What is the Difference Between DFSA and DIFC?
Difference Between DFSA and DIFC
You may know that Dubai has become a significant financial center in the Middle East as global investors and corporations are being lured into the United Arab Emirates (UAE). Do you know who the key players are that make Dubai a financial hub? In that case, you might be shocked to know that the Dubai International Financial Centre (DIFC) and Dubai Financial Services Authority (DFSA) are the key players in Dubai. However, both terms are connected. Still, there is a significant difference between the DIFC and DFSA. Today, we are going to discuss the difference between DFSA vs DIFC.
Basic Difference between DIFC and DFSA
Before we dive into the comparison between the Dubai International Financial Centre (DIFC) and Dubai Financial Services Authority (DFSA), we recommend you understand the overview between DIFC and DFSA:
Dubai International Financial Centre (DIFC) – Overview
You may understand Dubai International Financial Centre (DIFC) was developed in 2004. However, this center gained a reputation as an esteemed financial hub in the region. The DIFC is more than just a physical location as it is a thriving financial ecosystem developed to attract global businesses and boost economic growth.
Do you want to learn more about the DIFC? In that case, you might feel happy after knowing that the DIFC is the leading global financial center in the Middle East, South Asia, and Africa (MEASA) region. This area has a close-to 20-year track record in order to boost trade and investment flows within MEASA. You might be surprised to know that the center links the fastest-growing market of the MEASA region with the Asian, Middle Eastern, and African economies via Dubai.
You may feel happy after reading that the DIFC operates within the recognized and independent regulatory framework based on English Common Law. Indeed, you have read it right! This is a separate entity in the UAE that comes with its own regulatory framework and legal system.
The DIFC is home to over 2000 companies, including banks, insurance companies, asset management, and more. We hope you understand the Dubai International Financial Centre (DIFC) overview. So, it’s high time to dive into the overview of the Dubai Financial Services Authority (DFSA).
Dubai Financial Services Authority (DFSA) – Overview
As we have discussed before, the Dubai Financial Services Authority (DFSA) and Dubai International Financial Centre (DIFC) are linked. Don’t you know how? In that case, you might be shocked to know that the DFSA regulates the DIFC.
You must know that the Dubai Financial Services Authority (DFSA) serves as the guardian of financial integrity under the DIFC. It operates as the autonomous regulator of financial services in the DIFC. Indeed, you have read it right! This entity is an independent regulator of financial operations and market activities operated in or from the DIFC. However, this authority also has a principal function of becoming a policymaker, enforcer, and regulator.
We understand some of you might still looking for information about the role of this entity. In that case, you might feel better to learn that the DFSA’s role is to make sure that a financial service company operates transparently in the DIFC, abiding by international standards and regulations.
Do you know what the vision of DFSA is? In that case, you could experience satisfaction in recognizing that it’s imaginative and prescient to convert this vicinity right into a leading financial center within the Middle East, Africa, and South Asia area. The mission of the DFSA is to protect and increase the reputation of the DIFC as the safe and well-regulated financial center in Dubai.
DFSA vs DIFC
We have learned only the overview of the Dubai International Financial Centre (DIFC) and Dubai Financial Services Authority (DFSA) till now. Apart from this, there are several key points you should know to understand the difference between DFSA vs DIFC. We have developed a table for you to let you understand the difference between DFSA and DIFC:
| DIFC | DFSA |
| As we learned in the previous section, the Dubai International Financial Centre (DIFC) is an onshore financial center developed in 2004. | Dubai Financial Services Authority (DFSA) is the financial regulatory authority for the financial free zone in the DIFC. |
| You may be surprised to learn it has a mission to support the development of Dubai as a regional and international financial hub. | We are sure you are willing to know the mission of the DFSA after knowing the mission of the DIFC. In that case, you may feel satisfied after knowing that the DFSA’s objective is to contribute to the stability of the financial system by testing and supervising financial activities operating within the DIFC. In addition, the DFSA promotes a high standard of market conduct. |
| As we mentioned above, the DIFC offers a wide variety of services, including world-class office space, financial and legal services, and much more. Plus, if you want to establish your business in the region, you can also enjoy the regulatory framework aligned with international standards. | The DFSA supervises and looks over financial companies like yours under the DIFC and gives them licenses. Indeed, you have read it right! You must also obtain a license from DFSA to run your company in this area. Moreover, this authority also investigates within your company or other company to ensure your business complies with international standards. |
How can Flyingcolour Business Setup help you?
As today we have learned, DIFC is a free zone financial center in Dubai that is regulated by the DFSA. In short, both terms are connected to each other. However, starting your business in the DIFC can be lucrative because this area offers several advantages. Flyingcolour Business Setup can help you start your company in this free zone. We can help you at each stage to begin your company in the DIFC in Dubai. Plus, our experts can clear all your doubts about DIFC and DFSA.
To learn more about DFSA vs DIFC, book a free consultation with one of the Flyingcolour team advisors.
Please note that this article was published on 26/06/2024 by the federal policies and updates at the time of writing. For the latest info please talk to our consultant.
