How do you set up an AI company in DIFC?

AI Licence or Innovation Licence: which one fits

DIFC describes the AI Licence as a subsidised commercial licence for AI firms looking to set up in the region. It gives access to the Dubai AI Campus, which sits within the DIFC Innovation Hub.

DIFC describes the Innovation Licence as open to all technology and innovation firms that are developing or testing new or innovative products. It names sectors such as AI and machine learning, gaming, FinTech, HealthTech, EdTech, PropTech, ClimateTech and e-commerce.

The two licences share the same structure and most of the same activities. The AI Licence adds activities for AI research and consultancy and for distributed ledger technology services. If AI is the core of your product, the AI Licence is the natural fit. If you build other technology, the Innovation Licence usually is.

What DIFC requires

DIFC's setup guide for the Innovation Licence sets four requirements:

• Non-financial. The company cannot conduct financial services such as financial advisory, payment services or crypto or NFT exchange.
• Technology-related. The company must provide a type of technology, for example a software solution, AI or blockchain.
• No general trading. The company cannot trade or sell physical products, including import and export.
• Physical presence. The company must have premises in DIFC. The minimum is a flexible desk in the co-working space.

The guide also says there is no minimum capital requirement for entities under the Innovation Licence.

Activities you can choose

DIFC lets you select more than one activity under the licence. The activity list in its guides includes:

• Software house
• Technology research and development
• Information technology consultants
• Internet consultancy and internet content provider
• IT infrastructure and network consultancies
• Portal and public networking services
• Web design
• Cyber security consultancy
• Data classification and analysis services
• Education and training computer software, and education technologies research and development
• Electronic chips programming
• AI Licence only: innovation and artificial intelligence research and consultancies
• AI Licence only: distributed ledger technology services, without trading or operating an exchange for currencies, crypto assets or commodities

The process and how long each stage takes

Stage 1 is in-principle approval. You submit an online initial approval application and DIFC reviews it. DIFC's guide says this stage takes around five to seven working days.

Stage 2 is registering the legal entity on the DIFC client portal:

1. Complete the application to register with DIFC.
2. Submit certified passport copies for the shareholders, directors and company secretary.
3. If a shareholder is a company, provide a board resolution approving the incorporation.
4. Apply and pay for the co-working space.
5. Submit the final application and sign the Articles of Association electronically.

DIFC's guides say full incorporation takes three to four weeks, and that the second stage depends on how quickly the applicant completes these steps. The licence is only issued once a lease is active.

DIFC's onboarding is digital, and its guide states that you do not need to be physically present to apply.

Visas

DIFC's guides allow up to four visas on the first flexible desk. Visa applications open only after the entity is incorporated, and the company first needs an establishment card and a personnel sponsorship agreement with the DIFC Authority.

For an employment visa DIFC lists a passport copy, a photograph, a signed employment contract showing the job title, and the applicant's highest educational certificate, attested by the UAE embassy in the country of issue. The immigration authority can ask for more.

Bank account

You can start opening a bank account once the entity is registered and the commercial licence is issued. DIFC is clear that account opening remains at the discretion of the bank. Banks typically ask for:

• The ownership structure, showing the ultimate beneficial owners
• Identity documents, country of residence and source of wealth for each beneficial owner
• Certificate of incorporation, articles of association and share certificate
• A resolution authorising the account and naming the signatories
• The DIFC lease agreement

Ongoing obligations and renewal

• Renew the licence and the lease every year.
• File a confirmation statement with the DIFC Registrar of Companies at each licence renewal.
• Notify DIFC under its data protection law before, or as soon as, you process personal data.

The licence fee is subsidised for an initial period. After that it depends on the number of full-time employees. DIFC sets both the period and the fee, so check the current terms before you commit.

When another route fits better

• You want to offer financial services. These licences cover non-regulated activity only. Regulated activity goes through the Dubai Financial Services Authority.
• You trade physical goods. Look at a commercial licence in another free zone or on the mainland.
• You do not want premises in DIFC. Some other free zones do not require a physical desk.

What NXTSTAR does, and what we do not

We check your activity against the licence requirements before you apply, prepare the in-principle application with you, and guide you through registration, workspace, visas and the bank account documents.

We do not decide approvals. DIFC does, and banks decide whether to open an account. We are an independent consultancy and are not part of DIFC.