Dubai International Financial Centre (DIFC) was established in 2004 and is well known in the world for its transparency and efficiency. It is one of the fastest-growing international financial centers that attracts large firms. Like other free zones of Dubai, DIFC also provides tons of benefits for setting up a business.
Choosing DIFC for company formation is a strategic move as it provides a suitable business environment that enhances stability, growth, and success. There are many other compelling reasons that make it a popular choice for investors.
Let’s dig deep to know the secret sauce behind its popularity and know the process of business setup and license cost.
Business Categories In DIFC
In DIFC, there are two main business categories: financial business and non-financial business. Both these categories have different types of business activities, rules, and regulations to follow.
· Financial Business
This category includes those business activities that provide financial services such as banking, insurance, brokerage firms, and many others. To start financial business activities, you should hire a shareholder, two directors, and a commercial license.
· Non-Financial Business
It includes activities that are not related to financial products. These include legal services, retail stores, IT offices, and others. Choosing non-financial business activities does not require a minimum amount of money.
Step By Step Guide to Obtain A DIFC License
The process of obtaining a DIFC license is simple and involves several steps that should be followed for smooth processing.
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Decide Business Activities
As mentioned above, the business categories in DIFC can be only financial or non-financial. Decide which business activity is more suitable and advantageous for you. Consider all the pros and cons of the selected activity before setting up a business.
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Submit An Application
After choosing a business activity, the next step is to apply to the relevant authority. You can apply through the online portal or the official DIFC website. In the application, provide the required details and attach the proof or documents.
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Pre-Approval
If the provided information is correct and the application form is complete, DIFC will provide an initial approval. This approval is for a limited time and ensures that the chosen business activity and other details are good to go.
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Submit Required Documents
The required documents should be uploaded according to the instructions on the application form. Ensure that you have not missed any of the documents mentioned; otherwise, the application will be rejected.
- Visa copies of shareholders
- Passport of owner with minimum six months validity
- Contact number and email address
- Business activities
- Trade name confirmation
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Office Space
According to the rules and regulations of DIFC, it is mandatory to have office space to get a license. The size and type of office space can vary according to the needs of your business and requirements. However, the location of office space should be in DIFC free zone.
In the DIFC-free zone, you are allowed to choose any office space including, a flexi desk, residential building, serviced office, and shared office.
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Pay Required Fee
The next step is to pay the required fee to the relevant departments to get a license and work legally in a free zone.
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Get Final Approval
It is crucial to meet the standards and requirements set by the DIFC for final approval. Without this, it is impossible to operate in DIFC. For final approval, DIFC goes through applications and documents and reviews them according to their rules.
If everything is up to the mark, you can get final approval to start your business activities. The time required for final approval depends on the complexity of business activities and submitted documents. Generally, it takes 2 to 4 weeks and sometimes it gets delayed due to missing documents or if any proof is required.
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Open Bank Account
Banks play a major role in funds management and money transactions. After the DIFC business setup, you are allowed to open a bank account in the DIFC free zone.
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Start Operating
Now, you can operate legally in the business market of DIFC. Sign the contract, hire employees get their visas, and grow your business.
Post Registration Procedure
The process of setting up a business doesn’t end at registration, as there are some mandatory follow-up tasks to ensure the smooth running of your business.
- Register for VAT
For VAT, you need to fill out the form and submit the financial report of the company. It is important to understand your business type as few business activities do not need registration for VAT.
- Hire an Auditor
Registration for VAT is a complex process and it is advised to hire an auditor to help you with financial statements.
- Get Professional help
Professionals are experts and have experience in the field of business setup and company registration. It is a wise move to get professionals so you do not have to face unwanted circumstances.
Benefits Provided to Investors in DIFC Free Zone
There are a number of benefits of business setup in DIFC that make it an ideal choice.
- Complete Ownership
You can own your business completely, as DIFC Freezone eliminates the need for a partnership with a local sponsor. This benefit is highly advantageous and makes the process easier by giving you complete control over all business activities.
- Business Opportunity
Choosing the right type of business is a crucial step and contributes significantly to the success rate. DIFC free zone allows you to explore a wide range of business models. It will help you in choosing the most suitable path for yourself by thinking outside the box.
- Tax Advantage
The relaxation of paying no tax is one of the major benefits of investing in this zone. No need to pay any type of tax, including value-added tax and withholding tax. This favorable environment helps in more profitability and stability of the business.
- Open Bank Account
You are eligible to open an account in any bank in Dubai. It will help achieve financial goals and manage funds.
DIFC License Cost
The business setup process in DIFC depends on the activities you decide to operate. General cost includes
- The application fee is around AED 2900
- The commercial license fee is almost AED 44000 per year
- Office rent is 7300 AED for a small sized space
Conclusion
At the end of this article, we hope it has given you a clear understanding of the business setup in Dubai International Financial Center. It is an ideal platform in Dubai as it offers unlimited benefits to investors including financial services, flexibility in taxation, and advanced technology making it a top choice for company formation and attracting more entrepreneurs and investors.
If you are still confused about starting your own company in DIFC, don’t worry. Reach out to Al Riyady to get a smooth and hassle-free business setup. You can access our other services as well, like the UAE Golden Visa.
