DMCC or IFZA: building for investors from day one
A fintech growth specialist relocating to the UAE with plans to raise investment, and one question: DMCC or IFZA. We recommended DMCC, because his company would have to stand up to investors' due diligence, and the company, the bank account, both visas and the office are now in place.
Speak to us about your situationThe situation
Elliot had lived in several countries and run companies in several more. Dubai was to be a long-term base, and he expected investors to come in down the line. The question wasn't where to set up so much as whether a budget free zone would carry the plan.
Most of the people we speak to need a company that fits what the business does and a bank account that works. Elliot needed that too, but he was looking further ahead. The company he opened now would be the one investors looked at later, so where it sat had to make sense then as well.
Why they came to us
He found us through our marketing while still living in Spain. After several online meetings he chose us as a firm that understood what a structure has to stand up to when investors carry out due diligence, not just the cheapest route in. Due diligence is the checking an investor does on a company before putting money into it.
What we recommended
DMCC, with a management-consultancy activity — not IFZA. IFZA is usually where we start with a new company, and it would have been the cheaper licence. What changed the answer for Elliot was the plan to raise money.
The companies a business like his deals with check it in the same way investors do, and one of the things they all look at is where the company is registered, and why. Elliot intended to raise money, and DMCC's reputation, the way it is governed and its international recognition stand up to that scrutiny. For the plan he had, that counted for more than the saving on a budget free zone.
DMCC is a Dubai government authority. In its own words it has "over 26,000 member companies from 180 countries", and it has won fDi magazine's Global Free Zone of the Year award nine times. For Elliot that meant a company sitting in a zone that is known well outside Dubai, which is what international recognition comes down to in practice. Those figures are DMCC's own, from its About page.
With Elliot's plan to raise investment, at Start Business Services we recommended DMCC and not the cheaper licence, because a due-diligence team asks why a company sits where it does, and we did not want his answer to be the price. What a DMCC company costs is set out on our DMCC free zone page.
It does not always go this way, as our other case studies show. A UK property-tech business that expected to need DIFC went with IFZA, and we set the company up there. A UK recruitment group with a board and investors behind it opened a branch in DMCC.
The outcome
The company was set up in DMCC, the corporate bank account opened, Elliot's visa and his partner's visa completed, and office space arranged. We handle the accounting and ongoing compliance.
Thinking about a move like this?
Tell us what the business does and where it is heading, and we will tell you whether we are the right firm.
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