DIFC announces new Variable Capital Company Regulations

The regulations seek to significantly enhance investment structuring and asset management options for proprietary investment in DIFC

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Dubai International Financial Centre (DIFC) announced the enactment of new Variable Capital Company (VCC) Regulations.

Jacques Visser, Chief Legal Officer, DIFC Authority, said, "DIFC Authority is excited to announce the enactment of its Variable Capital Company Regulations. The Variable Capital Company Regulations advance DIFC's position as a global hub for sophisticated investment structures. The VCC regime also caters to a wide spectrum of applicants, supported by Corporate Service Providers to ensure strong compliance and operational integrity across the sector."

The proposed VCC framework is designed to accommodate proprietary investment activities and will not require DFSA authorisation or a requirement for a regulated fund manager, unless the vehicle engages in regulated financial services activities.

This positions the VCC as an efficient vehicle for investors seeking the benefits of collective investment activity, or segregated investment strategies, whilst leveraging the flexibility and reduced procedural requirements for managing share capital.

Following public consultation, the Regulations introduce expanded eligibility criteria allowing any applicant to apply to establish a VCC in DIFC, provided the VCC appoints a Corporate Service Provider (CSP) to perform administrative, compliance and regulatory liaison functions with the Registrar of Companies on its behalf.