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The new DIFC Venture Capital Fund Regime – launch your fund with 10 Leaves!

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This episode is also available as a blog post: https://10leaves.ae/publications/difc/new-difc-venture-capital-funds-regime

The DIFC has implemented a path-breaking VC Fund Manager Regime, that promises to add to the current startup ecosystem being built through the DIFC Fintech Hive and the DIFC Innovation Hub. The regime is a carve-out of the already fast-tracked Restricted Fund Manager regime, that is in place for entities that wish to only manage private funds

Definition of a VC Fund as per the DIFC:

A VC fund would have to:

  1. Be an Exempt Fund or a Qualified Investor Fund, open to Professional Clients only;
  2. Be a closed-ended fund;
  3. Invest at least 90% of it’s committed capital in unlisted businesses, which are not more than 10 years old; and
  4. Fund the underlying ventures through equity instruments only

    5. VC funds are usually closed-ended, for a fixed tenure and can be structured as Closed-ended Investment Companies or Partnerships.

    Other benefits:

    In addition to the above, the DFSA:

    1. Allows self-custody of fund property;

    2. Makes the appointment of an investment committee optional;

    3. Allows VC funds to invest more than 25% in a single undertaking;

    4. Makes internal audit of the fund manager optional;

    5. Removes the requirement for a Finance Officer;

    6. Removes the requirement for appointment of a Compliance Officer until initial commitments of capital are required; and

    7. Apply simpler capital requirements

    ...more
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