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Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia (MEASA) region, proposes to enact new Variable Capital Company ("VCC") Regulations. The proposed regulations seek to significantly enhance investment structuring and asset management options for proprietary investment in the DIFC.
Jacques Visser, Chief Legal Officer at DIFC Authority, said: "DIFC Authority is pleased to announce the public consultation for our new Variable Capital Company Regulations. The proposed regime offers a unique vehicle with flexible share capital structuring for proprietary investment activities."
Variable Capital Company Regulations
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.
Key features of the VCC regime
Key features of the proposed VCC Regulations include:
- Structure: A VCC may be established as a standalone company, or an umbrella structure with either incorporated or segregated cells.
- Flexible Share Capital: Share capital is equal to net asset value, providing flexibility for issuing and redeeming shares and enabling efficient capital inflows and outflows.
- Distributions: A VCC is not restricted to paying dividends out of its profits but can make distributions from capital based on the VCC's (or relevant Cell's) net asset value.
- Asset segregation: A VCC enables segregation of assets and investment strategies through incorporated or segregated cells, facilitating different risk profiles and the ringfencing of asset liability, whilst allowing for economies of scale through centralised management and oversight.
Who may benefit?
The proposed VCC model will be of particular interest to family-owned businesses, high-value multi asset holdings and complex proprietary investment portfolios, such as secondaries structures, that wish to benefit from consolidated management and the structuring options and flexibility that a VCC provides.
Further details about the proposed VCC Regulations can be found in Consultation Paper No. 2 of 2025, available at link. The proposed regulations have been posted for a 30-day public consultation period with the deadline for providing comments ending on 24 July 2025.
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