Setting Up A Regulated Fintech License In The Difc | Difc Fintech License Cost - 10 Leaves

By Author: Himaja Teki
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Regulated Fintech Licenses In The DIFC:

Firms interested in carrying out fintech activities from the DIFC are required to submit applications to the Dubai Financial Services Authority, or DFSA.

The DFSA, for the purposes of authorisation and supervision, categorises fintech activities based on the type of activity being carried out, and the minimum base capital required.

Consequently, fintech activities can form part of Category 3 and Category 4 licenses, which various related activities such as advising and arranging investments, portfolio management (discretionary and non-discretionary), money service businesses and digital/robo advisory activities.

How to go about it:

Due to the higher risks associated with these activities, the DFSA places higher entry-level requirements and restrictions on the license itself. Chances are that the first point of entry be through the DFSA Innovation Testing License, rather than a full-scale application. This is however, decided on a case-to-case basis.

You can also setup in the DIFC with a DIFC Innovation License, which is for non-regulated technology ...
... startups. Such a license encourages startups to establish a presence in the region, employ staff and prepare for regulation by then applying to the DFSA for regulatory approvals. You cannot however, carry out regulated
activities until a Financial Services Permission has been obtained.

DIFC Regulatory Capital requirements:

The base capital requirement for a regulated fintech business license is usually US$ 10,000. Actual capital required will depend on the nature, quantum of business and forecasted annual expenditure, as per the financial model of the proposed firm.

There are three components of capital considered – base capital, risk-based capital and expense-based capital. For smaller firms, expense-based capital is usually the highest, and can be around US$ 150,000 for a Category 4 regulated fintech license application.

Costs:

Setting up a DIFC Regulated Firm involves the following interactions:
Dubai Financial Services Authority (DFSA):

The DFSA is responsible for reviewing and approving all applications for financial services. Costs depend on the activities applied for, which puts the applicant in one of five categories.

Generally, there are two components of DFSA fees. One – an application processing fee, and the other, an annual licensing fee.

Application fee: from US$ 5,000

License fee: from US$ 5,000

Registrar of Companies (DIFC ROC):
The ROC helps to set up the legal structure of the DIFC Regulated Firm. Shareholders can be individual, or corporate. There are many options available, such as
‘Private Company Limited by Shares’ and ‘Limited Liability Partnerships’. In case of Private Company Limited by Shares, the costs for setting up include:

Application for reserving a name (2 working days): US$ 800

Application for Incorporation of a Private Company Limited by Shares (5 working days): US$ 8,000

Commercial License on Incorporation (5 working days): US$ 12,000 (annual fee)

This can vary, depending on the entry strategy adopted.

Data Protection:

The data protection notification is part of the process of registering a new entity in the DIFC. The costs involved are as follows:

Registration - US$ 500

Annual renewal – US$ 250

Office spaces:

Every entity registered in the DIFC is required to lease a physical office. You can choose from the Gate and surrounding buildings, or other buildings within the DIFC, such as Emirates Financial Towers, Central Park, Park Avenue, Burj Daman and Currency House.

Prices vary, depending on the space availed and the building. Here is an indication of the prevailing rates:

DIFC Business Centre – from a two-desk office at US$ 35,000.

DIFC Fitted Offices – from US$ 55 per square foot.

Other buildings – from US$ 32,000 per annum

For fintech licenses, DIFC has attractive packages starting from US$ 15,000 per annum. Get in touch for more details.

Visas:

Establishment Card Application – US$ 630

PSA Deposit – US$ 682

Visas (per visa) – from US$ 1,500

PSA Deposit (per visa) – US$ 682

I am Himaja Teki From Bangalore, India. Working as a Content Writer.