26 Apr Fund Management License Through the Dubai International Financial Centre (DIFC)
This article highlights how you can obtain a fund management license through the DIFC
Specialist fund management services are becoming more necessary in the Middle East and North Africa, (MENA) region due to the growing pools of wealth. Both institutions and high-net-worth individuals seek experts based in the region to address their investment requirements.
DIFC offers a secure and supportive regulatory regime for local, regional, and global players to domicile, manage and distribute funds, making it the leading fund management jurisdiction in the region. Fund Management is one of the four focus areas within DIFC’s Wealth and Asset Management, including Asset Management, Private Equity, and Wealth Management.
Benefits of Setting Up a Company Within the DIFC
DIFC (Dubai International Financial Centre) stands out as the region’s financial hub thanks to its well-established legal and regulatory framework. Dubai fully integrates with regional and international markets as a global city and center of business, trade, and tourism. It is a safe and stable environment for conducting business.
Some primary reasons to incorporate within the DIFC are:
- DIFC’s Wealth and Asset Management market represents approximately 30% of the GCC’s Gross Domestic Product (GDP) combined.
- The legal system and courts of DIFC adhere to the Common Law framework, overseen by an independent and esteemed regulator, and adjudicated by an equally reputable court system.
- The ability to establish and structure funds in a sophisticated manner.
- Global recognition and acceptance of DIFC funds.
- Companies located in DIFC have no limitations or restrictions on the flow of capital or profit and are not subject to currency exchange controls.
- DIFC guarantees zero taxes on corporate income and profits for 40 years. This benefit is further strengthened by the UAE’s extensive network of double taxation avoidance treaties.
Obtaining a Fund Management License
DIFC takes great pride in making the incorporation as stress and hassle-free as possible.
The general steps for a fund management license are:
- Consult with a Dubai Financial Services Authority (DFSA) and DIFC service advisors to explore fund options.
- Send a letter of intent to the DIFC Authority
- Supply the DFSA with a comprehensive business plan along with an application
- Receive an in-principal approval from the DFSA
- Register and establish the company with the Registrar of Companies
- Obtain the license from the DFSA.
A firm falling under this category of business licensing may receive a license to conduct one or multiple financial services, including managing a collective investment fund, managing assets, providing trust services as a trustee of an express trust, providing custody, and managing a profit-sharing investment account.
The base capital requirement for this category is USD 500,000, while a fund manager must maintain USD 140,000 as base capital.
Fees to Get Your DIFC License
To operate within the DIFC, you must have business premises within its jurisdiction. The cost of this can vary based on your business needs.
| Initial Costs | Recurring Costs |
|---|---|
| Incorporation: $100 | Confirmation statement: $300 |
| Commercial license: $1000 | Commercial license: $1000 |
| Data Protection fee: $500 | Data Protection renewal fee: $250 |
Required Appointments for a Fund Management License
An authorized firm in DIFC engaged in fund management must appoint the following positions:
- At least two directors
- Senior Executive Officer who must be an in-house UAE resident and can also serve as a director
- Risk Officer
- Finance Officer, which can be an in-house executive director or senior manager
- Money Laundering Reporting Officer who must be a UAE resident and can also be a Compliance Officer
- Compliance Officer who can also be outsourced but must be a UAE resident and can also be an MLRO.
Get Help in Getting Your DIFC License for Fund Management
You can avoid the hassle of back and forth with the DIFC by processing your application via our consultants. We have an in-depth understanding of what it takes to get a license as swiftly as possible. Timeframes for a fund management license can range from a few weeks to several months. So please contact us to see how we can get your license as quickly as possible!
Note: You might be interested to read about Family Office in Dubai or ADGM & DIFC Foundation / ADGM Foundation
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