When you are about to setup your financial service business in Dubai, there are a plethora of things to evaluate before that. These include choosing the right business jurisdiction (free zone vs. mainland) and other important considerations  

Additionally, you need a local sponsor to aid you in business setup, meet the minimum capital requirements, obtain necessary licenses, understand regulatory compliance, and select a suitable location. 

Continue reading further to learn more about starting a financial business in the UAE. 

Business structuring and licensing for business setup in Dubai

Mainland vs. Free Zone: Company formation in Dubai on the mainland requires you to obtain local sponsorship from Emiratis to function. You can operate your business in free zones with regulations that are less stringent in nature and allow you to enjoy potential benefits regarding tax payments. 

You need to select whether your organization needs to function within a free zone or the mainland. Furthermore, there are no geographical limitations within the mainland.

Type of License: The type of your intended activities will influence the type of license you need to acquire. Insurance brokerage, wealth management, and investment advisory are factors that would furthermore influence the license you would need. 

You can either acquire a trading license, a commercial license, or a service license. A lot of free zones allow multiple activities within one license. An additional fee must be paid for that reason.

Benefits of Starting a financial business setup in Dubai

• Corporate and personal income taxes are 0%.
• No limitations on currency
• Capital and profit repatriation
• A prime location for an office

When launching a financial service business here, you can instantly benefit from the nation’s 0% corporation and personal income tax rates.

Zero currency limitations and capital and profit repatriation are further advantages of setting up in Dubai.

And that’s not all. You get an ideal location at one of the most prominent addresses in Dubai, access to a vibrant living and working environment, usage of our top-notch business center, and a selection of customized support packages to assist your business launch.

Along with a seamless registration process, you’ll also get access to comprehensive support services, priority government relations help, and packages that are specifically designed to meet your unique business requirements.

Key Facts and statistics about financial company formation in Dubai, UAE

1. Economic Hub: With the banking and insurance industry making up over 9% of the UAE’s overall GDP, Dubai is the financial hub of the Middle East and a major contributor to the country’s GDP.

2. DIFC (Dubai International Financial Centre): As of 2023, the DIFC had approximately 4,300 businesses and more than 36,000 experts working for it, making it a significant global financial center.

3. Ease of Doing Business: According to the World Bank’s 2020 Ease of Doing Business report, the UAE came in at number 16 in the world. However, the 2022 report placed the UAE at 11th globally.

Regulator Compliance 

• FSRA, or Financial Services Regulatory Authority: For your specific financial services, you must understand the regulations and licensing requirements of the FSRA to be legally secure. 

• Dubai Financial Services Authority: DFSA oversees the financial services sector in Dubai. You need to comply with their regulations and laws in order to legally run your business organization in the country. 

• Compliance Requirements: Your business organization needs to be in compliance with KYC (know your customer) verifications and AML (Anti-Money Laundering) laws to be legally secure for efficient and long-term functioning in Dubai. 

Target Market and Client Base 

• Market Analysis: For your business organization, you must understand the clientele within the Dubai market. The specific needs of your target clientele and demographics must be understood in order to setup and grow your business organization. 

• Marketing Strategy: In order to reach your target audience and carry out significant differences within your products and servicing, you need to come up with a successful marketing strategy technique. 

Infrastructure and Technology 

• Cybersecurity: In order to protect your sensitive customer data, you need to put robust cybersecurity systems in place. They will enhance your safety. 

• Digital Platforms: For securing data storage, account management, and client onboarding, you can invest in robust technology solutions. This will also ensure your safekeeping in the long run from data breaches and other associated issues. 

Financial planning and budgeting for your business 

A startup in Dubai demands flawless budgeting and cost efficiency. The following paragraph sums up how to carry out effective financial planning for your new business. 

Initial setup costs

In Dubai, the capital required for setting up your business varies depending on the Free Zone, type, and size of the startup. 

The costs have the following categories:

License fees: A license in Dubai is specific to the type of business and may be priced anywhere between 15000 and 50000 AED a year. 

Registration fees: A one-time fee paid before your business takes off; it varies between 10000 and 25000 AED

Office space: The cost of an office space ranges between 2,000 and 100,000+ AED a year, depending on whether you require a flex desk or a warehouse. 

Operational expenses: These stretch beyond the preliminary costs of setups. 

Visa costs: The cost of visas includes the fees for application and medical testing and registration of Emirates ID and can go up to 5000 AED per visa.

Insurance: You must budget as per your requirement of employee health insurance, liability insurance, or property insurance. 

Bank guarantee: A deposit taken as security fee for each employee visa. It is refundable and costs 1000-3000 AED.

Professional and legal fee: Optional but essential, this varies depending on the kinds of services you seek—legal, financial, or accounting. 

Detailed planning: An important investment to carry out your business planning and cash flow. 

Consult Experts: You need to seek the advice of an expert who is well versed with business operations in Dubai. This will help you prevent wrong investments. 

Review Adjust: You need to keep tabs on your yearly expenses and adjust your investments accordingly to make them cost-effective. 

Business setup in Dubai with zero capital investment 

It is quite difficult to setup a new business in Dubai without any initial investment. This is because the steps required to even establish the business require capital for the different kinds of fees, be it legal compliance, fees for different licenses, or registration fees.

Moreover, Dubai is a hub for entrepreneurs, but all professional businesses require a minimum investment, especially for obtaining a trade license, without which you cannot proceed to the subsequent steps. Other legal approvals also require a sum to be paid. 

Business models like consultation or freelancing cost much less and can be even lower if you do not require an office space and can work remotely. In such models, the investment is only limited to securing a permit from the free zones

Types of Licenses required to operate any kind of business in Dubai Free Zones

Any business that needs to setup roots in Dubai Free Zones needs a license specific to their business type. For example, manufacturers operating goods will need an industrial license. A business offering any type of professional service will need:

• a professional license
• advisories will require a consultancy license
• a service-based business needs a service license
• Lastly, any kind of trading will require a general trade license

Conclusion 

The setting up of a financial business organization in Dubai can be hectic and complicated in certain cases. This is where third-party consultancies such as JSB Incorporation come into play. 

We would aid you in the process of your financial business setup, making it easier for you to go through each step. Contact us today to learn more.