Managing agents wanting to set up a service company in Dubai must be aware of the following considerations and requirements that make up the local environment.
Key considerations
Financial considerations
- Service companies are considered a Category 4 firm under the Dubai Financial Services Authority (DFSA) with Financial Service of Insurance Management. As a result, there must be a base capital requirement of $30,000 held in a UAE bank account.
- Corporate tax (if applicable) is dealt with by the service company and is paid to the federal tax authority.
- Dubai Financial Services Authority (DFSA) application fee of $20,000 and an annual fee of $25,000.
- Dubai International Financial Centre (DIFC) registration and incorporation fee of $8,000, and a $12,000 annual commercial licence fee.
Operational considerations
- The service company office must be located within the Dubai International Financial Centre (DIFC). The DIFC real estate team is available to assist and can be contacted directly.
- There is no centralised accounting and settlement system, therefore, managing agents must establish their own processes.
- There is no shared IT platform or common system in place. Managing agents will need to determine individual requirements during the setup stage.
Employee considerations
- Four mandatory functions required by the DFSA;
- Senior Executive Officer (SEO)
- Finance Officer (FO)
- Compliance Officer (CO)
- Money Laundering Reporting Officer (MLRO).
- The SEO must be based in the Dubai International Financial Centre (DIFC) Office.
- The role of CO and MLRO can be fulfilled by the same person or outsourced company.
- The FO role can be taken by a suitable candidate within the company group and does not need to be located in Dubai.[GA1]
- Visas are managed by the DIFC Government team who handle the process. They are granted based on office size (1 per 80sqft of office space).
- Visas are usually freely available to applicants, regardless of nationality.
Regulatory considerations
- Quarterly regulatory reporting is required, consisting of basic financial information and gross written premium (GWP), split across the 7 Life and 7 non-life classes of business.
- Annual reporting must be completed by an external auditor following DFSA standardised procedures.
- Annual Anti-Money Laundering (AML) reporting to be completed by the service company Money Laundering Reporting Officer (MLRO).
Launch Crystal+Local Requirements
DFSA application
To conduct insurance business in or from the Dubai International Free Centre (DIFC), the managing agent must apply for a license from the Dubai Financial Services Authority (DFSA). This application can be made either directly or through a consultancy or law firm.
Local space in DIFC
The service company must have a physical office space and SEO based in Dubai.
Lloyd’s registration process
Initiation
Co-ordinate with Lloyd’s teams to understand country interest, define service company and set timelines.
Register and setup
Managing agents will submit business plans and work with country managers for regional setup according to local regulations. In tandem the service company is registered on Atlas to complete necessary business and company details.
Due diligence
Managing agent’s maturity rating under PBO Principles is used to determine whether an Attestation or Decision Paper is completed, demonstrating satisfactory due diligence has been conducted.
Service Company Underwriting Agreement
Once all registration and set up requirements are met, formal service company underwriting agreement can be signed and service company can start trading on agreed date.
Additional information
- The Dubai Financial Services Authority (DFSA) regulatory approach is risk-based.
- Specialist reinsurance brokers are located in and source business directly to the Dubai International Financial Centre (DIFC) capacity.