The local regulatory environment in the UAE

As the UAE grows, there are more opportunities for Firms to service investors based in the region such as expats and other retail clients. Servicing these clients from entities outside the UAE is becoming more difficult with the regulators increasing protections against “brief case salesman”. The Securities and Commodities Authority (SCA) and the Central Bank of the UAE have placed restrictions on foreign companies operating in the UAE without an appropriate license. They have provided some exemptions to these requirements but these exemptions are mainly focused on providing financial services only to large institutions.

Although the Financial Free Zones of the DIFC and the ADGM are in the UAE, Firms that are established in these Free Zones are still considered to be foreign companies under the regulations and therefore have to comply with same rules as those Firms offering services to UAE clients say from Europe or the Far East. Also, the Financial Free Zones are limited in the services that can be provided in the UAE including dealing in the UAE Dirham and insuring risks in the UAE. Therefore depending on the type of business and the type of client you are targeting as to whether SCA or the UAE Central Bank may be a more appropriate regulator.

What types of financial service firms are regulated by SCA and the UAE Central Bank?

Currently, brokerage, commodity, advisory and asset management firms are governed by SCA and banks, credit providers and currency providers are covered by the Central Bank, although the intention is to move most of the non-prudential regulation to SCA in the long run.

One of the main issues firms have with setting up in the UAE outside of the Free Zones is the fact of requiring a local sponsor.

However, it is also possible to have a UAE licensed entity with 100% foreign ownership if the parent entity can meet certain thresholds and is able to set up a UAE Representative Office.

If you are considering setting up in the UAE some of the things you will need to take into consideration are detailed here:

To discuss your requirements with our UAE-based Authorisations team, contact us now

We have a dedicated team of experienced compliance consultants who can provide expert assurance and peace of mind. Get in touch to see how we can help your Firm.