TRW & Co · Banking, Finance & Capital Markets
Asset Management in the UAE
Asset management in the UAE is licensed by three regulators: the Capital Market Authority onshore, the DFSA in the DIFC and the FSRA in ADGM. A new Capital Market Law took effect in January 2026, ADGM created lighter manager categories in September 2026 and the DIFC is consulting on reform, so managers face real choices and real deadlines.
Key pointThe jurisdiction where you manage money and the route by which you reach investors are separate decisions: a DIFC or ADGM licence does not by itself permit marketing to onshore UAE investors.
At a glance
New onshore regulator
The Capital Market Authority replaced the SCA on 1 January 2026, and onshore firms have a one-year transition, extendable, to regularise their status.
ADGM manager categories
Since 16 September 2026, ADGM offers Sub-Threshold, Institutional and Venture Capital Fund Manager categories with lighter capital and governance requirements.
Foreign manager deadline
ADGM Foreign Fund Managers must meet new requirements, including a ban on host structures and a closed-ended QIF limit, by 31 March 2027.
DIFC fund minimums
DIFC Exempt Funds require a US$50,000 minimum subscription and Qualified Investor Funds US$500,000, both offered privately to Professional Clients.
DIFC reform proposals
DFSA Consultation Paper No. 173 of July 2026 proposes abolishing the External Fund Manager regime and allowing employee co-investment in funds.
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What asset management in the UAE covers
Asset management in the UAE covers every business that manages money or investments for others: fund managers running private equity, credit, real estate or hedge strategies; discretionary portfolio managers serving wealthy families; investment advisers; fund administrators and custodians; and the regional offices of global houses. It also reaches family offices that start to manage capital for relatives outside the immediate family, which can quietly turn a private arrangement into a regulated one.
The sector has grown rapidly. Global managers have opened offices in the DIFC and ADGM to be close to sovereign wealth funds, government-related investors and a growing private wealth base, while regional managers have used the same centres to raise and run funds for international investors. The regulators have responded with lighter regimes for smaller and institutional managers, and the onshore regulator has been rebuilt from the ground up.
For a manager, the legal questions come in a predictable order: which jurisdiction and licence, which fund vehicle, how to market to UAE investors, and how to run the business day to day without falling foul of conduct, prudential and anti-money laundering rules.
Choosing a jurisdiction: onshore, DIFC or ADGM
Three regulators license asset management in the UAE. The choice affects the licence, the fund vehicles available, who you can market to and how much regulatory capital and infrastructure you need.
| Feature | Onshore (CMA) | DIFC (DFSA) | ADGM (FSRA) |
|---|---|---|---|
| Core legislation | Federal Decree-Law No. 33 of 2025 on the Regulation of the Capital Market; SCA fund regulations continue in transition | DIFC Regulatory Law, Collective Investment Law 2010 and DFSA Rulebook | Financial Services and Markets Regulations 2015 and FSRA rulebooks |
| Legal system | UAE civil law; federal courts | Common law; DIFC Courts | Common law with English law applied; ADGM Courts |
| Private fund types | Private funds, including closed-ended PE, VC and credit funds | Exempt Fund (US$50,000 minimum) and Qualified Investor Fund (US$500,000 minimum) | Exempt Fund and Qualified Investor Fund |
| Light-touch manager regimes | Not currently distinct | VC fund manager regime; further relief proposed in 2026 | Sub-Threshold, Institutional and VC Fund Manager categories since September 2026 |
| Access to onshore investors | Direct | Via passporting or a local promoter | Via passporting or a local promoter |
Most international managers choose the DIFC or ADGM for their common-law framework, familiar fund vehicles and English-language regulators. Onshore licensing makes sense for managers focused on UAE retail investors, local listed funds or onshore real estate funds. Tax treatment, examined below, rarely decides the question on its own because both centres and the mainland sit within the federal corporate tax system.
Onshore asset management under the Capital Market Authority
The onshore regime for asset management in the UAE changed fundamentally on 1 January 2026. Federal Decree-Law No. 32 of 2025 replaced the Securities and Commodities Authority with the Capital Market Authority, and Federal Decree-Law No. 33 of 2025 became the governing statute. Fund establishment and management, portfolio management, financial advisory, custody and promotion are all regulated activities requiring a CMA licence or approval.
Existing firms have one year from 1 January 2026 to regularise their status, a period the CMA may extend. Existing SCA decisions continue so far as they are consistent with the new laws, which means the 2023 investment fund regulations, SCA Board Decision No. 01/R.M of 2023, still govern fund structure, offering documents and valuation onshore for now. Those 2023 regulations significantly reduced the minimum capital for fund management companies and allowed full foreign ownership, opening the onshore market to new entrants.
Enforcement powers are materially stronger under the new law. Administrative fines can reach AED 200 million or a multiple of the profit made, and the CMA can designate systemically important licensees and require recovery plans. Managers should treat the transition year as a chance to update policies, not just to re-file. Our securities regulation page tracks the implementing resolutions.
Asset management in the DIFC
DIFC fund managers are authorised by the Dubai Financial Services Authority, usually in Category 3C, which covers managing assets and managing a collective investment fund. Applicants must show adequate resources, systems and controls, and fit and proper senior individuals, including a Senior Executive Officer, Finance Officer, Compliance Officer and Money Laundering Reporting Officer, although some roles can be combined in smaller firms.
The DFSA funds regime offers Public Funds for retail investors, Exempt Funds for Professional Clients with a US$50,000 minimum subscription, and Qualified Investor Funds with a US$500,000 minimum. Exempt Funds and QIFs are offered only by private placement and benefit from fast-track notification, two business days for a QIF. An External Fund Manager regime has allowed managers from recognised jurisdictions to run DIFC funds without a DFSA licence, using a DFSA-licensed fund administrator or trustee as local agent.
In July 2026 the DFSA published Consultation Paper No. 173, proposing to remove specialist fund labels in favour of a risk-based approach, allow employees to co-invest in their employer's funds, abolish the External Fund Manager regime with a short transition, extend relief for VC managers and explore tokenised fund units. The consultation closed on 7 September 2026; managers relying on the External Fund Manager route should plan for its possible removal. Our DIFC financial regulation page covers authorisation.
Asset management in ADGM after the September 2026 reforms
ADGM managers are authorised by the Financial Services Regulatory Authority. On 16 September 2026 the FSRA brought into force the first set of reforms from its Consultation Paper No. 12 of 2025, with immediate effect.
New manager categories
The Sub-Threshold Fund Manager category is for managers of closed-ended, non-retail funds with committed capital up to US$200 million, with a base capital requirement of US$50,000 and relief from internal audit and finance officer requirements. The Institutional Fund Manager category is for managers running only institutional funds with a US$5 million minimum subscription and no natural-person investors, with an expenditure-based capital requirement lower than for full-scope managers. Venture Capital Fund Managers form a sub-category of the Sub-Threshold category, with capped fees. Existing managers can apply to vary their permissions into the new categories.
Employee investment and foreign managers
Employee investment vehicles now let staff and directors invest in the funds they work on without the vehicle itself being licensed as a fund. Foreign Fund Managers, by contrast, face tighter rules: they may manage only closed-ended Qualified Investor Funds, must submit to ADGM law and the ADGM Courts and may not use host structures. Existing foreign managers have until 31 March 2027 to comply. Our ADGM financial regulation page explains the application process.
The new ADGM categories reward accurate forecasting. A Sub-Threshold manager must vary its permission before accepting commitments that take it over US$200 million, so build a buffer into your fundraising plan and start the variation application before the final close, not after.
Distributing funds to UAE investors
A licence to manage is not a licence to market. Distribution is where most problems with asset management in the UAE arise, because the investor base spans three regulatory perimeters.
Passporting. Under the UAE fund passporting arrangements, qualifying DIFC and ADGM funds can be registered for promotion onshore through their home regulator, with the onshore regulator confirming registration. Retail marketing of a passported fund requires an onshore-regulated custodian.
Foreign funds onshore. Foreign funds may be promoted onshore only by private placement to professional and counterparty investors, through a licensed local promoter, after registration with the CMA. Reverse solicitation remains available but must be evidenced.
Within the free zones. Foreign funds may be marketed in or from the DIFC or ADGM only by an authorised firm with the right permissions and within the relevant rules. Our page on financial promotions sets out each route in detail, and our investment funds page covers fund formation.
Choose the licence for where you will manage the money; choose the distribution route for where your investors actually live. They are rarely the same place.
The licensing process for a new manager
Licensing for asset management in the UAE is a regulator-led conversation rather than a form-filling exercise. The steps below apply, with variations, in all three regimes.
- Define the business plan. Strategies, products, target investors, expected assets under management and where investors are located. Regulators test applications against this plan.
- Choose the regime and category. Onshore, DIFC or ADGM, and within each the appropriate licence category, such as an ADGM Sub-Threshold or Institutional Fund Manager.
- Engage the regulator early. Both the DFSA and FSRA expect pre-application discussions, and they shape the formal application.
- Build the people and policies. Appoint key individuals, draft the compliance manual, AML programme, risk framework, conflicts policy, valuation policy and outsourcing arrangements.
- Submit the application. File the application with the business plan, financial projections, regulatory capital calculation, organisational chart and individual applications for controlled or approved functions.
- Answer regulator questions and meet conditions. Expect several rounds of questions. In-principle approval is typically followed by conditions such as capital injection, office lease and insurance.
- Launch the first fund. Prepare the offering documents, appoint the administrator, auditor and custodian, and file the fund notification or application.
Ongoing obligations and common mistakes
Once licensed, a manager carries continuing duties that regulators test through returns, thematic reviews and inspections. The core set is similar across the three regimes: maintain regulatory capital and professional indemnity cover; keep client money and assets segregated, with an independent custodian where the rules require one; value fund assets under a documented policy, with independent review of hard-to-value positions; report to investors and the regulator on time; and notify the regulator of changes in controllers, key individuals or business plan.
Firms that build these into a compliance monitoring plan from day one rarely struggle at their first inspection.
The recurring mistakes in asset management in the UAE are set out below.
Treating a family office as automatically unregulated
A single family office managing only one family's wealth generally falls outside fund management rules, and both the DIFC and ADGM have dedicated family office regimes. The position changes when the office starts to manage money for other families, friends or business partners, charges fees or pools capital in a vehicle open to outsiders. At that point it may be managing a collective investment fund or providing discretionary management that needs a licence. Families expanding their mandates should review the structure before taking in outside money. Our family offices page explains the boundary.
Under-resourcing compliance and AML
Regulators expect asset managers to run a genuine compliance function proportionate to the business, not a policy pack bought off the shelf. That includes client categorisation, suitability where relevant, conflicts management, personal account dealing and a full anti-money laundering programme with customer due diligence, sanctions screening and suspicious transaction reporting. Thematic reviews and enforcement in the free zones often focus on AML failings at smaller firms. Our AML compliance practice helps managers build programmes that survive inspection.
Outsourcing without oversight
Most new managers outsource fund administration, IT, compliance support or even portfolio management to group companies or third parties. Outsourcing is permitted, but the regulated firm remains responsible. Regulators expect due diligence on the provider, a written agreement with audit and access rights, exit plans and ongoing monitoring. ADGM's new rules also restrict host-manager models for foreign managers. Map every outsourced function and document oversight. See our financial services outsourcing page.
Ignoring corporate tax at fund and manager level
The manager is subject to UAE corporate tax at 9% on taxable income above AED 375,000 unless it qualifies for free zone relief on qualifying income. Funds themselves can apply for exemption as Qualifying Investment Funds if they meet the conditions, and limited partnerships can be treated as tax transparent in defined cases. Management fees, carried interest and intra-group arrangements need transfer pricing support. Model the position with the Federal Tax Authority guidance before launch, not when the first return falls due. Our corporate tax page has more.
Missing the transition deadlines
Three regimes are in motion at once. Onshore firms must regularise their status under the Capital Market Law within the transition period that began on 1 January 2026. Foreign Fund Managers in ADGM have until 31 March 2027 to meet the new requirements. DIFC managers using the External Fund Manager route face a proposed abolition. Each change can require new appointments, new documents or a new licence. Put every deadline in a regulatory calendar with a named owner.
Cross-border asset management
Asset management in the UAE is international by design: capital comes from the Gulf, Asia and Europe, and is invested worldwide.
United Kingdom and Europe. UK and EU managers often set up a DIFC or ADGM entity as a regional distribution or sub-advisory office. Delegation arrangements must satisfy both home and host regulators, and AIFMD or UK marketing rules continue to govern the home fund.
Singapore and China. Singapore managers use the UAE to reach Gulf investors and often run parallel Variable Capital Company and DIFC or ADGM structures. Chinese managers have expanded into ADGM and the DIFC; their home-country outbound rules affect how capital moves between the platforms.
India and Bangladesh. Indian managers use the UAE to serve non-resident Indian wealth and to access Gulf institutional capital, sometimes alongside GIFT City structures. Bangladeshi investors in UAE funds need to consider home-country foreign exchange restrictions on outward investment.
Saudi Arabia and the GCC. UAE managers frequently raise from Saudi investors and need to comply with Saudi private placement rules. A GCC fund passporting framework has been approved in principle, but managers should not assume it is available for a given fund until implementing steps are complete.
How TRW & Co supports asset management in the UAE
We advise new and established managers, family offices and institutional investors on asset management in the UAE and its links with Bangladesh, the UK, Singapore and China. Where representation before UAE onshore courts or the DIFC/ADGM Courts is required, we work alongside locally licensed advocates and registered practitioners.
Jurisdiction and licence strategy
We compare onshore, DIFC and ADGM options against your strategy, investor base and budget, and recommend the licence category, including the new ADGM manager categories.
Licence applications
We prepare business plans, policies and application packs, and manage regulator questions through to final approval and conditions.
Fund formation
We structure and document Exempt Funds, Qualified Investor Funds, onshore private funds, feeder vehicles and co-investment and employee investment vehicles.
Distribution and marketing
We design distribution plans across passporting, local promoters and free zone permissions, and review offering and marketing materials.
Compliance and transition
We build compliance and AML frameworks, outsourcing agreements and a regulatory calendar for the 2026 to 2027 transition deadlines.
Investigations and disputes
We help managers respond to regulator inquiries and investor complaints and coordinate strategy in disputes. See our regulatory investigations page.
Checklist for managers and boards
- Have we chosen the regime and licence category that fits our strategy, assets and investor base?
- If we are in ADGM, do we qualify for the Sub-Threshold or Institutional Fund Manager categories, and is there headroom for growth?
- If we rely on the DIFC External Fund Manager regime, what is our plan if it is abolished?
- Have onshore activities been regularised under the Capital Market Law within the transition period?
- Do we have a lawful distribution route for every investor location: passport, local promoter, free zone permission or evidenced reverse solicitation?
- Are compliance, AML, valuation and outsourcing arrangements documented and genuinely operating?
- Have we modelled corporate tax for the manager and checked whether funds qualify for exemption?
- Is there a regulatory calendar with named owners for each deadline?
To discuss a licence, fund launch or transition plan, contact TRW & Co, or explore all of our practices.
Frequently asked questions
01Which regulator licenses asset managers in the UAE?
It depends on where the manager operates. Onshore managers are licensed by the Capital Market Authority, which replaced the Securities and Commodities Authority on 1 January 2026. Managers in the Dubai International Financial Centre are authorised by the DFSA, and those in Abu Dhabi Global Market by the FSRA. Banks and insurers offering investment services may also be within Central Bank supervision. Marketing to investors in another perimeter needs its own route, such as passporting or a local promoter.
02What is the ADGM Sub-Threshold Fund Manager category?
Introduced with effect from 16 September 2026, it is a lighter licence category for managers of closed-ended funds that are not open to retail investors, with aggregate committed capital up to US$200 million. It carries a base capital requirement of US$50,000 and removes the need for an internal audit function and a dedicated finance officer, though professional indemnity insurance still applies. Venture capital fund managers are a sub-category. Managers must vary their permission before exceeding the cap.
03Can a DIFC fund be sold to investors in mainland Dubai?
Yes, through the UAE fund passporting arrangements or a local promoter. A qualifying DIFC or ADGM fund can be registered for onshore promotion through its home regulator, with the onshore regulator confirming registration; retail marketing requires an onshore-regulated custodian. Alternatively, the fund can be promoted to professional investors through a licensed local promoter. Simply marketing from the DIFC to onshore residents without either route risks breaching the Capital Market Law.
04Is the DIFC External Fund Manager regime being abolished?
It has been proposed. DFSA Consultation Paper No. 173, published in July 2026, proposes abolishing the External Fund Manager regime with a short transition period. The consultation closed on 7 September 2026, and final rules had not been published when this page was last reviewed. Managers currently relying on the regime should assess whether to obtain a DFSA licence, move the fund to a DIFC-licensed manager or restructure, and should watch for the DFSA feedback statement.
05Do UAE investment funds pay corporate tax?
A fund can apply to be exempt from corporate tax as a Qualifying Investment Fund if it meets the statutory conditions, which include regulation and diversity of ownership requirements. The manager itself is generally taxable at 9% on taxable income above AED 375,000, unless free zone relief applies to qualifying income. Limited partnerships may be treated as transparent in defined cases. Because conditions are detailed, each fund and manager should be checked against Federal Tax Authority guidance before launch.
06What happens to onshore managers licensed by the old SCA?
Their licences continue, but they must regularise their status under the new Capital Market Law within one year of 1 January 2026, which the CMA may extend. SCA decisions, including the 2023 investment fund regulations, remain in force as long as they do not conflict with the new laws and until replaced. In practice, managers should review licence scope, governance and policies against the new law and monitor CMA resolutions as they are issued during the transition.
Sources and official materials
- Capital Market Authority — Onshore licensing of fund and portfolio managers
- Federal Decree-Law No. 33 of 2025 on the Regulation of the Capital Market — Regulated activities, transition and penalties
- DFSA: Collective Investment Funds — DIFC fund types, minimums and fund manager categories
- ADGM Financial Services Regulatory Authority — Authorisation of ADGM fund managers
- ADGM Rules and Regulations — FSMR and FSRA rulebooks, including funds
- Federal Tax Authority — Corporate tax, Qualifying Investment Funds and free zone rules
General information only, current as at 27 October 2026. It is not legal advice and does not create a lawyer–client relationship. UAE law differs between the onshore jurisdiction, the DIFC, ADGM and the free zones, and changes frequently; check current official sources and take advice on the facts of your matter.
