The Dubai International Financial Centre (DIFC), located in the heart of Dubai, is the premier financial hub in the Middle East, offering investors and businesses access to the UAE’s dynamic and opportunity-rich market. Establishing investment funds in the DIFC provides a wide array of advantages for investors and fund managers alike.
Why Establish a Fund in DIFC?
1. Robust Legal and Regulatory Framework
- Independent Regulator: The Dubai Financial Services Authority (DFSA) ensures a strong regulatory environment with high standards of investor protection and fund management.
- 100% Foreign Ownership: Investors can fully own their businesses in DIFC without the need for a local partner.
- Cross-Border Activities: The legal framework supports international financial operations, facilitating cross-border investments.
- Common Law System: DIFC operates under an English-speaking common law system, distinct from UAE law, offering greater legal certainty for international investors.
2. Attractive Tax Environment
- Tax Exemptions: Funds established in DIFC enjoy a 50-year guarantee of zero taxes on profits, capital, and assets, along with zero tax on employee income.
- Double Taxation Treaties: The UAE’s extensive network of treaties enables efficient operations within the GCC and MENASA regions.
3. High Counterparty Confidence
- Reputable Regulatory Authority: The DFSA is internationally recognized, instilling confidence in the regulatory framework.
- Judicial Independence: DIFC courts are independent, ensuring impartial and reliable dispute resolution, appealing to foreign investors.
4. Diverse Financial Ecosystem
- Concentration of Financial Institutions: DIFC hosts numerous international firms, wealth management entities, and service providers, creating a robust ecosystem for fund managers.
- Regional Financial Hub: As one of the largest fund domiciles in the region, DIFC attracts an increasing number of international funds.
5. Strategic Geographic Location
- Regional Access: Positioned at the nexus of Europe, Asia, and Africa, DIFC offers strategic access to the Middle East, Africa, and South Asia (MEASA) markets.
- Proximity to Assets: Fund managers can establish offices close to the assets they oversee, ensuring effective management.
6. A Variety of Fund Structures
DIFC offers several fund structures, including:
- Public Funds: Designed for retail investors with no minimum subscription requirement.
- Exempt Funds: Targeting professional clients with a minimum subscription of USD 50,000.
- Qualified Investor Funds: Geared towards high-net-worth individuals and institutions with a minimum subscription of USD 500,000.
- Other Funds: Specialised structures such as Islamic, hedge, private equity, venture capital, and property funds, each with tailored regulations and benefits.
7. Target Market Access
- GCC and MENASA Region: DIFC-based funds can tap into growing investment opportunities across the GCC and MENASA regions, leveraging Dubai’s position as a key financial hub.
In conclusion, Dubai offers unparalleled benefits for fund managers and investors, with its regulatory strength, tax efficiency, legal certainty, and access to emerging markets, making DIFC an ideal destination for establishing investment funds.
STAY IN THE LOOP