With more than three decades of experience as a businessman and being the director of several companies in the UAE, India, and Africa, I can attest to the challenges of setting up a business in a foreign country. While passion alone cannot help you launch your business, you need to understand the intricate landscape of business set-up and the governing rules and regulations to establish a company in Dubai, especially if you are starting an investment company. As a 4th generation businessman in the UAE, I have witnessed how Dubai has evolved as a major fintech hub, revolutionizing the financial sector by attracting investors from across the globe. With its strategic location, business opportunities, and investor-friendly policies, Dubai offers a conducive environment for setting up an investment company. Through my extensive experience running Kiltons Business Setup Services, I have helped countless aspirants in launching an investment company in Dubai. The purpose of this article is to impart all the information I have acquired over the years on business set-up to anyone who may require them to successfully launch their investment company in Dubai. Let me take you through everything you need to know about starting an investment company in Dubai.
Requirements for Getting an Investment Company License in Dubai
Meeting the following requirements is necessary to acquire an investment business license in the UAE:
- It is required to have a minimum share capital of AED 25 million, if the investor requires the suffix ‘holding’ in their trade name
- Get a trade license from the appropriate governing body.
- Adhere to all relevant laws and regulations.
Documents Required:
- Filled out the application form for the business license
- Passport copies of shareholders and directors
- Proof of address for shareholders and directors
- Shareholder’s agreement (if applicable)
- Memorandum and Articles of Association
- Proof of financial standing
- Documentation for leasing the premises for the company
- Relevant documents based on your investment company’s structure and activities
- Business plan
- Board resolution
It can be challenging to acquire a license for investment businesses in the UAE. It’s essential to consult with professionals to meet all the requirements and prevent any possible delays.
Step-by-Step Guide to Opening an Investment Company
These are the steps to acquire an investment company license in Dubai.
- Define your business model and services
To begin, it is essential to outline the business activities you intend to undertake. The type of setup and license you need can be influenced by your business activities
- Choose the right jurisdiction
Investment and finance licenses can be obtained in free zones such as DIFC and ADGM and on the Mainland. Since each jurisdiction has its own distinct rules and regulations, it is crucial to carefully choose the one that is the most suitable for your company.
- Secure the minimum required capital
You need at least 1 million AED as capital to set up a financial institution. To qualify as a financial investment company, the capital requirement is a minimum of 25 million AED.
- Appoint a UAE national as a director
In Dubai, it is necessary to have a local sponsor who must hold a majority of 51% shares in the company.
- Obtain a trade license and other necessary permits
Once you have completed the business registration process, it is necessary to obtain a license from the relevant authority. The process of getting a license differs depending on the jurisdiction, but it usually involves submitting an application, showing proof of financial stability, and meeting additional criteria.
- Comply with all applicable laws and regulations
It is mandatory to comply with all the applicable laws and regulations after you have acquired your license. This involves the payment of taxes, the submission of yearly reports, and the maintenance of accurate records.
Cost of Investment Company Establishment in Dubai
The expenses associated with establishing an investment company in Dubai can fluctuate based on various factors such as the chosen free zone, office space, visa prerequisites, and any extra services. The average cost of setting up a business in the DIFC and ADGM is usually between AED 50,000 to AED 100,000. This covers expenses such as license fees, registration fees, visa fees, office rent, and other related costs. To obtain an accurate cost estimate customized to your needs, it is recommended to seek advice from business setup professionals.
Select the Right Free Zone for Your Investment Company in Dubai
When establishing an investment company in Dubai, choosing the right free zone is essential. The DIFC and ADGM are top-tier free zones, designed specifically for financial and investment businesses, offering a multitude of advantages.
Dubai International Financial Centre (DIFC):
Known for its cutting-edge infrastructure, regulatory support, and solid legal system, the DIFC is a well-respected global financial hub. The range of financial services offered includes wealth management, asset management, private equity, and various other services. The DIFC provides an environment that is conducive to business and attracts renowned financial institutions and professionals from all over the globe.
Button - Start a Business in DIFC
Abu Dhabi Global Market (ADGM)
The ADGM, situated in the UAE’s capital city, is a well-known free zone that provides a beneficial environment for investment companies. Its main focus lies in diverse financial activities, such as managing funds, providing asset services, offering financial advice, and specializing in fintech. The ADGM is well-known for its innovative methods, transparent regulations, and wide-reaching connections with global investors.
International Freezone Authority (IFZA):
If you are looking to invest in foreign markets or become a shareholder of a UAE mainland company, the ideal choice would be to register your company in the free trade zone of the IFZA, which is specifically designed for international trade and investments.
Read More - Business setup in IFZA
Activities Covered by the free zones
Investment companies can choose from a comprehensive list of permitted activities offered by both the DIFC and ADGM. These include:
- Wealth management
- Asset management
- Fund management
- Investment advisory
- Financial consultancy
- Private equity
- Fintech innovation and more
- Venture capital
- Securities trading
- Islamic finance services
How location impacts your business operations and opportunities
If you choose to establish your investment company in the DIFC or ADGM, you can take advantage of multiple benefits, including:
100% Foreign Ownership: Foreign investors have the opportunity to fully own their companies in both free zones, without the requirement of a local sponsor.
Tax Exemptions: Corporate and personal income taxes are waived for a specific duration for investment companies in the DIFC and ADGM, increasing the potential for growth and profitability.
Infrastructure and Networking Opportunities: DIFC and ADGM provide cutting-edge infrastructure, top-notch amenities, and an extensive network of global experts, encouraging collaboration and facilitating business expansion.
Regulatory Framework: The regulatory frameworks in both free zones are designed to provide investor protection, promote transparency, and ensure compliance with international standards.
Specialized environments, incentives, and streamlined procedures are provided by free zones, such as IFZA, to support investment companies.
What are the steps to set up a hedge fund in Dubai?
Before setting up a hedge fund in Dubai, you must ensure compliance with the governing regulations. The drafting of the prospectus, which includes details about the owners, company strategy, investment plan, asset valuation, and administration procedures, is one of the most important aspects. A hedge fund is established after a legal organization is incorporated in Dubai. Hedge funds in the United Arab Emirates are required to have a minimum capital of 10 million AED for the establishment. To promote itself successfully within its industry, a hedge fund needs to employ a variety of promotional strategies. Wealth management companies in Dubai are willing to carry out a number of business strategies for the hedge fund’s promotion and maintenance, so foreign investors may also turn to them for assistance.
Why UAE is a Great Place for Investment Businesses Establishment
The UAE is known for being an appealing destination for investment companies due to several compelling factors.
Strategic Location: Dubai’s prime location at the intersection of Europe, Asia, and Africa positions it as a gateway to expanding economies and grants effortless access to a significant consumer market.
Steady Economy: In the United Arab Emirates, the economy is known for its diversity, stability, and significant emphasis on innovation, entrepreneurship, and sustainable growth.
Investor-Friendly Environment: The United Arab Emirates government is fully committed to cultivating a business-friendly atmosphere, with policies that are attractive to investors, efficient administrative procedures, and regulatory frameworks that provide support.
Infrastructure and Connectivity: Dubai offers top-notch infrastructure, advanced transportation systems, state-of-the-art communication networks, and a well-developed logistics network.
Access to Global Talent: With its ability to attract highly qualified professionals from various countries, the UAE benefits from a diverse and skilled labor pool.
Conclusion
Dubai, United Arab Emirates, presents abundant possibilities for growth and achievement when establishing an investment firm. Due to its strategic location, investor-friendly policies, excellent infrastructure, and specialized free zones, Dubai is considered a prime location for investment enterprises. When it comes to business setup in Dubai, Kiltons stands out as the premier choice for entrepreneurs and investors seeking expert assistance. We have extensive expertise and a deep understanding of the local market, making them the ideal choice for comprehensive support in establishing an investment company. At Kiltons, we are committed to providing your financial business organization with the best incorporation services possible in a hassle-free manner. Our business setup consultants can help you at every stage of company formation since they are knowledgeable about the legal foundation. Speak with our consultants at Kiltons to learn more and to have a quick and easy business incorporation procedure.
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