Investors who want to open an investment fund in Dubai
enjoy a modern regulatory regime for the types of available funds. The fund regime in Dubai
is in line with the existing international standards.
The Dubai International Financial Centre (DIFC) is the prime location to base a fund in Dubai. The Dubai Financial Services Authority (DFSA) is the regulating agency of the DIFC and the one that imposes the rules and regulations for investment funds, investment restrictions and transaction requirements.
One of the experts at our law firm in Dubai
can give you complete details about the regulatory framework set forth by the Dubai Financial Services Authority.
Types of funds in Dubai
Two types of funds
can be set-up in the Dubai International Financial Centre: the public fund and the exempt fund. A licensed fund manager or an external fund manager must manage these. One of our lawyers in Dubai
can tell you more about the licensing requirements for fund managers in Dubai.
The public funds in Dubai
are used by retail investors and they observe the international standards for investor protection. These types of funds are subject to extensive disclosure requirements to that investors
may make an informed investment decision.
The exempt funds in Dubai are used by professional investors. A minimum investment of 50,000 USD is required for this type of funds. These cannot be traded publicly and have a limit of only 100 unitholders.
Special funds in Dubai include the following:
- Islamic funds: set-up and managed according to the Shari’a system;
- hedge funds;
- property funds;
- private equity funds;
- real estate investment trusts (property funds).
Rules and regulations for funds in Dubai
Funds set-up in Dubai must appoint a fund manager or asset manager. This individual must be licensed by the DFSA. There are two types of fund managers in Dubai:
- the domestic fund manager: operates in the DIFC and is licensed by the DFSA and offers his financial services for the purpose of managing a collective investment fund;
- the external fund manager: he is licensed and allowed to establish a domestic fund in Dubai without having a place of business within the DIFC; he must be licensed by a recognized Financial Services Regulator.
A number of fees are applicable to funds and fund managers in Dubai. These apply for a licensing application, the annual license fee, an annual fee per fund or the public fund registration fee. One of our attorneys in Dubai can give you more information about how these fees apply.