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.
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
- Legal and Regulatory framework supports cross border business activities and provides 100% foreign ownership. There is no capital repatriation in the DIFC and the DIFC also doesn't put any restrictions on foreign human capital
- There are numerous tax benefits and no tax for employees or corporate incomes
- Counterparty Confidence is at par with that of the EU's as the DIFC is an independent regulator with English speaking common law judicial systems and in essence entirely separate compared to the rest of the UAE
- Diverse Ecosystem is another prime feature of the DIFC that facilitates fund management companies and fund managers. DIFC is the largest fund domicile in the MEASA region and cohabitating global law and auditing firms, and every professional services
- DIFC is the financial centre in the MEASA region, an emerging economy with a huge availability of wealth for investment business and well positioned to exploit all potential markets
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.A Member Firm of Andersen Global
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