Quick overview of the DIFC Innovation license

The Middle East has witnessed a surge in technological advancements and a flourishing tech ecosystem in recent years. Among the driving forces behind this growth is the Dubai International Financial Centre (DIFC), which has positioned itself as a hub for innovation and technology. At the heart of DIFC’s strategy lies the Innovation License, a catalyst for fostering cutting-edge technology firms across various sectors.

With endless opportunities for growth, the DIFC Innovation Hub provides you cost effective licences, cutting-edge co-working spaces, discounted visas and access to the AED 1 billion Dubai Future District Fund.

The DIFC Innovation License: A Launchpad for Tech Pioneers

1. Overview of the Innovation License:

The DIFC Innovation License is a Commercial License with a subsidized fee structure designed to support technology and innovation firms at any stage of their growth. It serves as a launchpad for firms interested in developing or testing new, novel, or innovative products. The license is sector-agnostic, catering to a diverse range of tech startups.

2. Fee Structure and Benefits:

• The license is subsidized for 2 to 5 years at a rate of USD 1,500 per annum.
• Access to world-class co-working spaces at low costs.
• Heavily discounted visa options for team members.

3. Focus on Cutting-Edge Technologies:

The DIFC emphasizes firms leveraging advanced technologies such as Artificial Intelligence, machine learning, blockchain, Web3, and more. The objective is to create a thriving ecosystem of tech innovators.

DIFC’s Evolution: From Fintech to All-Tech

1. Expansion of Startup Benefits:

Originally targeting Fintech players through the DIFC Fintech Hive, the benefits of startup licenses were extended to include a broader spectrum of tech startups—EdTech, RegTech, and all technology-based enterprises.

2. Current Landscape:

• Over 700 innovation licenses are currently operating from the DIFC.
• The focus remains on fostering innovation in products and services.

The Innovation Testing License (ITL): A Regulatory Sandbox

1. Regulatory Support for Testing:

The ITL, offered by the Dubai Financial Services Authority (DFSA), provides a controlled environment for startups to test innovative products and services.

It does not eliminate regulation but serves as a gateway for startups to test their products with live clients.

2. Technology Focus:

Startups deploying technologies falling under regulatory purview, such as money services and robo-advisories, opt for the ITL.

The DIFC Innovation Hub: A Comprehensive Ecosystem

Components of the Innovation Hub:

• 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.

Qualifying Requirements for DIFC Innovation License:

1. Exclusions:

• The entity cannot conduct financial services or engage in crypto-related activities, excluding the creation (but not the sale) of NFTs.
• No trading or selling of products is allowed.

2. Requirements for Eligibility:

• The entity must provide a type of technology, such as software solutions, AI, technology R&D, blockchain, etc.
• Physical presence within DIFC, with a flexible desk at co-working spaces.

The DIFC Innovation License stands as a testament to Dubai’s commitment to fostering technological innovation. With a focus on providing comprehensive support, including subsidized fees, co-working spaces, and access to a vibrant community, DIFC continues to play a pivotal role in shaping the future of technology in the Middle East. As the tech ecosystem evolves, the Innovation License remains a key driver for startups seeking to make their mark in the region.

Why Choose MS at DIFC for Your Innovation License?     

Engaging with a reputable 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 expedite the licensing process, allowing businesses to focus on their innovative pursuits. Collaborating with MS as a professional 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.

Contact us: [email protected]

Call us at +971 50 998 7454

Guide to the CAT 3C DIFC License 

The IFC stands among the globe’s top ten onshore financial centres, providing a secure and efficient platform for businesses and financial institutions to engage with the emerging markets of the region. With the high quality and independence of the DIFC’s regulator, a robust common law framework, outstanding infrastructure, and tax advantages, it serves as an ideal hub to capitalize on the escalating demand for financial and business services in the MENASA region.

Wealth & Asset Management

The DIFC stands out as the favored destination for Wealth and Asset Management firms in the MEASA Region.

These firms enjoy the advantages of The Centre’s sophisticated international ecosystem, including:

1. A world-class legal and regulatory framework.
2. A collaborative approach fostering partnerships between clients, regulators, and authorities.
3. A substantial industry size exceeding USD 450 billion in Wealth and Asset Management within the DIFC.
4. A noteworthy USD 165 billion in Assets Under Management (AUM) is managed within the DIFC.
5. A current count of over 330+ companies engaged in Wealth and Asset Management operations.

Wealth Management

The Centre is a prime hub for regional wealth management in the rapidly growing MEASA region, known for accelerated wealth accumulation. Key areas of interest include investment and portfolio management, estate planning, Sharia-compliant wealth management, and real estate and financial advisory. DIFC provides diverse market entry options and regulated licenses. A representative office supports marketing, information provision, and referrals, while a category four license enables asset raising and client relationship management. Additionally, a category three license allows comprehensive portfolio management, making DIFC a strategic base for navigating the dynamic MEASA landscape.

Asset Management

The Centre is an ideal hub for diverse wealth and asset management companies, supporting the development and management of public, private, Sharia-compliant, and qualified funds. DIFC offers regulated licenses, including representative offices for marketing services, information provision, and promotions. A category four license allows asset raising and full client relationship management, while a category three license permits comprehensive portfolio management, making DIFC a strategic choice for varied financial enterprises.

Fund Management
The MEASA region’s expanding wealth demands specialized fund management services. Institutions and high-net-worth individuals seek regional experts for intricate investment needs. DIFC’s legislative framework ensures a secure environment, attracting local, regional, and global players to domicile, manage, and distribute funds. DIFC stands out as the largest fund management jurisdiction in the region, setting the pace with its supportive regulatory regime.

Private Equity

Companies in the MEASA region seek private capital, including international sources, to fuel their growth. Private equity is increasingly attractive to family firms and conglomerates, providing capital and management expertise as they grow in size and complexity. Fragmented industries are ripe for consolidation through private equity. Governments explore private-public partnerships, offering additional opportunities. The growing appetite from institutions and high-net-worth individuals for MEASA-focused private equity creates an investor base for regional funds. DIFC, centrally located for regional deal-making, provides an ideal platform with tailored fund structures and licensing options, establishing a unique regional hub for launching, distributing, managing, and domiciling various private equity funds.   

Hedge Funds

Positioned as a crossroads between the East and West, Dubai serves as a pivotal hub for global trade and investment. The strategic location of DIFC provides hedge funds with an optimal gateway to tap into the high-growth emerging markets of the Middle East, Asia, and Africa. A significant majority of hedge funds established in DIFC, approximately two-thirds, hail from the United States and the United Kingdom, boasting the inclusion of two among the world’s ten largest hedge funds.

Venture Capital Firms
DIFC offers an optimal setting for venture capitalists to establish a foothold in Dubai and invest in innovative technologies and enterprises. Dubai boasts a significant share, one-third, of all MENA investors. Various funding sources, including growth-stage funding, angel investors, and the Dubai Future District Fund, contribute to the vibrant ecosystem. Launched in 2020, the AED 1 billion fund targets attracting leading global and regional capital to expedite the growth of the digital economy.

Establishing a financial entity in DIFC is straightforward, involving a streamlined process of five sequential steps:

1. Submit your interest.
2. Apply for DFSA Authorisation:
   
   
3. Furnish the DFSA with a regulatory business plan.
4. Lodge your application with the DFSA.
5. The DFSA will conduct a thorough final review and provide a recommendation. Upon approval, the DFSA will issue an “in-principle” letter, typically valid for three months.

• Registered Address: Select and officially register the location within DIFC where your entity will operate.
• Register with DIFC: Fulfill the prerequisites for registering the entity in DIFC to acquire both the Certificate and the License.
• Authorization by DFSA: Upon satisfying all DFSA prerequisites, you will be granted DFSA Authorization.

Costs for setting up in DIFC – Dubai International financial centre

The DFSA oversees the assessment and approval of financial services applications, with costs varying based on the specific activities sought, placing the applicant into one of five categories.

DFSA fees typically consist of two elements: 1) an application processing fee and 2) an annual licensing fee.

1) Application fee – starting from $ 5,000.

2) Annual Licensing – starting from $ 5,000.

Registrar of Companies (DIFC ROC)

The DIFC ROC facilitates the establishment of the legal framework for DIFC Regulated Firms. Shareholders may be individuals or corporations, and various options exist, including ‘Private Company Limited by Shares’ and ‘Limited Liability Partnerships.’ Specifically, for the Private Company Limited by Shares structure, the associated setup costs encompass:

Incorporation Application for a Private Company Limited by Shares: $ 8,000
Commercial License Fees: $ 12,000

Data Protection

The data protection notification is an integral component of the new entity registration process in the DIFC, with associated costs outlined below:

Registration: US$ 1,250

Annual renewal: US$ 500

WHAT APPOINTMENTS ARE MANDATORY FOR A CATEGORY 3C-AUTHORIZED FIRM IN DIFC?

Directors (minimum 2, preferably 3-4) – eligible for outsourcing (NEDs).

Senior Executive Officer (SEO) – In-house, must be a UAE resident (can also serve as a director).

Risk Officer (RO) – eligible for outsourcing.

Finance Officer (FO) – eligible for outsourcing (can also be an Executive Director/Senior Manager).

Money Laundering Reporting Officer (MLRO) – eligible for outsourcing, must be a UAE resident (can also be a Compliance Officer).

Compliance Officer (CO) – eligible for outsourcing, must be a UAE resident (can also be an MLRO)

Our Services – WHY MS?

We offer end-to-end solutions for obtaining a Category 3C DIFC License. Whether you need fintech consulting, support during the authorization process, or help preparing legal documentation, MS guides you through the intricacies of the DFSA Rulebook, ensuring your application is thorough, complete, and compliant.

Our range of services includes:

• Evaluating the business model and providing advice on the relevant regulatory framework.

• Crafting the Regulatory Business Plan and creating detailed financial projections.

• Developing all necessary policies, processes, and manuals.

• Offering Outsourced Compliance Officer and Outsourced Finance Officer services.

• Finalizing the legal structure, including setting up a holding company and customizing Memorandums; and

• Completing the leased space arrangements, assisting with bank account opening, and securing Financial Services Permissions.

Elevating Dubai as a Global Hub for Sustainable Financial Innovation

On the new era of sustainability and resilience, under the COP 28 critical moment for global transformative climate action, DIFC understands and upholds the need of Sustainability is the new future. In a groundbreaking move, the Dubai International Financial Centre (DIFC) has launched the Sustainable Finance Catalyst to mark COP28’s Finance Day, setting ambitious targets to propel sustainable finance flows from Dubai to over USD 100 billion by 2030. Unveiled on Finance Day during COP28 in 2023, this initiative not only solidifies DIFC’s status as the first global sustainable finance hub in the Middle East, Africa, and South Asia (MEASA) region but also marks a significant legacy to the COP28 conference.

Arif Amiri, Chief Executive Officer, DIFC Authority, said: “During DIFC’s Path to COP28 programme we have worked with the global industry to ensure we continue to make a tangible difference through cross-border collaboration and by setting a strong example of global best practice. The Sustainable Finance Catalyst is designed to help scale our efforts enabled by the first AI-driven sustainability knowledge hub, and a network of strategic partners that will train 1 million sustainability leaders and ultimately grow the Centre’s sustainability-driven start-up ecosystem 50 times its current size by 2030.”

At the core of the Sustainable Finance Catalyst is a commitment to harnessing the power of artificial intelligence (AI) through the world’s first AI-driven sustainability knowledge hub. This technological marvel is set to redefine sustainable finance by providing a centralized intelligence unit dedicated to accelerating Dubai’s presence in the global market. The initiative aims to offer rapid and cost-effective access for companies seeking sustainability knowledge, data, and financing solutions.

The Sustainable Finance Catalyst sets forth several key objectives to be achieved by 2030:

1. USD 100 Billion Sustainable Finance Flows: The catalyst aspires to elevate sustainable finance flows from Dubai to an impressive USD 100 billion, signaling Dubai’s unwavering commitment to becoming a frontrunner in the global sustainable finance arena.
2. Centralized AI-Driven Sustainability Knowledge Hub: Housed at the state-of-the-art DIFC Innovation One, the catalyst aims to establish itself as Dubai’s premier central intelligence unit on sustainable finance. Its focus on investing in awareness, capability, and innovation positions the city as a global leader in sustainable financial intelligence.
3. 1 million Trained Sustainability Leaders: The initiative seeks to activate a network of strategic partners to train 1 million sustainability leaders. This investment in human capital underscores the importance of cultivating a skilled workforce to propel sustainable finance practices.
4. 50x Growth in Sustainability-Driven Start-ups: The Sustainable Finance Catalyst envisions fostering a dynamic ecosystem by catalyzing a 50-fold growth in its sustainability-driven start-up network by 2030. This audacious target underscores the commitment to nurturing innovation and entrepreneurship within the sustainable finance sector.

Dubai is leading the global push for sustainable finance through initiatives like the Sustainable Finance Catalyst. The Dubai International Financial Centre (DIFC) is using advanced technologies, forming key partnerships, and prioritizing education and innovation to make the city’s financial sector more eco-friendly. This effort benefits Dubai and serves as a model for other financial hubs worldwide. The impact of this initiative is expected to reach beyond local borders, influencing sustainable finance on a global level.

How MS can help you in DIFC?

In the heart of the Dubai International Financial Centre (DIFC), MS is your dedicated Corporate Service Provider, tailored to optimize your business journey. Our expert advisory team navigates the nuances of DIFC, providing strategic insights for informed decisions. With us, company formation becomes swift and compliant, establishing a solid foundation for your venture.

Experience seamless financial management through our Finance Officer Services, complemented by security assurance and regulatory compliance with our MLRO role. Our proficiency extends to precise Accounting and Tax Services, ensuring meticulous records and regulatory adherence.

Beyond mere service provision, MS becomes your strategic partner, enhancing and elevating your corporate experience within the vibrant DIFC landscape. Let’s embark on this journey together, shaping success and growth for your business in DIFC.

Dubai International Financial Centre (DIFC) stands as a beacon of innovation and progress on the global financial stage, is a powerhouse in THE Middle East. At the heart of this financial hub is a commitment fostering innovation and supporting business.  One of the standout features of DIFC’s financial ecosystem is its Venture Capital (VC) fund framework. DIFC’s proactive efforts to expand the presence of venture capital funds and investors in Dubai have given rise to well-crafted framework that enhances global opportunities for many worldwide to establish their venture capital funds in DIFC ecosystem.

The Dubai Financial Service Authority (DFSA), the regulatory authority in the DIFC, has recently, made changes to its regulatory framework with the aim of encouraging and simplifying venture capital funding for-early-stage technology driven start-ups and small business that is expected for a high growth.

DIFC stands as an onshore financial centre renowned for providing a secure and streamlined environment catering to organisations, businesses, and financial institutions aiming to access critical markets spanning Africa, the Middle East, and Asia.

Why establish a VC fund in DIFC

DIFC’s strategic initiative to expand the presence of venture capital funds and investors in Dubai has spurred the development of a framework that enhances opportunities for global audience to establish their venture capital funds within DIFC. Positioned as the easiest and quickest route to establish a VC fund in the UAE, this financial centre offers an array of distinctive benefits aimed at attracting and enticing potential investors.

Application to establish a Fund

The application process for establishing a fund in the DIFC involves distinct procedures depending on the type of fund and the associated regulatory requirements. The DFSA initiates the review of a fund application once the Fund Manager has been granted authorization (for domestic Fund Managers) or approval (for External Fund Managers).  

Specifically, the application process varies based on the fund type. For instance, creating a Public Fund necessitates regulatory approval, while the application of a Venture Capital Fund is typically submitted through a notification process. The latter approach emphasizes self-certification to meet the relevant DFSA requirements, particularly in the case of specialist Domestic Funds.

DIFC’s venture capital fund framework is a cornerstone of Dubai’s economic growth and innovation vision. Venture Capital is a driving force behind the success and growth of business in DIFC. As the region continues to evolve as a global financial hub, venture capital plays a vital role in fuelling innovation, entrepreneurship, and economic development. With a supportive ecosystem and a commitment to fostering innovation, DIFC is well-positioned to be a thriving hub for venture capital and a potential powerhouse of funds.

How We Can Help

MS specializes in providing extensive support across various aspects of your business journey. Through in-depth analyses of your business model, we offer essential guidance within regulatory frameworks and fine-tune models for optimal alignment. Our expert Outsourced Compliance Officer and Outsourced Financial Officer services ensure you navigate regulatory and financial landscapes with confidence. We take care of the legal intricacies, and concluding business structures, including the establishment of holding companies. Throughout the year, we stand as your reliable partner, offering continuous support for compliance, encompassing vital accounting and tax services. Addressing practicalities, we actively guide you through processes like opening bank accounts and securing financial services provisions, enhancing operational efficiency. In essence, our comprehensive suite of services is designed to elevate the overall success, compliance, and efficiency of your business.

Unlock Success in the Financial Hub

Dubai International Financial Centre (DIFC), nestled amidst the towering skyscrapers of Dubai, stands as a testament to the UAE’s meteoric rise as a global financial powerhouse. Established in 2004, DIFC was envisioned as a financial oasis, attracting international banks, financial institutions, and multinational corporations. Today, DIFC plays a pivotal role in global finance, fostering economic growth and innovation in the heart of the Middle East.

• A Strategic Portal of the East and West

DIFC serves as a strategic gateway connecting East and West, serving as a bridge between global financial centres. This geographical advantage has made it a preferred hub for international companies seeking to access markets across the Middle East and North Africa (MENA) region.

• The Regulatory Symphony

One of DIFC’s cornerstones is its robust regulatory framework. The Dubai Financial Service Authority (DFSA) oversees the centre, ensuring adherence to international regulatory standards. DIFC’s financial regulations and independent judicial system provide a stable environment for businesses and investors.

• Attracting Financial Titans

DIFC has successfully lured some of the world’s biggest financial institutions, including Citibank, HSBC, and Goldman Sachs, to set up operations within its boundaries. These global giants leverage DIFC’s infrastructure to access the vast wealth and opportunities in the region.

• Fostering Innovation: Fintech and Beyond

In recent years, DIFC has actively embraced financial technology (fintech) and innovation. The DIFC FinTech Hive, a leading accelerator program, has been instrumental in nurturing start-ups and attracting cutting-edge fintech companies. This focus on innovation has strengthened DIFC s position as a trailblazer in the financial industry.

• The Ethereal World of Islamic Finance

DIFC has become a renowned hub for Islamic finance, catering to the growing global demand for Sharia-compliant financial services. Its legal framework and specialized institutions have attracted banks and businesses specializing in the financial industry.

• A Soiree for Wealth Management

The centre has emerged as a global wealth management hub, offering services to high-net-worth individuals and families. Its well-regulated financial environment has made it an attractive destination for private banking and asset management.

• Supporting Sustainable Finance

DIFC is actively promoting sustainable finance in the region. The Dubai Sustainable Working Group, based in DIFC, pioneering green and sustainable finance initiatives, aligning with global efforts to combat climate change.

DIFC’s role in global finance is undeniable. Its strategic location, regulatory excellence, and commitment to innovation have made it a beacon of financial stability in the Middle East. As it continues to evolve and adapt to global economic shifts, the DIFC remains a key player in shaping the future of the financial world and continues attracting businesses, investors, and innovators from around the globe.

Unlock Success in DIFC with MS Group

For entrepreneurs looking to establish a strong foothold in the dynamic landscape of the Dubai International Financial Centre (DIFC), MS Group is dedicated to providing tailored solutions and expert guidance to help you achieve your goal. With our deep expertise and unwavering commitment, we ensure a smooth and efficient journey from business setup to sustainable growth within the vibrant heart of the Middle East’s financial hub. Let’s begin the journey together. Your success is our priority.