A financial consultancy or advisory firm comprises of highly qualified financial advisors and consultants who help individuals and companies make strategic decisions to reach a certain financial goal. For clients who are individuals (retail clients and HNWI), these goals include retirement planning, tax planning, education planning and succession planning. In some firms, financial advisors help with the management of one’s wealth – on discretionary or non-discretionary basis. For corporate clients, these include helping clients facilitate mergers and acquisitions, make informed investment decisions and ensure the overall financial health of the company.
In the UAE there are mainly 3 jurisdictions to set-up a financial consultancy or advisory.
Setting up a financial consultancy in the ADGM
The Abu Dhabi Global Market (“ADGM”), a financial free zone located in the capital city, Abu Dhabi. The ADGM is regulated by the Financial Services Regulatory Authority (“FSRA”)and the regulatory status of a financial advisory would fall under the Prudential Category 4 firm and its Permitted or Authorised Activity would be ‘advising on financial products’. When structuring, a financial consultancy can be structured as either a Private Company Limited by Shares or as a Foreign Recognised Company (also known as a Branch). Within the structure, the FSRA requires financial consultancies to appoint a Money Laundering and Reporting Officer who must be a UAE resident, a UAE resident Compliance Officer, a UAE resident Senior Executive Officer and a Finance Officer who does not need to be a UAE resident. The capital requirement is either USD 10,000 or 6/52 of the annual audited expenditure, which ever one is higher. The incorporation time is roughly between ten (10) to eleven (11) weeks.
Setting up a financial consultancy in the DIFC
The Dubai International Financial Centre (“DIFC”) is a financial free zone located in Dubai. It is regulated by the Dubai Financial Services Authority. In terms of the regulatory status, structure, permitted or authorized activity, mandatory appointments and capital requirements, it is the same as the ADGM. However it takes roughly between nineteen(19) to twenty-one (21) weeks to incorporate, which is almost twice as long in comparison to the ADGM.
Setting up a financial consultancy in Mainland UAE
It was just recent that Mainland UAE opened its doors fully to foreigners to allow 100% full ownership of companies in its onshore zone. The benefit of setting up a company in Mainland UAE is that there is no restrictions in which emirate one conducts its business in. Mainland UAE is regulated by the Securities and Commodities Authority (“SCA”) and a financial consultancy in this economic area can be structured as either a sole establishment or a civil company. It’s permitted or authorized activity will be ‘financial consultancy and financial analysis’. Mandatory appointments in financial advisories based in Mainland UAE are all required to be UAE residents which includes: a Money Laundering and Reporting Officer or a Compliance officer; a Chief Executive Officer; a General Manager; and a financial analyst with a university degree or a professional certificate and at least three (3) years of work experience in the role. The capital requirement must be paid up and at least USD 277,777 or AED 1,000,000.
For detailed information on the Marketing rules, approval process and requirements, regulator’s, registry’s and notary’s fees, and estimates of certain running costs please download our detailed comparison chart in the link at the beginning of this article. If you require any assistance on how to set up a Financial Consultancy or Advisory Firm in the United Arab Emirates, you can contact us.
lecocqassociate provides a full range of financial regulatory, corporate and commercial advice in relation to the structuring and incorporation of entities.
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