How to Starting Up your DIFC Holding Company
Investors worldwide, especially in the GCC region, seek ways to consolidate and efficiently manage their assets. With the growing investor ecosystem and significant family wealth, structures are increasingly demanded to help high-net-worth individuals manage their investments effectively. The DIFC holding company is one such structure that stands out.
A holding company is a company that owns outstanding stock in other companies, consolidating investments under a unified umbrella for streamlined management and reporting. Typically, holding companies manage existing investments and expand portfolios through new investments based on pre-determined criteria.
About The Dubai International Financial Centre (DIFC)– It is a leading financial hub for business, fintech, and lifestyle and provides an advantageous environment for holding companies.
Here are some compelling reasons why you should consider establishing a holding company in the DIFC:
Understand Codified English Common Law:
The DIFC offers a modified version of the English Common Law, which provides foreign investors with additional security and stability. The Dubai Financial Services Authority (DFSA) acts as the regulatory body, enforcing international regulatory standards and contributing to the DIFC’s appeal as a business destination.
Premium Jurisdiction:
The DIFC is recognized globally as a top 10 onshore financial center, emphasizing regulation and visibility in the investor community and attracting substantial investments. It serves as a hub for proprietary investment activities and offers a range of investment options in various sectors.
DIFC Courts:
The DIFC Courts initiative establishes legal frameworks adhering to the highest international standards, operating under Common Law. The DIFC Wills & Probate Registry facilitates legacy planning, enhancing the legal and regulatory landscape.
Visa Services:
Unlike offshore companies, a DIFC holding company is intended to be an operational entity, allowing companies to apply for visas for their staff and families, contributing to a dynamic and well-staffed work environment.
DIFC 2.0:
The DIFC is undergoing significant expansion, with plans to construct more office and creative spaces, residences, retail spaces, and entertainment. This expansion, dedicated to fintech and innovation, fosters an environment that attracts top talent globally, creating a self-contained ecosystem.
Additionally, there are specific advantages to establishing the DIFC, such as its legal and regulatory framework that supports cross-border activities, 100% foreign ownership, no restrictions on foreign talent or employees, and no restrictions on capital repatriation. There are also tax benefits, including zero taxes for 50 years on income, profits, capital, or assets from 2004 and zero tax on employee income. The DIFC provides counterparty confidence with its highly regarded, independent regulator, independent, English-speaking, standard law judicial system, and risk-based regulatory approach.
The DIFC is home to a diverse ecosystem, central to regional deal-making, with a high concentration of international firms, financial bodies, investment funds, wealth management firms, banks, and financial institutions. It also houses world-class regional and international law and auditing firms and other professional services, making it the largest fund domicile in the region. It is well-positioned to harness the potential of emerging markets, with management offices, holding companies, and family offices located closer to the assets they own or manage.
Conclusion:
In conclusion, the DIFC provides an ideal environment for effectively setting up and managing a holding company. The meticulous application process, including due diligence and background checks, ensures that only serious investors can establish a presence, maintaining the sanctity and reputation of the center. Once installed, a world of opportunities emerges, allowing investors to effectively manage existing portfolios and tap into the growing MENA investment ecosystem.
