DFSA Authorisation Process
The Dubai International Financial Centre (DIFC) is one of the leading financial hubs in the Middle East, offering a robust legal framework based on English common law, tax efficiency, and access to a growing regional market. Whether you are launching an asset management firm, financial advisory business, fund manager, or fintech solution, DIFC provides a structured path to establish and scale regulated entities under the oversight of the Dubai Financial Services Authority (DFSA).
- Understand Your License Category
DIFC, through its regulator the Dubai Financial Services Authority (DFSA), offers a range of license categories tailored to the specific financial services your firm intends to provide. These may include activities such as asset management, investment advisory, dealing in investments, custody, trust services, money services, and more.
Each license category comes with its own regulatory obligations, capital requirements, permitted activities, and supervisory expectations. Whether you are setting up a new venture, a branch of a foreign entity, or a specialist financial platform, selecting the appropriate license type is a critical first step in the application process.
VelthRad can guide you through identifying the right category for your business model and ensuring alignment with DFSA requirements.
- Submit a Letter of Intent (LOI)
The process begins by submitting a Letter of Intent (Enquiry Form) to the DFSA.
This outlines:
- The type of financial services proposed
- The chosen license category
- Corporate structure and founding team
- Shareholder, UBO details
- DIFC presence (branch, subsidiary, or start-up)
- Intended office space and local staffing
Once the Letter of Intent (LOI) is submitted, the DFSA arranges an introductory meeting with the applicant to discuss the proposed business model and licensing pathway. Following this meeting, the DFSA grants access to its online portal, enabling the applicant to submit the initial documentation, including the Regulatory Business Plan (RBP), financial projections, and Core and supplementary forms.
Upon submission, the DFSA typically conducts a preliminary review within 14 working days. If the submission is deemed complete and acceptable, a dedicated Relationship Manager (RM) is assigned to oversee the application process.
- Prepare a Regulatory Business Plan (RBP)
The DFSA requires a detailed Regulatory Business Plan that explains:
- Your business model and product/services offering
- Target client segments and jurisdictions
- Risk management and compliance frameworks
- Technology and outsourcing arrangements
- Governance, finance, and internal controls
- Key Personnel details
- Board composition
This document forms the core of your license application and should align with DFSA’s rulebooks (GEN, CIR, COB, PIB, etc.).
- Appoint Key Individuals
The following Controlled Functions must be identified and approved:
- Senior Executive Officer (SEO) - must be UAE-resident
- Compliance Officer (CO) - must be UAE-resident (can be outsourced)
- MLRO - must be UAE-resident (can be the same person as CO)
- Finance & Risk Officer - can be outsourced or placed in a group entity
Each must submit an Approved Person Status (APS) form.
- Capital Requirement
Capital requirements in DIFC are determined by the nature of the licensed activities and the type of clients being served. Each regulated activity has a defined base capital requirement, which serves as the minimum threshold for licensing.
In addition to the base capital, firms are expected to meet:
- Expenditure-Based Capital Minimum (EBCM): This links capital adequacy to the firm’s operating costs and ensures it can sustain its business during periods of stress.
- Variable Capital Requirement (VCR): Applied in certain cases, particularly for money service providers, based on transaction volume and risk exposure.
- Risk-Based Capital Requirements: These may apply where activities expose the firm to credit, market, or operational risks.
The overall capital requirement is typically the highest of these applicable components. The DFSA uses this layered approach to ensure that financial services firms operating within DIFC remain stable, well-capitalized, and resilient to risk.
- Incorporation and Licensing
Once the DFSA has issued In-Principle Approval, you will be required to:
- Incorporate the legal entity with the Registrar of Companies (RoC)
- Finalize office leasing within the DIFC jurisdiction
- Fund the capital account and allocate shares
- Complete any remaining compliance or personnel requirements
Upon satisfaction of these conditions, the DFSA license and DIFC commercial license will be granted, allowing the firm to commence operations.
Important Note:
The issuance of an In-Principle Approval and subsequent incorporation of the DIFC entity does not authorize the commencement of business operations. The entity must not engage in any regulated activity until all conditions outlined in the In-Principle Approval are fully satisfied and the final DFSA approval has been granted. Commencing regulated activities prior to this may result in regulatory breach.
- Office Space in DIFC
Regulated entities must lease physical office space within the DIFC, either as a standalone office, business center, or co-working space. Your RM can connect you with approved real estate providers for tailored options based on your team size and licensing category.
- Additional Setup Considerations
- Bank Account: Required for capital injection and day-to-day operations; early engagement with DIFC-friendly banks is recommended.
- Visa & Establishment Card: Issued after license activation to onboard staff.
- Professional Indemnity Insurance (PII): Required depending on activities.
- IT & Cybersecurity Readiness: Increasingly reviewed during application assessments.
- How VelthRad Can Help
VelthRad provides comprehensive advisory and project management solutions to support your DIFC setup. Our expertise ensures a seamless and well-structured approach across all stages of the licensing and operational process, including:
- End-to-end support for license applications and regulatory approvals
- License selection, regulatory scoping, and feasibility analysis
- Guidance on business plans and preparation of supporting documentation
- Direct coordination and liaison with the DFSA during the approval process
- Talent sourcing and onboarding for key regulatory and management roles
- Ongoing compliance advisory and IT infrastructure support
- Provision of outsourced roles such as Compliance, MLRO, Risk, Finance Officer and COO Support (assistance in preparing operational forms, procedures, policies etc)
- Appointment of experienced Independent Directors
- Internal audit and governance review services
Disclaimer:
The information provided above is for general understanding and informational purposes only. Regulatory requirements, processes, and costs are subject to change based on the nature of the business, the type of license sought, and updates from the DIFC authorities. We recommend reaching out to VelthRad Consultants for a tailored discussion and end-to-end guidance aligned with your specific business model and regulatory needs.
