPIAs for high-risk processing activities.

Now, if a Data Breach happens, What’s Next?

In the event of a data breach, the Data Controller serves as the primary point of contact. It is the responsibility of the Data Controller to promptly notify the Commissioner of any breach involving personal data that puts the confidentiality, security, or privacy of a data subject at risk. Furthermore, the Controller must extend this notification obligation to the affected data subject if the breach is likely to pose a threat to their security or rights. This two-tiered notification process ensures transparency and timely communication in the face of potential risks to individuals’ personal information. Such measures align with the principles of the DIFC Data Protection Law, emphasizing the importance of swift action to mitigate the impact of data breaches on data subjects.

Penalties for Non-Compliance: While the DIFC DP Law specifies fines ranging from $10,000 to $100,000 for non-compliance, the Commissioner may impose fines beyond this range, deeming them reasonable and proportionate.

Tips to Comply with the Law of Data Protection in DIFC.

1. Clearly define lawful bases for processing personal and sensitive data.
2. Specify legitimate interests for transparent data processing.
3. Outline DPO duties and responsibilities.
4. Transfer data outside DIFC only to jurisdictions with adequate protection levels.
5. Inform data subjects when obtaining their personal data.
6. Clarify responsibilities among joint controllers, processors, and sub-processors.
7. Ensure data subjects’ rights are respected.
8. Promptly notify the Commissioner and data subjects of any personally identifiable information breaches.

MS’s Commitment to Data Protection in DIFC

In an era where personal data protection is paramount, understanding and complying with regulations like the DIFC DP Law is crucial. The above-mentioned case serves as a reminder that non-compliance can lead to significant penalties. As an advocate for data protection, MS emphasizes adherence to the DIFC DP Law to avoid penalties. Staying informed and implementing best practices are key to navigating the complex landscape of data protection in the DIFC.

click on the link to see a graphical presentation of the DIFC data protection carousel:
https://www.linkedin.com/feed/update/urn:li:activity:7159906525535211520

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Cracking the Code: ADGM Data Protection Regulations and Best Practices

Cracking the Code: ADGM Data Protection Regulations and Best Practices
Cracking the Code: ADGM Data Protection Regulations and Best Practices

In June 2023, A fraudulent phishing email that came from an employee of an ADGM company’s email address was reported to the Data Protection Office by ADGM Information Security. Even though the company filed a breach notice form, it lacked information in both the first notification and the follow-up assessment. Due to the company’s failure to non-cooperation with the Commissioner, insufficient organizational and technical measures, and inability to guarantee the proper security of personal data, the Commissioner of Data Protection in ADGM has issued a Direction under ADGM Data Protection Regulation 2021.

This case study is a clear indication of how stringent the Data Protection measures are in the Abu Dhabi Global Market. ADGM, the International Financial Centre (IFC) located in the capital city of the United Arab Emirates (UAE) has always kept data privacy as its top priority. ADGM Data Protection Regulation is the key factor that guards the data privacy in ADGM. By adding obligations for personal data processing, the ADGM Data Protection Regulation (DPR) was revamped in Feb 2021, replacing the 2015 Regulation.

Let’s explore a bit more about the ADGM Data Protection Regulation 2021;

As per Article 63, the ADGM DPR 2021 ensures the protection of Personal Data used by businesses and organizations in ADGM. In the cases of non-compliance, the Commissioner of Data Protection has enforcement powers to impose new regulations and obligations. To streamline the actions, the DPR has set up an Office of Data Protection and certain tools under it which makes the whole process easier.

ADGM follows the European Commission’s approach for Data Privacy and Protection for the security of data that is transferred out of ADGM by designating jurisdictions that are deemed adequate from a data protection perspective out of ADGM. Only if the recipient’s local laws guarantee a sufficient degree of protection for the Personal Data, then the data be transferred to a recipient situated in a jurisdiction outside ADGM.

Then, what is the Office of Data Protection?

The Office of Data Protection oversees data protection within ADGM, keeping track of Data Controllers, enforcing Data Controller requirements, and defending individual rights. It is necessary for all ADGM-registered entities handling personal data to register as Data Controllers. The Office of Data Protection maintains a register of Data Controllers in ADGM as a part of its regulatory functions and publishes the register publicly to promote transparency and openness. Also, there are Data Processors who must process the personal data.

The Data Controllers and Processors in ADGM Data Protection Regulation

Any individual or organization that chooses, alone or in concert with others, the goals, and methods for processing personal data in ADGM. Data Controllers decide how and why the data is processed. They should make sure that any processing of Personal Data that they handle conforms with the regulations. Data Controllers are required to promptly inform the Office of Data Protection about personal data breaches. This notification should occur without unnecessary delay and, if possible, within 72 hours of the controller becoming aware of the breach. Additionally, Data Processors are appointed on behalf of the

Data Controllers who have access to personal data. External service providers that have been designated by an ADGM Data Controller are examples of Data Processors.

You can make use of the tips given below to comply with ADGM Data Protection Regulations:

Register as Data Controller:
Register and renew annually with the ADGM Office of Data Protection.

Permits for Sensitive Data:
Apply for permits to process, transfer, and register data processors.

Compliance Principles:
Adhere to ADGM DP Law principles, including lawfulness, fairness, transparency, and accountability.

Data Protection Officer (DPO):
Appoint a DPO for systematic high-risk data processing.

Breach Reporting:
Report breaches to the Office of Data Protection within 72 hours.

Data Protection Impact Assessments (DPIAs):
Complete DPIAs for high-risk processing, reporting to the ADGM Office.

Sensitive Data Policy:
Implement policies for processing sensitive personal data.

Response Time:
Respond to individual data protection filings within 2 months.

MS’s Commitment to Data Protection Regulations in ADGM

The ADGM Data Protection Regulation 2021 is designed to offer comprehensive and robust measures to ensure the safety and security of personal data. MS, in line with its commitment to the highest standards, guarantees complete compliance with the ADGM Data Protection Regulations. This commitment not only serves as a safeguard against evolving threats but also acts as a catalyst, propelling your business to new heights in the ever-changing landscape of data protection.

Disclaimer :

Registered in Abu Dhabi Global Market (Registered No. 000007218),
We are not an ADGM Registered Corporate Service Provider.

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FTA Issues VAT Clarification on SWIFT Messages for Financial Sector Tax Recovery

FTA Issues VAT Clarification on SWIFT Messages for Financial Sector Tax Recovery
The Federal Tax Authority of the UAE has released VAT Public Clarification offering directives on using SWIFT messages for both VAT documentation and the recovery of input tax.

The Federal Tax Authority of the UAE has released VAT Public Clarification offering directives on using SWIFT messages for both VAT documentation and the recovery of input tax.

The UAE financial institutions are treated as engaging in self-supplies when availing of interbank services from foreign banks. This means they must handle VAT obligations as if they were the service providers, including fulfilling all tax-related duties and generating tax invoices for the services received. However, SWIFT (Society for Worldwide Interbank Financial Telecommunications) messages, commonly used to document international bank charges and their underlying transactions, might not satisfy the required criteria to be acknowledged as tax invoices for UAE VAT compliance. But On February 5, 2024, the United Arab Emirates Federal Tax Authority (FTA) issued VAT Public Clarification VATP036 that addresses the use of SWIFT messages for VAT documentation and input tax recovery, initially focusing on the Financial Services (FS) sector but potentially impacting companies across various industries.

The question is, what made FTA simplify the process?

The FTA emphasizes that due to the substantial volume of SWIFT messages received, mandating Financial Institutions to self-issue a tax invoice for each SWIFT transaction would be impractical. Hence, the FTA introduces a simplification measure. If a SWIFT message, termed a “Qualifying SWIFT message,” includes adequate information to ascertain the details of the supply, UAE Financial Institutions are exempted from self-issuing tax invoices for interbank services received from non-resident banks when such SWIFT communications are received. Consequently, for input tax recovery purposes, a SWIFT message is deemed acceptable documentary evidence if it provides the necessary particulars of the supply.

A SWIFT message becomes a ‘Qualified SWIFT’ message if it includes;

• Name and address of the non-resident bank (SWIFT sender/supplier).
• Name of the UAE financial institution receiving the service (SWIFT receiver/customer).
• Date of the transaction.
• SWIFT message reference number.
• Transaction reference number.
• Description of the transaction.
• Consideration charged, and currency used.

Let’s explore who stands to gain from this simplification;

Financial Services Sector: The provided clarification serves as a beneficial simplification for the UAE FS sector, reducing administrative burdens. Businesses within this sector need to assess whether their exchanged SWIFT messages meet the criteria of a “Qualifying SWIFT Message” to benefit from this simplification. Adjustments to existing documentation and governance may be necessary to take full advantage of this provision.

Potential Broader Industry: The FTA explicitly states in the Public Clarification that, for service imports, the recipient must issue a valid tax invoice to itself, as the VAT legislation places the responsibility for “all tax obligations” on the recipient. If this clarification is intended as a general statement, it implies that any UAE business importing services, regardless of industry, would be obligated to self-issue a tax invoice to comply with UAE VAT invoicing requirements. This additional requirement, along with reporting output tax and recovering input tax if applicable, could become standard practice for all industries. Whether this self-invoicing mandate extends beyond the services discussed in this clarification remains to be cleared, as the FTA’s practical enforcement in various industries is yet to be determined.

How can MS help you with VAT Clarification on SWIFT Messages for Financial Sector Tax Recovery?

If you are uncertain about the appropriate course of action in the use of SWIFT messages for VAT documentation and input tax recovery, seeking guidance from experts like us could be a prudent decision. There’s a risk that the government might reject your request to claim the Input VAT if the documents did not have ample information. MS can make sure that you completely adhere to the regulations and make best use of the recent simplification.

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“UAE is the perfect combination of ambition, resources, and motivation”.

UAE is the perfect combination of ambition, resources, and motivation
Check out this insightful conversation in the recently concluded COP28 between Satya S. Tripathy, Secretary-General of GASP, and MS CEO Mohammed Shafeek.

Check out this insightful conversation in the recently concluded COP28 between Satya S. Tripathy, Secretary-General of GASP, and MS CEO Mohammed Shafeek.

The private finance is for the public good, that is what Satya S. Tripathi, the changemaker of Global Alliance for a Sustainable Planet (GASP) has always leveraged. Adding to the vision of the country and solidifying Team MS’s commitment to sustainability, Our CEO, Mohammed Shafeek, engaged in a noteworthy conversation with Satya S. Tripathi on the momentous occasion of COP28 hosted by the UAE marking a pivotal step towards a resilient and environmentally conscious future. With the largest number of registered delegates in history, COP28 addressed the issues of rapidly changing Earth’s climate and the urgent action needed to avoid the most damaging consequences for people and nature.

UAE: The nation with visions and actions

The discussion with Satya S. Tripathi highlights the imperative for sustainability and underscores the role of platforms in addressing crises such as Global Warming. During the conversation, he emphasized that the UAE holds a pivotal role in COP28, focusing on actionable measures. The President of the UAE, HH Sheikh Mohammed bin Zayed Al Nahyan, committed to a $30 billion fund and announced the establishment of a global center for Climate Finance and Food Systems Declaration. Tripathi commended the nation for directing resources toward worthy causes, citing examples like MASDAR, Abu Dhabi Global Market (ADGM), and MUBADALA, which have substantial investments in sustainability. According to Tripathi, this combination of ambition and resources creates an ideal environment for addressing and combating climate challenges.

The challenges and solutions

In answering the questions related to the global challenges, Tripathi with no doubt pointed out that there is a heightened awareness among people regarding the escalating climate issues, and they are grappling with a sense of being overwhelmed by it. He stressed that it is crucial for actions to align with this awareness, particularly as countries in dryland regions like the Middle East are poised to be disproportionately affected. Tripathi further emphasized that technological advancements, innovation, and the active involvement of young people can play a substantial role in bringing about meaningful change in the situation. He commended the positive development of young negotiators participating in Climate Youth, expressing a warm welcome to their engagement.

Watch the full video of the talk between Satya S. Tripathy and CEO Mohammed Shafeek on COP28. Click the link below.

https://youtu.be/vMu5Bvb7oeU

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Everything you need to know about ITL Licenses in DIFC Dubai

Navigating the Financial Landscape: Unveiling the Dynamics of Wealth & Asset Management under a Category 3C DIFC License"
Navigating the Financial Landscape: Unveiling the Dynamics of Wealth & Asset Management under a Category 3C DIFC License"

In the dynamic UAE landscape, innovation stands tall as a cornerstone of economic advancement. The top ranking in Global Innovation Index in a regional level continues to solidify its position as a global leader in innovation, drawing businesses keen on placing innovation at the forefront of their endeavours to the UAE. Dubai is one of the destinations where UAE’s innovative businesses are stimulated and significantly impacted the financial services sector in the UAE. Adding more to the trend, The Dubai International Financial Centre (DIFC) is serving as the eminent international financial hub across the Middle East, Africa, and South Asia (MEASA) is issuing Innovation Testing Licence (ITL) Programme to catalyse innovation within the DIFC while mitigating associated risks. The license is designed for entities seeking to introduce novel financial products and services, such as payment solutions, wealth management tools, tokenized payment services, and biometric-enabled financial offerings, the ITL Programme functions as a regulatory sandbox. Within this controlled environment, ITL holders can methodically test and refine their innovations under the supervision of the DFSA.

Key Objectives of the ITL DIFC Programme:

– Uphold regulatory objectives.
– Provides a secure space for testing innovative financial products and services.
– Foster collaboration with innovative market participants.
– Enhance supervisory insights.
– Facilitate the transition of successful ITL holders to an unrestricted licensing status.

However, it’s crucial to understand what the ITL DIFC Programme does not entail:

– Waiving regulatory requirements.
– Granting preferential treatment over incumbent entities.
– Predicting or influencing user/market acceptance.
– Test RegTech solutions.
– Guaranteeing automatic progression to an unrestricted licensing status.

What are the criteria for qualifying for the ITL DIFC Programme?

a) Offer an innovative product or service, either by introducing a new type of offering or by applying innovative technology to an existing one.

b) Engage in a financial service activity that falls within the DFSA’s regulatory scope and can be conducted from or within the DIFC.

¢) Be prepared to initiate live testing of their business with customers.

d) Have plans to expand their business within or from the DIFC after completing successful testing.

Are you still trying to figure out the costs for the ITL Licensing?

The DFSA’s ITL fee is USD 5,000, covering the application process and the testing period. Other costs include registration, incorporation, and license fees, along with workspace provisions. For technology companies, specific expenses include:

a. DIFC Incorporation and License fee: US$ 1,500

b. Co-working space in the DIFC Innovation Hub – starting from US$ 500 per desk.

By incorporating these costs, technology companies can accurately gauge the financial implications associated with obtaining an ITL within the DIFC.

Why MS for DIFC Innovation Testing License?

ITL in DIFC can have lasting advantages to your business, MS streamlines the process of acquiring an ITL, saving you time and effort. By leveraging our local regulatory knowledge and established relationships within the DIFC, MS accelerates the licensing process. We provide a tailored approach that combines regulatory proficiency with your business’s specific innovation goals, facilitating your success within this globally recognized financial hub.

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Sow, Grow, and make your Agribusiness Dreams Thrive in the DMCC Free Zone Dubai

The world’s largest vertical farm is in Dubai which can produce 900 tons of leafy greens annually, using less water than growing in fields. In Dubai, the plan for setting up an Agri Hub that will create spaces for farmers to sell their products to consumers directly is also under process. It is in the heart of the same Dubai, where the Dubai Multi Commodity Centre (DMCC) is situated which is renowned for fostering diverse business landscapes, and welcomes your agribusiness vision.

Why DMCC Free Zone Dubai for starting a business in agriculture?

In DMCC, the growth in the value of global Agro exports from 2000 to 2020 is 270% and the export value of the agriculture market in 2023 is $490.1 billion. This itself proves that DMCC can be your best option to start a business in the agricultural field. DMCC’s Agro Ecosystems covers a wide range of agricultural products, including grains, coffee, tea, sugar, soy, and spices. They are leading the way in expanding agricultural trade in the face of growing concerns about food security by providing a one-stop shop for importers and exporters to increase their global reach.

What to bear in mind before starting an agribusiness in Dubai’s DMCC?

1. Sowing the seeds of success

To commence your journey in DMCC as an Agribusiness entrepreneur you should abide by the regulatory landscape of DMCC in every step. The regulatory framework in DMCC is flexible and in line with international practices which will aid your business to ace globally.

2. Knowing the Agricultural terrain

The dynamic Agroecosystem in DMCC is capable of advancing agribusiness, all you need to do is to understand the opportunities and challenges in the DMCC that will help you to make the business journey seamless.

3. The cultivation of Innovation

Just setting up an Agribusiness is not enough for you to harvest success; you must foster innovation to build your business beyond the boundaries. The latest updates and trends in the agribusiness in DMCC can be explored to have a lasting future in the market.

4. Seamless financial and legal journey

If you are planning to set up an Agribusiness in DMCC, you need to have a bank account. A solid financial foundation for your Agribusiness is always necessary to make your business journey smooth. You should always watch the legal aspects of your business to comply with the law.

How can MS help you build your business in DMCC?

In DMCC, you have the field to cultivate success in Agribusiness and you have MS to pave the path. MS provides the expertise to ensure your Agribusiness thrives in this dynamic and innovative DMCC environment. All you need to embrace success by setting up an agribusiness in DMCC is a trusted partner like MS.

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How DMCC Free Zone Becomes the Best Catalyst for Your Business Success in Dubai?

Unveiling Success: Dubai’s DMCC #1 Free Zone for Global Triumph
Panorama of the luxury center of Dubai,Dubai,United Arab Emirates

The 4,000-year-old Silk Route of Dubai was a key trading route of the bygone era. Now the city of dreams in the 21st century is expanding its commercial influence by having Dubai Multi Commodity Center (DMCC) Free Zone, crowned as “Global Free Zone of the Year” and as the “#1 Trade Hub” for an impressive nine years in a row.

DMCC can make your business dreams come true as it is one of the principal commercial powerhouses today, accounting for 11% of all foreign direct investment in the emirate. At the crossroads of Europe, Asia, and Africa, in terms of infrastructure, location, diversity, and so on, DMCC opens the door to access the global markets and to enjoy the advantages of setting up in a free zone.

Through visionary leadership, strategic planning, and an investor-friendly business climate, DMCC has everything to make your business rise, shine, and succeed.

What makes DMCC Freezone stand out?

1. Strategic Location

The access to international markets makes Dubai, the perfect place to trade. The global connectivity through international ports and airports brands Dubai as the strategic location to set up your business.

2. World-Class Infrastructure

The DMCC Free Zone is home to cutting-edge facilities and services that guarantee businesses have access to the best, which promotes innovation and growth. Here, you have everything to aid your business.

3. A community that nurtures a business environment

DMCC is more than a business hub; it’s a thriving community that fosters growth through collaboration and innovation. DMCC Free Zone offers entrepreneurs 100% business ownership, full repatriation of profits and capital, and zero currency restrictions, creating a supportive network for businesses of all sizes.

4. Industry Diversity

The diversity DMCC offers you is not limited to a single aspect. In terms of commodities, technology, finance, and more, this Free Zone holds all the facets to make your business succeed and there are numerous possibilities for cross-industry synergies.

5. Free Zone Benefits

DMCC as a Free Zone can be the best place to begin your business. In DMCC, you get to enjoy tax exemptions, simplified registration processes, and a range of other incentives to make your business full-fledged.

How Dubai Becomes the Ideal Destination for Your Business?

The one-word answer will be Yes! Dubai has anything and everything that can make your business excel in all aspects. In the last few years, Dubai has built its place as a major economic force in the world. The Dubai Economic Agenda D33 aims to double the size of Dubai’s economy over the next decade and to consolidate its position among the top three global cities through 100 transformational projects. The robust strategic location and world-class connections offer efficiency and brand Dubai as a pro-business hub. It is up to you to decide what specifications you need to use in Dubai to make your business thrive.

How can MS help you build your business in DMCC Freezone?

With proven experience in the dynamic business landscape of DMCC, MS can be your ally if you are looking for someone to help you set up a business or make your business surge. Guiding you to take the right decision in DMCC will help you to attain success in your business. As a team MS aids you in every step and makes sure that you get success more than what you expect in DMCC.

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UAE Federal Supreme Court established new principles for taxpayers, tax advisors, and tax litigators in respect of Federal taxes.

Are you aware of the new Tax principles established by the UAE Federal Supreme Court?
a quick guide to understand uae tax principles by MS

Are you aware of the new Tax principles established by the UAE Federal Supreme Court?

No worries, we are decoding the recent tax principles for taxpayers, tax advisors, and tax litigators through our new segment What Does That Mean? Here, things are Swift, Simple, and Sharp!

Key Tax Principles:

1. Legislative Authority Holds the Highest Power: TAXES COME FROM LAWS…

Taxes are determined by laws passed by the government. The court rules about how much tax to pay and how to settle it must come directly from these laws.

2. Following the Law with Precision: NO ROOM FOR MISINTERPRETATION…

Tax decisions by the FTA must follow the law, and due dates for tax payments are based on legal rules, not when the decisions are made. This highlights how crucial is to handle taxes in accordance with the law.

3. Different Penalties for Different Situations: MISTAKES ARE MISTAKES. BUT…

The FTA can penalize you for not paying enough taxes, even if you admit your mistake. But it will be different if you admit a mistake in your tax voluntarily from those for paying your taxes late.

4. Adding Up Penalties for Multiple Mistakes: THERE IS A DIFFERENCE…

If you make errors related to a specific tax law, you’ll face penalties for each mistake you admit, says Article 55 of the VAT Executive Regulation.  Hence, there is a distinction between primary tax laws and how taxes are processed.

5. Following the Right Steps to Get Penalties Waived: ABIDE THE LAWS…

If you want to avoid penalties, you must follow the steps outlined in the Tax Procedures Law. You can’t ask the courts directly to remove penalties which emphasizes the importance of adhering to FTA’s procedures.

In a nutshell by MS

The recent decision by the Federal Supreme Court contributes to the establishment of a fair and organized tax system through the management of taxes in the UAE, emphasizing the significance of law adherence, procedural consistency, and a clear understanding of roles within the tax system. The ruling ensures that individuals and businesses fulfill their financial obligations and maintain the integrity of the UAE’s tax structure. It brings out greater clarity in laws avoiding the complexities and confusion which can ultimately save valuable time for companies.

Disclaimer:  Content posted is for informational & knowledge sharing purposes only and is not intended to be a substitute for professional advice related to tax, finance or accounting. No warranty whatsoever is made in this regard, and it is not intended to provide and should not be relied on for tax or accounting advice. The content posted is subject to future amendments / changes / clarifications in the regulation by the authorities. For any clarifications, you may contact our tax team.

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How Vision 2030 shape Dubai’s financial future by issuing DIFC Innovation Licenses?

Connecting 72 countries with a combined population of approximately 3 billion and an estimated GDP of USD 8 trillion, Dubai, a global FinTech hub, continues to reshape traditional financial services worldwide. Aligned with the ambitious D33 Agenda to position Dubai among the top four global financial hubs by 2033 and the DIFC’s 2030 strategy to shape the future of finance and innovation, the 2nd edition of the Dubai FinTech Summit aims to foster cross-border collaboration and innovation. This event plays a crucial role in transforming the global FinTech sector, supporting the broader goals of the region by issuing new DIFC Innovation Licenses.

“It presents a unique opportunity to explore emerging FinTech trends and their potential to drive financial progress in the MEASA region,”

Mohammad Alblooshi, CEO of DIFC Innovation Hub.

The DIFC is more than just a location; it functions as an ecosystem that cultivates collaboration and innovation. In 2024, companies within the DIFC community benefit from a collaborative environment, fostering the convergence of ideas, flourishing partnerships, and abundant synergies. This ecosystem-driven approach positions DIFC at the forefront of global financial innovation.

In the transformative landscape of 2024, DIFC stands as a testament to the symbiotic relationship between innovation and financial excellence. The integration of AI, Big Data, and Cloud within the DIFC ecosystem propels companies into the future, enabling them not only to adapt to change but to thrive in it. Situated in the heart of Dubai, DIFC remains the epicenter of financial evolution, where cutting-edge technology and a progressive mindset converge to shape the future of finance.

The DIFC Innovation License: Empowering Tech Pioneers

The DIFC Innovation License, a Commercial License with a subsidized fee structure, serves as a launchpad for technology and innovation firms at any stage of their growth. This sector-agnostic DIFC Innovation License is designed to support firms interested in developing or testing new, novel, or innovative products. These initiatives showcase DIFC’s commitment to nurturing and supporting tech pioneers in their journey towards innovation and success.

What are the key features of the DIFC Innovation License?

1) A subsidized fee structure for 2 to 5 years at USD 1,500 per annum

2) Access to world-class co-working spaces at low costs, and

3) Heavily discounted visa options for team members.

What makes the DIFC Innovation Hub stand out?

  • Attractive licensing and regulations for FinTech companies.
  • Affordable real estate options.
  • Accelerator programs provided by the Fintech Hive.
  • Access to funding from a diverse range of investors.
  • Digital Labs for corporate partnerships and collaborations.
  • A vibrant community of like-minded innovators.

Why Choose MS for your DIFC Innovation License?

Engaging with a reputable corporate service provider like MS within the DIFC can streamline the process of acquiring an innovation license. MS, with its expertise in corporate services, can navigate the regulatory landscape, ensuring compliance with DIFC’s requirements for innovation-driven ventures. Leveraging their knowledge of local regulations and established relationships within the DIFC can accelerate the licensing process, allowing businesses to focus on their innovative pursuits. Collaborating with MS as a corporate service provider in the DIFC offers a tailored approach, combining their proficiency in regulatory matters with the specific needs of businesses aiming to foster innovation within this globally recognized financial hub.

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Dubai: A Rising Hub for Hedge Funds

Dubai: A Rising Hub for Hedge Funds
DIFC positioned as the central hub for Hedge Funds in the region

DIFC positioned as the central hub for Hedge
Funds in the region

Hedge funds are showing increasing interest in Dubai as a gateway to the region, looking to establish a presence in DIFC – a rising global hub for alternative investments and hedge funds. DIFC also boasts a unique offering of ecosystem benefits, particularly for hedge funds, in addition to additional regulatory, infrastructure, and environmental advantages at the emirate level. DIFC has more than 60 hedge funds already registered or in the pipeline and 55% of DIFC-based hedge funds originate from US & UK. The migration of hedge funds to DIFC from other global and regional centres reinforces Dubai’s reputation as the region’s leading financial centre and business capital. It also reflects the emirate’s ability to attract top talent and provide access to large concentrations of public and private capital.

The Dubai Financial Services Authority (DFSA), which is globally recognized for its transparency and governance, has always been an accessible and collaborative regulator. While overseeing the DIFC jurisdiction for almost 20 years now, the DFSA frequently consults with the industry, unlike markets where funds have continued to become frustrated by slow and rigid approaches

“DIFC is delighted to welcome our new hedge fund clients to the Centre thereby continuing our remarkable growth as a rising global hub for hedge funds and certainly the region’s largest hedge fund market. Our new clients will manage and grow their business by attracting top global talent and by tapping into deep pools of public and private capital accessible in, and from Dubai.”

Salmaan Jaffery, Chief Business Development Officer, DIFC Authority,

Alongside an environment of ambitious innovation, the DIFC ecosystem also provides the perfect set of partners for funds and their portfolio managers looking to establish in Dubai. Hedge funds can hit the ground running with unparalleled access to high-caliber professional advisors, including law firms, consultancies, and tax specialists within the Centre

DIFC’s world-class ecosystem and infrastructure to support hedge fund capabilities

DIFC is the largest financial services ecosystem in the region and has become a preferred destination for financial institutions from all sectors. It is widely regarded as being on par with the world’s leading financial centres.
Financial institutions, hedge funds included, recognize DIFC’s governmental support, ease of doing business, market-leading operating environment, innovation offering, depth of ecosystem, and forward-thinking legal and regulatory framework. The quality and range of DIFC’s independent regulation, common law framework, supportive infrastructure, and tax-friendly regime make it an ideal base to satisfy the region’s rapidly growing demand for financial and business services.

A regulatory framework that fosters facilitation and aligns seamlessly with international standards.

DIFC’s regulatory model centres on an independent risk-based regulator, the Dubai Financial Services Authority (DFSA), closely modeled on legislation employed in London and New York. In addition to granting licenses, the DFSA regulates all financial institutions, including hedge funds, in DIFC and oversees a legislative system that is consistent with English Common law – the global standard for financial services. The regulator also consults on prospective regulations with industry stakeholders. DIFC has its own set of civil and commercial laws and regulations, in addition to an independent judicial system represented by DIFC Courts, which have exclusive jurisdiction over all civil and commercial disputes arising within DIFC and relating to DIFC-registered entities. The Centre has also made several enhancements for hedge fund clients looking to domicile both their manager and funds at DIFC. It waives DIFC registration costs, reduces regulatory capital, and lowers regulatory fees by as much as 60–80 percent. Hedge funds based in DIFC can be set up as Qualified Investor Funds, Public Funds, or Exempt Funds. The latter are subject to lower regulation in DIFC as they are open to accredited or professional clients only. These funds are also subject to lower base capital requirements – USD 70,000 as opposed to USD 500,000 for public funds – and a fast-track application process which the DFSA aims to complete within five days.

Hedge Funds in DIFC

The Fund Manager of a Hedge Fund is responsible for ensuring that risks associated with the Fund are adequately managed by:

Ensuring that there is adequate segregation of duties between the investment function and the Fund valuation process;

Observing best practice standards and guidance issued by the DFSA, in particular, the DFSA Hedge Fund Code of Practice; and

Observing the requirements that relate to the appointment of prime brokers with authority to combine the assets of the Fund with any other assets, which can only be done in respect of Exempt Funds, and not Public Funds.

DFSA Hedge fund can be a Public Fund or a Professional Fund

Public Funds

Public Funds are open to Retail Clients (as defined by the DIFC), and hence subject to higher levels of regulation. The other features of a Public Fund in the DIFC are:

  1. No minimum subscription limit.
  2. Units are offered to the general public.
  3. Can have any number of unit-holders.
  4. Have to comply with IOSCO principles.

Exempt Funds

Exempt Funds are open only to Professional Clients (as defined by the DIFC). The other features of an EF are:

  1. Minimum subscription of US$ 50,000.
  2. Units are offered to persons only by way of a Private Placement.

Qualified Investor Funds

Qualified Investor Funds are open only to Professional Clients (as defined by the DIFC). The other features of a QIF are:

  1. Minimum subscription of US$ 500,000.
  2. Units are offered to persons only by way of a Private Placement.


How MS can help you in DIFC?

We offer end-to-end support for Hedge Fund license applications, guiding you through the entire process. From initial consultations to authorization assistance and the preparation of legal documentation, MS Facilitators ensure your application aligns seamlessly with the DFSA Rulebook, guaranteeing comprehensiveness and compliance.

Our comprehensive services encompass:

  • Evaluation of your business model and advisory services on the relevant regulatory framework.
  • Crafting the Regulatory Business Plan and developing thorough financial projections.
  • Drafting all necessary policies, processes, and manuals.
  • Providing Outsourced Compliance Officer, Outsourced Risk Officer, and Outsourced Finance Officer services.
  • Finalizing the legal structure, including the establishment of a holding company and customization of Memorandums.
  • Completing leased space arrangements, facilitating bank account opening, and securing Financial Services Permissions.

Contact us today for more information on navigating hedge funds in the DIFC.

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