Domestic Fund – FSRA in ADGM
What is ADGM, FSRA and what do they do?
The Abu Dhabi Global Market (ADGM) is the financial-free zone of Abu Dhabi and an international financial centre, globally recognised for its pioneering and business-friendly ecosystem. The Financial Services Regulatory Authority (FSRA) is one of ADGM’s three independent authorities, tasked to support and supervise all financial activities. Together ADGM and FSRA operate in line with international best practices, promoting Abu Dhabi’s economic and financial growth.
Why establish an Investment Domestic Fund in Abu Dhabi?
An investment fund established in Abu Dhabi benefits from:
- Strategic Location: Situated at the crossroads of East and West, serving as a global gateway to two-thirds of the world’s most attractive growth markets.
- Strong Economic Ties: Robust economic connections with major global economies like the United States, China, and the European Union.
- Diversified Economy: Supported by strong economic foundations and a resilient, dynamic economic structure.
- Attractive Tax Regime: Zero taxes on personal or corporate income and profits during a long-term period, alongside numerous double taxation treaties.
- No Restrictions on Foreign Talent and Capital: No restrictions on foreign talent, capital repatriation, or currency exchange controls for existing groups’ branches or subsidiaries in ADGM.
- Forward-Looking Regulations: Embracing innovation and digitization, with forward-looking regulations and regional governance standards.
- ADGM’s Unique Legal Framework: Operating under a legal framework aligned with English Common Law and its own civil and commercial laws and regulations.
- FSRA’s Robust Legislation Model: Built on the legal framework used by global financial centres ensuring a stable and secure system.
What is an Investment Domestic Fund?
An Investment Fund means any arrangement concerning the property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangement to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income.
The arrangement must be such that the persons who are to participate do not have day-to-day control over the management of the property, whether or not they have the right to be consulted or to give directions.
A Domestic Fund in Abu Dhabi refers to an investment fund that is established and operated within the United Arab Emirates (UAE), specifically under ADGM.
Types and Features of Investment Domestic Funds
The below table compares the key characteristics and requirements of the different types of domestic investment funds:
- Public Fund
- Exempt Fund
- Qualified Investor Fund
| Feature | Public Fund | Exempt Fund | Qualified Investor Fund |
|---|---|---|---|
| Legal Form | - Open or Closed Ended Investment Company - Limited Investment Partnership - Investment Trust | - Open or Closed Ended Investment Company - Limited Investment Partnership - Protected or Incorporated Cell Company | - Open or Closed Ended Investment Company - Limited Investment Partnership - Protected or Incorporated Cell Company |
| Eligible Investors | – Professional, – Retail | – Professional, | – Professional, |
| Number of Investors | Unlimited | Unlimited | Unlimited |
| Minimum Initial Investment per person | Not subject to minimum initial investment requirement | USD 50,000 | USD 500,000 |
| Fund Manager Capital Requirements | USD 150,000 | USD 50,000 | USD 50,000 |
| FSRA Registration or Notification | Registration required | Notification required 14 days before the initial offer of Units | Notification required 14 days before the initial offer of Units |
| Placement of Units | Public | Private | Private |
| Prospectus | Required to be submitted to the FSRA before registration | Required for marketing | Required for marketing |
| Fund Manager | - Mandatory appointment - Must apply for registration of the Fund | - Mandatory appointment - Must apply for registration of the Fund | - Mandatory appointment - Must apply for registration of the Fund |
Application Fees
The FSRA application fees payable by the Fund Manager, or the person proposing to be the Fund Manager for registering a Public, Exempt or Qualified Investor Fund, depend on if the Fund is an Umbrella Fund or not and on the number of additional sub-funds. In addition, further costs may apply if an authorised person or a Fund Manager is filing a Prospectus or supplementary/ replacement Prospectus with the FSRA, respectively.
Annual Fees
The annual contributions payable to the FSRA, vary based on the specific type of the fund and, similarly to the application fees, if the Public, Exempt or Qualified Investor Fund is an Umbrella Fund or not.
Establishing an FSRA Investment Domestic Fund with SALVUS
The SALVUS Investment Funds Licensing team consists of specialised professionals able to support you in every step of your Domestic Fund registration with FSRA. Our team employs a high-quality project management and stands ready to support you in selecting the most appropriate type and structure of investment fund based on your business objectives and vision.
We work closely with our clients and their teams in collecting and preparing the necessary documentation for submitting a complete application to the regulator, ensuring instantaneousness. We further provide guidance and assistance, in order to satisfy all your post-registration regulatory obligations for the successful launch of operations.
Please contact us at info@salvusfunds.com if you are interested in establishing a Domestic Fund in Abu Dhabi.