Fund Management in the DIFC

Over the last decade, there have been a lot of changes to Dubai International Financial Centre’s (DIFC) fund regime. DIFC is providing a highly secure and supportive environment for local, regional and global players to domicile, manage and distribute funds. It is well positioned in the international fund markets and continues to be the leader in the region’s largest fund management jurisdiction.

Dubai is a global financial city, safe and stable socially, politically and economically with business, trade and tourism centers and is well connected to all regional and global markets.

Both financial institutions and HNIs are feeling an urgent need for competent and expert fund managers in the Middle East, Africa and South Asia (MEASA) region for addressing their complex investment requirements.

An investment fund provides a greater selection of investment opportunities, better management expertise, and lower investment fees than investors can get on their own. Fund management is one of the four areas of investment management while the other three are wealth management, asset management and private equity.

Why Setup an Investment Fund in the DIFC

DIFC is the leading financial centre and has a world class infrastructure for both professional and personal needs.

With DIFC funds, fund managers can have access to the GCC market and the bigger MEASA region and can avail tax advantage against any foreign source of income due double taxation treaties with that foreign country that UAE enjoys. Nil taxation on personal and corporate income is also hugely advantageous and attracts investment funding.

Specific Advantages

What are the Different Types of Funds

Public Funds

Public Funds are available to retail clients as directed by the DIFC and are usually subject to higher regulatory conditions as mandatory IOSCO compliance. Public funds don’t have any minimum subscription limit and can have any number of unit holders.

Exempt Funds

Exempt Funds are only available to professional clients with a minimum subscription of $ 50,000 and a maximum of 100 unit holders.

Qualified Investor Funds

Qualified Investor Funds are also available to professional clients with a minimum subscription of $ 500,000 and a maximum of 50 unit holders.

Special Islamic Funds

Special Islamic Funds require a fund manager to be authorized by the DFSA to carry out Islamic Financial business and must appoint a Sharia supervisory board.

Hedge Funds

Hedge Funds are also a type of investment fund which invest their clients’ money in alternative investments to beat the market or hedge against market uncertainties as risk management measures.

Private Equity Funds

Private Equity Funds are basically collective investment schemes used for making investments in various securities. In the DIFC, Private Equity Funds are closed ended.

Venture Capital Funds 

Venture Capital Funds come into the picture when wealthy individuals make an investment in potential startups for long term future growth of their capital.

Property funds

Property funds are investments in commercial property e.g. offices, factories and warehouses.

Takeaways

Setting up a fund in the DIFC requires setting up of a domestic fund manager and licensing an existing fund manager in a jurisdiction recognized by DFSA.

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