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The UAE has emerged as one of the leading jurisdictions for fund establishment, fund management and capital raising across the Middle East, Africa and South Asia corridor. Its attractiveness lies in a combination of legal certainty, internationally recognised regulatory frameworks, access to sophisticated pools of private and institutional capital and the availability of multiple structuring options depending on the investor base, investment strategy and target markets. In practice, fund sponsors considering the UAE will typically assess three principal routes: the Dubai International Financial Centre (DIFC) regulated by the Dubai Financial Services Authority (DFSA); the Abu Dhabi Global Market (ADGM), regulated by the Financial Services Regulatory Authority (FSRA); and the onshore UAE regime, regulated by the Capital Market Authority (CMA).
What does it cover – This article provides a brief overview of the UAE fund management framework and a comparative snapshot against GIFT City as an emerging international funds platform.
The UAE’s growing relevance is also reflected in recent market developments as we have covered below. Both the DIFC and ADGM have reported significant increases in assets under management and continued expansion of their asset management ecosystems.
ADGM – In ADGM, by the end of 2025, the number of asset and fund managers had increased to 171, collectively managing 244 funds, while assets under management rose by 36% year-on-year. Together, these figures underscore that the UAE is no longer merely a distribution market1.
DIFC – In DIFC, more than 500 wealth and asset management companies were operating at the end of 2025, including 102 hedge funds, with the centre also hosting 1,052 regulated firms overall2.
The UAE fund management framework
The UAE offers a multi-layered fund management framework through its two financial free zones the DIFC and ADGM as well as the onshore UAE regime regulated by the CMA. Together, these regimes provide fund managers with a range of structuring and licensing options depending on the nature of the proposed strategy, investor profile, target market and preferred operating base.
In broad terms, the DIFC and ADGM regimes are often the preferred routes for international and regional sponsors due to their common law-based frameworks, internationally familiar regulatory architecture and strong concentration of institutional investors, family offices and private capital. Both jurisdictions recognise differentiated fund categories, including retail/public funds and private fund structures intended for sophisticated or professional investors, thereby allowing managers to select a proportionate regulatory pathway depending on the offering model and investor base.
Alongside these free-zone regimes, the onshore UAE framework under the SCA remains an important part of the overall fund landscape, particularly where local market access, mainland distribution, mainland promotion or a broader domestic UAE investor strategy is relevant. As such, the UAE does not operate through a single uniform fund regime, rather, it offers a flexible regulatory ecosystem in which sponsors can choose the most appropriate platform based on commercial objectives, regulatory preference, and distribution strategy.
Overall, the UAE’s fund management landscape is attractive because it combines regulatory diversity with commercial depth.
Choosing the right fund category in the UAE
The principal structuring question in the UAE is usually not whether a fund can be established, but rather which category of fund is most appropriate. Where a fund manager is targeting sophisticated investors through private placement, a professional-investor fund category such as an Exempt Fund or Qualified Investment Fund (QIF) is usually the starting point. Where broader public distribution or retail participation is intended, the analysis may shift toward a Public Fund. This choice affects not only the level of regulatory scrutiny but also investor eligibility, subscription thresholds, offering mechanics, disclosure expectations, governance requirements and service provider arrangements.
As a commercial matter, the UAE regimes are well-suited to funds investing in listed and unlisted securities, private companies, real assets, private debt, venture opportunities or regionally anchored thematic strategies, provided that the fund category, liquidity profile, risk disclosures and investor eligibility requirements are aligned properly from the outset.
A brief overview of GIFT City funds
India’s GIFT City IFSC has emerged as a significant parallel platform for fund management and international financial services, similar to ADGM and DIFC, with its own distinct regulatory framework. It is regulated by the International Financial Services Centres Authority (IFSCA), which acts as a unified regulator for financial products, financial institutions, and financial services in the IFSC. The GIFT City fund framework is now governed by the IFSCA (Fund Management) Regulations, 2025, which establish a clear, activity-based framework for fund management in the IFSC, aligned with international standards, offering operational certainty and consistent regulatory oversight for global managers.
Under the IFSCA framework, fund management activity is undertaken through Fund Management Entities (FMEs). The regime is designed to accommodate a wide range of activities, including retail schemes, non-retail or alternative investment structures, portfolio management services, and related fund management functions.
This has made GIFT City increasingly relevant for Indian family offices seeking a regulated platform for expansion outside India. In practice, GIFT City can provide such families greater flexibility for pooling and deploying capital and a more coherent structure for regional and global investments. The explicit recognition of a Family Investment Fund under the IFSCA Fund Management Regulations, 2025 reinforces this positioning.
GIFT City is also becoming increasingly relevant for Indian groups and Indian-origin businesses with international operations or overseas expansion plans. This is not only because of the fund regime but also because the wider IFSC ecosystem supports treasury, financing and international
structuring functions. In particular, IFSCA’s framework for Global/Regional Corporate Treasury Centres indicates that GIFT City is being positioned not merely as a fund domicile, but as a broader international financial platform from which businesses may centralise treasury activities and support cross-border operations.
UAE funds and GIFT City funds: Comparative View
|
Parameter |
UAE (DIFC / ADGM / Onshore) |
GIFT City (IFSC) |
|
Regulatory architecture |
Multi-jurisdictional framework with DFSA, FSRA and CMA framework. This gives sponsors multiple entry points but also means the analysis must be jurisdiction specific. |
Unified framework under the IFSCA, which regulates fund management and related financial services in the IFSC. This is structurally simpler from a regulator-mapping perspective. |
|
Core regulatory model |
DIFC and ADGM both distinguish between public / retail-facing funds and private funds for sophisticated investors. In both DIFC and ADGM, the categories are Public Funds, Exempt Funds and QIFs. |
GIFT City is built around the registration of a FME under one of three categories: Authorised FME, Registered FME (Non-Retail) and Registered FME (Retail), and then launching different kinds of schemes. The 2025 regulations provide an FME based framework under which fund management may be carried out through Venture Capital Schemes, Restricted Schemes, Retail Schemes and Family Investment Funds, depending on the category of FME and the applicable investor base. |
|
Manager-level licensing / registration |
In both DIFC and ADGM, a fund in the DIFC must be managed by a DFSA-licensed Domestic Fund Manager or an External Fund Manager from an acceptable jurisdiction in the permitted cases. ADGM similarly permits ADGM fund managers and, in some cases, qualifying foreign fund managers. |
In GIFT City, a person cannot undertake fund management in the IFSC without obtaining certificate of registration from the Authority as a FME under the 2025 regulations. |
|
Investor segmentation |
DIFC and ADGM clearly distinguish between retail investors and professional/qualified investors. Exempt Funds and QIFs in DIFC and ADGM are limited to Professional Clients and are offered by way of private placement. |
GIFT City distinguishes between retail schemes and non-retail schemes. Non-retail sits mainly through venture capital schemes and restricted schemes. Retail schemes are separately regulated. |
|
Minimum investment thresholds |
In both DIFC and ADGM: Exempt Fund – USD 50,000 minimum subscription; and QIF – USD 500,000 minimum subscription. Public Funds generally do not use those thresholds in the same way. |
GIFT City thresholds vary by scheme. For Venture Capital Schemes, the regulations permit participation by accredited investors and by investors meeting the applicable minimum investment threshold. For employees, directors or designated partners of the FME, the regulations specify a minimum investment of USD 60,000 and where certain eligible persons invest jointly, the aggregate investment must be at least USD 250,000. For a Restricted Scheme, the minimum commitment for each scheme is USD 150,000 per investor, reduced to USD 40,000 for employees, directors, or designated partners of the FME. For retail schemes, the framework is naturally more open to a broader investor base. |
In substance, the UAE is often the stronger choice where the objective is to access Gulf capital, regional family offices, sovereign wealth and a wider Middle East institutional investor base through established international financial centres. GIFT City, by contrast, can be especially compelling where the strategy has a strong India nexus, where Indian promoters or family offices require an international platform for overseas deployment or where a global Indian business seeks to combine fund structuring, cross-border capital raising and treasury functionality within a unified IFSC ecosystem.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
