In recent years, the UAE has become a favored location for many investment funds and investment managers seeking new investments in the region and access to new sources of capital.
The UAE‘s investment funds landscape is a dynamic and multifaceted sector growing in popularity as a costeffective and tax-efficient fund managements hub. The funds are broadly categorized into public funds, accessible to the public, and private funds, exclusive to professional and institutional investors. Investment funds can be structured as open-ended, with variable capital, or closed-ended, with fixed capital, and can operate within regulated financial free zones that offer costeffective and flexible structuring options. They may focus on specific investment products, asset classes, or sectors, including private equity, venture capital, real estate, and Islamic funds, among others.
The UAE offers a very attractive tax regime for investment funds, making it one of the leading fund domiciles in the Middle East. Among the key tax benefits are corporate tax exemptions for qualifying investment funds, no withholding tax on dividends, interest or other payments to investors, no capital gains tax on the sale of shares, bonds or fund units, an extensive double tax treaty network, exemptions for dividend and interest income, free zone tax regimes, no personal income tax on investors and fund managers’ salaries, and VAT exemptions for certain financialservices. This guide provides insight into the key UAE tax and regulatory considerations for asset managers and investment funds.
