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DFSA Category 2 License

A Category 2 Licence company is authorised to carry on one or more of the financial services of providing credit or dealing in investments as principal.

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Providing Credit

 

Providing Credit means providing a credit facility:

  • to a Person in his capacity as a borrower or potential borrower; or

  • to finance the acquisition of goods or services by a person.

 

It is immaterial that no, or reduced, interest or charges are payable by a person referred above if the person repays all or a specified part of the credit on or before a certain date.

 

It is immaterial whether the person is acquiring the goods or services from the credit provider, a supplier with whom the credit provider has a commercial agreement, or another person.

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Dealing in Investments as Principal

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Dealing in Investments as principal means buying, selling, subscribing for or underwriting any Investment or crypto token, as principal.

 

Capital Requirement

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The Capital Requirement for a Category 2 Licence is calculated, as the highest of:

  • the applicable Base Capital Requirement;

  • the Expenditure Based Capital Minimum; or

  • its Risk Capital Requirement plus applicable Capital Buffer Requirements

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Where the company has an Individual Capital Requirement (ICR) imposed on it then the capital requirement is its ICR plus risk capital requirement plus applicable capital buffer requirements.

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The DFSA may impose an Individual Capital Requirement (ICR) where it is of the view that company’s capital requirement is insufficient to address adequately all its risks, and in particular its Exposure to interest rate risk in the Non-Trading Book

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The base capital is USD 2 million except if the company is dealing in Investments as Principal (where it does so only as a Matched Principal), in which case its base capital will be USD 500,000.

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A company must calculate its expenditure-based capital minimum by multiplying its annual audited expenditure with the applicable ratio, as per below:

  • If the company holds client assets 18/52.

  • In any other case, 13/52

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Mandatory Officers

 

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Office

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The company must have its Head Office and Registered Office in the DIFC. Head office means the place where the day-to-day management and control of the business and licensed activities are carried out.

 

PREMIER DIFC SERVICES

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  • Initial consultation and assistance to choose the right licence

  • Assistance in preparation of legal documents, Regulatory Business Plan and, financial projections including application forms.

  • Application for initial approval from DFSA

  • Preparation of policies, procedures and manuals in line with DFSA Rulebook. These include Compliance, AML, Risk Management, Remuneration, Governance, Conflicts of Interest, and Business Continuity Planning.

  • Incorporation and licensing with DIFC Registrar

  • Finalisation of office space, insurance and other third parties’ requirements

  • Managing interviews of key officers with DFSA

  • Application for final licence from DFSA

  • Opening of bank account

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