The Dubai International Financial Centre (DIFC) has an attractive fund regime and many domestic and external fund managers are based here. The types of investment funds that are available to investors in Dubai include domestic funds, external funds or foreign ones. The differences between them are mainly based on whether or not that fund is based in the Dubai International Financial Centre. Our lawyers in Dubai can give you complete details about the legislation for investments and the rules and regulations for fund managers in the Emirates.
Domestic funds in Dubai
The domestic fund is, as its name suggests, a type of fund that is based in the Dubai International Financial Centre. Foreign investors have several options is they decide to establish their fund in this free zone:
-the public fund: offers good investor protection and is open to a large variety of entrepreneurs;
-the exempt fund: has a less stringent regulatory regime compared to the public one thus its registration is completed faster;
-the qualified investor fund: is established by a fund manager, either domestic or foreign and also enjoys a special registration process and a different control system, compared to the other two types of funds.
The public fund is more accessible to investors because it does not require a minimum starting capital. The other two types need a minimum subscription (larger in the case of the qualified investor fund).One of our attorneys in Dubai can give you more information about the regulatory regime and the application procedure with the Dubai Financial Services Authority.
External funds in Dubai
An external fund in Dubai is one that is based outside of the Dubai International Financial Centre but is managed and controlled by a fund manager who operated from within the DIFC. The foreign fund in Dubai is one that is established outside the DIFC altogether. Domestic fund managers in Dubai can open an external fund under certain conditions. In order for the external fund to become operational, it must comply with the regulations in the jurisdiction outside of Dubai where it is based.
For a better understanding of the types of investment funds in Dubai, we invite you to watch the video below: