Valsen Fiduciaries Funds

Dubai Foreign Fund

The Dubai Financial Services Authority (DFSA) regulates Collective Investment Law of 2010. This Act sets out the guidelines pertaining to the application and licensing of domestic funds and foreign funds in Dubai.

About Dubai Foreign Fund

Foreign funds are those domiciled outside of the DIFC. These can be sold to qualified investor provided they are regulated in a recognized jurisdiction. The DFSA has established a list of jurisdictions recognized for this purpose and can also consider other jurisdictions on a case by case basis. Sales of foreign funds are subject to marketing rules set out in the DFSA’s conduct of business rules for authorized firms.

Dubai Foreign Fund Legal Requirements

Requirements

Description

  1. Applicable legislation

DIFC Collective Investment Law of 2010

  1. Supervising Authority

Dubai Financial Services Authority (DFSA)

  1. Corporate vehicle permitted

Any Licensed

Investment Companies

Investment Partnership

Investment Trust

Protected Cell Company

  1. Share capital or equivalent

 
    • Minimum subscription

USD 50,000

    • Minimum investors

Not more than 100

  1. Directors / Partners / Trustees

 
    • Minimum number

2

    • Corporate Directors / Partners / Trustees allowed

Yes

    • Local Directors / Partners / Trustees required

No

  1. Fund functionaries required

 
    • Custodian

 
      • Custodian required

Yes

      • Local custodian required

No

      • Eligible custodian

The custodian must be authorized from any DFSA recognized jurisdictions

    • Fund manager / Investment manager

 
      • Fund manager required

Yes

      • Local fund manager required

No

      • Fund manager requires to be licensed

Yes

      • Eligible fund manager

A domestic fund manager who has obtained a DFSA license

An external fund manager from an acceptable DFSA recognized jurisdiction and can be either a body corporate managed fund from a recognized place of business in the respective jurisdiction

    • Fund administrator

 
      • Fund administrator required

Yes

      • Local fund administrator required

No

      • Eligible fund administrator

DFSA licensed fund administrator

    • External auditor

 
      • External auditor required

Yes

      • Local external auditor required

Yes

      • Eligible external auditor

The auditor must be registered by the DFSA and appointed in accordance with the Regulatory Law 2004.

  1. Asset Requirements

 
      • Restriction on type of asset class invested

None

      • Asset diversification requirements

None

      • Limitation on size of the fund or total assets under management

None

  1. Local physical office required

No

  1. Prospectus / Offering Memorandum required to be filed

No

  1. Eligible for listing

No

  1. License fees

 
    • License application fee

Nil

    • Annual license fee

USD 4,000

  1. Estimated license processing duration

1 month

Ongoing Obligations

Requirements Description
Monthly obligations
Office Required
Quarterly obligations
None
Annual obligations
Publish its annual audited financial statements within four months of the year end and an interim report within two months of the period end.
Other obligations
None
Tax Obligations and Other Exemptions
Requirements Description
Business Tax
None
Withholding Tax
No withholding tax is payable on dividends and/or interest payable.
Value Added Tax (VAT)
Not applicable to funds in its entirety.
Stamp duty Act
None
Trades Tax Act
None
Immovable Property Transfer Restriction Act
None
Immigration Decree
Mutual funds are allowed to employ expatriate employees.
Exchange Control Act
The provisions of the exchange control act do not apply to mutual funds.
Foreign Earnings Act
The foreign earnings act is not applicable to mutual funds in its entirety.

Benefits of a Dubai Foreign Fund:

  • A broad range of corporate vehicles permitted for the fund
  • Enjoy tax free benefits for both the foreign fund and the fund manager.
  • Quick and efficient licensing duration for the fund
  • No approval required to set up the fund from the DFSA
  • Less stringent regulations by the DFSA