The Dubai International Financial Centre (DIFC) has announced its intention to enact new Variable Capital Company (VCC) Regulations aimed at enhancing investment structuring and asset management options for proprietary investments within the DIFC. This initiative positions the DIFC as a leading financial hub in the Middle East, Africa, and South Asia (MEASA) region.

Jacques Visser, Chief Legal Officer at DIFC Authority, expressed his satisfaction with the announcement of the public consultation for the new regulations. He stated that the proposed regime offers a unique vehicle that provides flexible share capital structuring specifically designed for proprietary investment activities.

The proposed VCC framework aims to facilitate proprietary investment without the need for Dubai Financial Services Authority (DFSA) authorization or a regulated fund manager, unless the vehicle engages in regulated financial services. This flexibility makes the VCC an efficient option for investors looking to benefit from collective investment activities or segregated investment strategies while reducing procedural requirements for managing share capital.

Key features of the proposed VCC Regulations are significant. A VCC can be established as a standalone company or as an umbrella structure with incorporated or segregated cells. The share capital of a VCC is equal to its net asset value, which allows for flexible issuance and redemption of shares, enabling efficient management of capital inflows and outflows. Additionally, a VCC is not limited to paying dividends from its profits; it can make distributions from capital based on its net asset value.

The VCC also enables the segregation of assets and investment strategies through incorporated or segregated cells, thus accommodating different risk profiles while providing economies of scale through centralized management. This model is particularly beneficial for family-owned businesses, high-value multi-asset holdings, and complex proprietary investment portfolios seeking consolidated management and flexible structuring options.

The proposed regulations are currently open for a 30-day public consultation, with comments due by July 24, 2025. Further details can be found in Consultation Paper No. 2 of 2025 available on the DIFC website.

About the Dubai International Financial Centre: The DIFC is one of the world’s most advanced financial centers and serves as the leading financial hub for the MEASA region, which includes 77 countries and a population of approximately 3.7 billion. The Centre has been instrumental in facilitating trade and investment flows across these regions for over 20 years, connecting them with economies in Asia, Europe, and the Americas.

The DIFC boasts an independent regulatory framework and a proven judicial system based on English common law. With over 46 000 professionals working in more than 6 900 active registered companies, it is the largest and most diverse financial ecosystem in the region. The Centre’s vision emphasizes driving the future of finance through technology, innovation, and partnerships, making it a sought-after destination for business and lifestyle in Dubai.