Financial Services in Dubai has seen tremendous growth in Dubai over the last decade. Dubai became the financial center in the Middle East. Dubai International Financial Center (DIFC) is key to this success. DIFC helps foreign investors to setup financial services company in Dubai free zones, also letting them have full ownership of their business.

Starting a Financial Services firm in Dubai

To setup Financial Services company in Dubai it is important to follow:

• Firstly the laws related to financial business in Dubai and UAE
• Secondly the rules to be followed in DIFC
• And lastly, the applicable licenses and rules under the following financial regulators:
  • Central Bank of UAE
  • UAE Securities and Commodities Authority
  • UAE Insurance Authority

Before Opening a Financial Services Company

A few things to check before setting up a financial services company in Dubai:

• Firstly at least 51% of the company assets should be owned by UAE or GCC national.
• Secondly the capital required to start the business. In Financial Services, investment is high in the beginning.
• And thirdly, the company must have a financial analyst and internal audit system.

Dubai International Financial Centre (DIFC)

DIFC helps to set up financial companies in the Free Zone and carry out their financial business. Main features of DIFC are as follows:

• DIFC is a financial hub in the middle east region with more than 2500 registered companies.
• It provides efficient and secure platform for financial companies to operate.
• And lastly, DIFC is a Financial Free Zone which has its own rules. The DIFC has it own dedicated financial service regulator, Dubai Financial Service Authority (DFSA).

Dubai Financial Service Authority (DFSA)

The Dubai Financial Service Authority is an independent regulator for all financial services managed from DIFC. It looks after various financial sectors within DIFC namely:

• Firstly Banking Sector (Investment, Corporates, Private Banking)
• Secondly Securities Capital Market (Equities and Commodity Trading)
• Thirdly Asset Management
• Fourth Insurance
• Fifth Islamic Finance
• And Business Processing Operation

About DFSA

DFSA defines the standards for ethical conduct and integrity for financial operations within DIFC.

DFSA also makes sure that the financial companies are in compliance with the laws. This helps to achieve administrative fairness and accountability among the members in DIFC.

DFSA enforces financial rules in such a way that DIFC meets high international standards.

Objectives of DFSA

• Firstly to maintain transparency in DIFC.
• Secondly defining clear and flexible laws for companies registered in DIFC.
• Thirdly to maintain confidence and stability in the financial service industry in DIFC which helps to reduce systematic risk.
• Fourthly to prevent any conduct by the companies that can cause damage to the reputation of DIFC. Also apply corrective action.
• Fifth to protect the direct and indirect users.
• And to promote public understanding of the financial laws in DIFC.

Guiding Principles of DFSA

• To develop DIFC as an financial center.
• Help the regulating authorities in UAE.
• Control the adverse effect of the activities of DFSA.
• Maintain healthy competition.
• Use of resources in most efficient way.
• Making sure that the laws help the companies.

Role of DFSA

• Manage the Regulatory Law 2004.
• License the companies within the DIFC.
• Supervise the activities within the DIFC.
• Enforce the rules and laws to all companies within DIFC.
• It also manages the Market Law 2012.
• DFSA also manages following financial laws:
  • Islamic Financial Business Law 2004
  • Collective Investment Law 2010
  • Investment Trust Law 2006.
• Work closely with UAE Central Bank to prevent money laundering activities within DIFC.

COVID-19 Updates

The DFSA issued letter to all members due to COVID -19 pandemic. It advised DIFC participants for creating plans for business continuity and disaster recovery.

• The impact of invoking BCP on protecting customers and regulatory compliance
• When was the last time the BCP tested and weather the testing was sufficient to account for the current risk
• Unexpected disruption will impact the work from home procedures

DFSA also issued a letter requesting all DIFC members to give data on regular basis for:

• Number of times the BCP was invoked
• What were the cause and impact.

DFSA also issued a letter on cyber-related risk that guides the members on how to report cyber security incidents. It also monitors if the firms are providing cyber security awareness to their employees.

On March 24 2020 DFSA issued a letter stating its response to COVID-19. It mentioned the plan for continuing it’s operation with international financial service regulators and its own members.