Dubai International Financial Centre (DIFC) was established in 2004 as a financial-free zone having an independent legal and regulatory framework, aiming to foster growth and economic progress in the nation. The DIFC was designed to establish Dubai as a gateway to western investment in the region.
DIFC has recently introduced its Innovation and AI License to solidify Dubai’s stronghold in Artificial Intelligence and to provide technology start-ups with an affordable entry point for innovating in machine learning tools, fintech platforms, or anything related to Innovation and AI.
What is the DIFC Offering?
The Innovation License is a subsidized commercial license for innovation businesses regardless of the stage of development. The license costs around USD 1500 per year with an additional one-time fee of USD 100, which is far below the standard DIFC license fee structure. The license does not require a minimum share capital requirement.
The reduced license fee benefits a new business for at least the first two years to five years. If a business exceeds the headcount of 10 full time employees, the license fee may increase to USD 12,000 annually. This makes DIFC accessible for the early-stage innovation companies, making the initial phase of their business cost effective.
Eligibility
For Innovation License, the startups in the field of AI and machine learning, AR/VR, gaming, fintech, Insurtech, Protech, regtech, healthtech, edtech, greentech, martech, and e-commerce are all explicitly covered.
The license, however, does not cover financial services and strictly prohibits activities like financial advisory, payment services, crypto or NFT exchanges and the trading of physical goods. Although companies are required to maintain physical presence within DIFC, however this requirement can be fulfilled through one of the centre’s co-working spaces.
Beyond the License Itself
The attraction point of the license is the entire ecosystem behind it. License holder will be able to access the DIFC Innovation Hub, which is the largest innovation community in the Middle East, Africa, and South Asia region.
Further, the businesses get discounted access to Ignyte (DIFC’s digital platform), which connects founders with investors and mentors. In addition to the discounted license, the businesses will get 50% discount on co-working spaces and discounted visa fees.
The centre operates as an English common law jurisdiction, allowing 100% foreign ownership and allows full repatriation of capital and profits.
Conclusion
For AI and tech companies scouting jurisdiction to setup their base, DIFC, through its AI and Innovation license, provides a perfect location with compelling offers.
“This article is for information purposes only and does not constitute legal or professional advice”.
