Dubai is an influential financial hub offering attractive possibilities for businesses and investors. Its strong economy, strategic location, and appealing tax incentives make it a great gateway for foreigners wanting to start an asset management company in the region.
Also, Dubai’s economic markets are known to be one of the most powerful ones across the Middle East, with the Dubai Financial Market (DFM) and the Dubai International Financial Centre (DIFC) being among the top players. As of 2023, the DIFC is home to over 300 wealth and asset management businesses, managing assets worth more than $450 billion! Reportedly the city also ranks 22nd globally into the Global Financial Centres Index 2023, ahead of major hubs such as Geneva and Berlin.
This guide can help you if you are considering an asset management business setup in Dubai! From understanding the key steps to starting your asset management business in Dubai to fostering its growth within the area. So, let’s begin!
The Key Steps to Starting Your Asset Management Business in Dubai
At CorpCreators, we specialize in guiding businesses through the intricacies of setting up operations in Dubai. Our expertise extends to the asset management industry, where we offer a seamless and efficient process to establish your company. Here’s a step-by-step breakdown:
Step 1: Partner with CorpCreators
Our team of seasoned professionals understands the nuances of UAE regulations and can navigate the licensing process effortlessly. We provide expert advice and ensure your business is fully compliant with all legal requirements.
Step 2: Registering Your Asset Management Company
- Choose a Trade Name: Select a unique name that adheres to UAE Registry Office guidelines.
- Select a Legal Structure: Decide whether your company will be a sole proprietorship, partnership, or LLC.
- Choose a Location: Decide between Dubai Mainland or Free Zones based on your business needs and preferences.
- Define Business Activities: Clearly outline the specific services your asset management firm will offer.
Step 3: Office Location
Dubai’s Free Zones, especially those dedicated to financial services, offer numerous advantages:
- 100% Foreign Ownership: Full control over your business.
- Tax Benefits: Enjoy favorable tax incentives.
Step 4: Initial Approval
Submit your application to the relevant Free Zone authority or the Department of Economy & Tourism (DET), including:
- Business Plan
- Lease Agreement
- Passport and Visa Copies
- Trade Name Reservation Certificate
Step 5: Trade License
- Submit Documents: Provide the initial approval certificate, lease agreement, and identification of company directors and shareholders.
- Pay Fees: Settle the required fees.
- Obtain License: Once your application is approved, you will receive your trade license.
Essential Legal Requirements for Foreign Entrepreneurs
When starting an asset management company in Dubai as a foreign entrepreneur, comprehending the appropriate demands is crucial. Check out key points to consider:
Requirement | Description |
Residence Visa | Essential for operating a business in Dubai. Options include dependent, investor, or employment visas. Consider a Golden Visa for extended residency and benefits. |
Company Formation | Choose a legal structure (LLC, sole proprietorship, partnership). Meet minimum capital requirements. Draft a shareholder agreement if forming an LLC. |
Licensing | Obtain a trade license for your asset management activities. Depending on services, additional licenses may be required. |
Regulatory Compliance | Adhere to DFSA laws, implement AML/CFT measures, and follow corporate governance recommendations. |
Employment | Obtain work permits for foreign employees and comply with regional labor laws and rules. |
Tax Implications | Consider and be adept to corporate tax, VAT, and double taxation avoidance agreements. |
Financial Reporting | Maintain accurate economic records, conduct audits regularly, and comply with IFRS. |
Choosing the Right Business Structure for Your Asset Management Firm
Feature | Sole Proprietorship | Partnership | Limited Liability Company (LLC) |
Liability | Unlimited | General: Unlimited; Limited: Limited for certain partners | Limited |
Ownership | Single owner | Multiple partners | Multiple shareholders |
Taxation | Individual taxation | Partnership taxation | Corporate taxation |
Setup Cost | Low | Moderate | Higher |
Flexibility | Limited | Moderate | High |
Suitable For | Small-scale firms | Collaborations, seeking external investors | Most asset management firms |
Key Factors to Consider:
- Assess your risk threshold as well as the degree of security you’ll need for your assets.
- Consider the tax implications of each structure and any prospective tax benefits.
- Determine who’ll have control of the company, and exactly how you want to share profits and losings (in case of a partnership)
- Think about your long-term objectives and whether or not the structure can accommodate development for future expansion.
- Ensure the chosen structure complies with relevant requirements that are regulatory in Dubai.
Additional Considerations:
- Foreign Ownership: 100% Ownership in Dubai is generally given to asset management firms.
- Business Setup in Dubai Free Zone vs. Mainland: Consider the benefits and limitations of operating in a free zone or on the mainland.
- Professional Advice: Consult with CorpCreators legal and financial experts to get tailored advice based on your specific circumstances.
Cost Breakdown for Starting an Asset Management Company in Dubai
Cost Category | Estimated Range (AED) | Factors Affecting Cost |
Initial Investment Costs | ||
Licensing and Registration | 10,000 – 60,000 | Type of license, location (Mainland or Free Zone) |
Premises (Annual) | 30,000+ | Location, size of office |
Legal and Consultancy Fees | 15,000 – 40,000 | Scope of services required |
Ongoing Operational Costs | ||
Staffing (Annual) | 250,000+ | Size and experience of the team |
Utilities and Maintenance (Monthly) | 3,000 – 6,000 | Office size, usage, premises specifics |
Technology and Equipment | 30,000 – 150,000 | IT infrastructure requirements, cybersecurity measures |
Total Estimated Cost: AED 21,000 to AED 350,000
Note: These are estimated ranges. Actual costs may vary based on specific factors and individual business needs.
