Dubai is a very advantageous tax jurisdiction for foreign investors, including those who want to open a domestic or external fund and for those who want to act in the capacity of a fund manager.The taxation of an investment fund can depend on its type and whether or not it is domiciled in Dubai. The advisors at our law firm in Dubai can provide you with counseling and legal support regarding the taxation of investment funds and companies in Dubai. They can also help you register a business in the Emirates.
Taxation of fund-related activities in Dubai
No specific exchange control regulations are imposed in the UAE. Funds can be repatriated and certain tax-related matters for funding forms including debts, equity or securities may be considered on a case-specific basis.
An important distinction is made between domestic funds, external funds or foreign funds. Foreign funds established outside the Dubai International Financial Centre may be taxed according to different principles. In order to find out how a certain type of fund is taxed according to the jurisdiction in which it is domiciled, you can talk to a taxation expert. Our lawyers in Dubai can give you the necessary information on the double tax treaties concluded by the United Arab Emirates and how they influence the taxation of companies, funds, and businesses in general.
Costs associated with setting up a fund in Dubai
A minimum subscription is necessary for eachtype of investment fund in Dubai, except for the public fund. An additional management fee applies in addition to the minimum subscription. Funds in Dubai need to obtain a license from the Dubai Financial Services Authority (DFSA). An application fee, an annual fee per month and an annual ongoing fee per fund are also taxed for all types of funds in Dubai. These regulatory costs and other expenditures should be taken into consideration by investors and fund managers in Dubai. Moreover, fund managers in Dubai are subject to certain fees also payable to the DFSA.
The video below explains the taxation of investment funds in Dubai, therefore, we kindly invite you to watch: