How to set up an Insurance Brokerage in DIFC | PRO Partner Group
Dubai International Financial Centre (DIFC) is a leading financial hub in the Middle East, offering a favourable environment for businesses in the financial sector. Establishing an insurance brokerage in DIFC can be a lucrative venture, considering the region's growing demand for insurance products and services.
DIFC is one of Dubai’s central and core special economic zones, therefore, it has seen significant interest for financial and business services entrepreneurs to seek company formation in DIFC and to establish a DIFC insurance brokerage company, for which it is essential to be prepared.
What is the application process for setting up a DIFC insurance brokerage?
1. Initial preparation
It is important to seek professional assistance when engaging in company setup in DIFC, in order to understand the Dubai Financial Services Authority (DFSA)/DIFC requirements and process modules for financial institutions. This will make the following processes easier to navigate and give guidance to requirements such as accommodation.
2. Letter of Intent (LOI)
Once the intended financial service activities have been decided upon, the applicant firm should a letter of intent (addressed to DIFCA). There is no prescribed format, but the LOI has a template that generally covers the following:
- Intent of the Firm and the intended activities to be conducted. Including any financial services and the category of the service. Mentioning the entity type (branch, subsidiary, or start-up).
- Reasoning for company formation in DIFC.
- Highlight those who will be present in the entity. Including ‘mandatory appointments’, resources, and functions.
- Corporate structuring.
- Office Space Requirements.
- Company details such as name, jurisdiction, regulator, proposed name of DIFC entity, company brief, number of employees.
3. Regulatory Business Plan (RBP)
The Regulatory Business Plan (RBP) must articulate the strategy and justification for establishing operations within the DIFC, showcasing effective business management and control measures. Complying with the expectations outlined by the DFSA in this plan is crucial.
Key steps include:
- Identify intended activities.
- Identify all business and regulatory risks.
- Provide explanation of how risk will be monitored, and controls will be implemented.
- Account for any future development plans.
A detailed business description is a crucial aspect of the overall application and significantly influences the DFSA's decision-making process.
Upon completion of the drafted RBP and the preparation of 3 years' worth of financial projections, a copy should be submitted to the DFSA for an initial review. Subsequent to this preliminary assessment, a meeting will be arranged with the DFSA to discuss comments and receive valuable feedback.
4. Complete the DFSA application forms
The next step is to complete the DFSA application forms. The completed application forms and supporting documents should be submitted to the DFSA along with with the license application fee.
5. Complete the DFSA application process
The DFSA need to be satisfied that their criteria are being met from incorporation and will continue to do so.
The key criteria include:
- Legal status: To be formed in the DIFC or as a branch from an entity in another jurisdiction. For branches the DFSA would expect the outside jurisdiction to have internationally compliant regulatory and legal standards.
- Location of offices: Activities to be carried out from the DIFC.
- Ownership structure: The DFSA should be made aware of the company structure and any associated companies or parties.
- Sufficient resources: A company should possess the necessary resources to conduct the proposed activities, with well-established systems, and effective controls. Additionally, the presence of an internal audit function is mandatory.
- Senior management: A firm must appoint a certain management role and compliance positions within the company. The competence and integrity of the proposed senior management team will be evaluated.
The applications will be processed with the expected timeline:
- A letter acknowledging the application's receipt is dispatched within 5 business days of its submission.
- An initial review letter is issued within 15 business days of receiving the application.
- The DFSA strives to conclude the final review and provide a recommendation within 3 months of receiving the application.
When successful, the DFSA will issue an ‘in-principle’ letter which will allow you to then complete the DIFC Registrar of Companies (ROC) process.
6. Register with the DIFC Registrar of Companies (ROC)
Once the DFSA Application has formally been submitted together with fees, it is advisable to start the
preparation of the ROC documents to ensure a smoother registration process.
- The ROC will advise the name of DIFC entity, type of license applied for, and the name and contact details of the Senior Executive Officer (SEO).
- Complete the online forms.
- Once completed, the Commercial License will be issued.
Once the Commercial License has been issued, the process for residency visas and work permits can be performed. After the DIFC employee has completed their visa process, they can do the same for their spouse and dependants.
8. Complete the DFSA License
The DFSA will issue an AUT License if the applicant can provide:
- Successful registration with the Registrar of Companies.
- Successful firm capital.
- Taken suitable premises within the DIFC.
- Have met any other outstanding matters.
Applicant firms have a period of 3 months to complete this process.
How can PRO Partner Group help?
At PRO Partner Group, we have decades of experience in the corporate services industry in the UAE and wider GCC and key industry connections to help you with company formation in DIFC.
Establishing an insurance brokerage in DIFC requires careful planning and adherence to regulatory requirements. PRO Partner Group can assist you in following these steps to best position your insurance brokerage for success in this thriving financial hub.
If you need assistance with this or any other related onshore or offshore company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or KSA, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at email@example.com or complete the contact form below and we will be delighted to assist you.