Investors who want to establish specific investment funds can get assistance from an asset management company (AMC) in Dubai. Even if a potential investor is confident in their choice of investment vehicle, it is a wise move to ask for the assistance of an asset management professional.
Typically, asset management companies collect and invest investor money in various assets, including stocks, shares, real estate, bonds, etc. Pension plans, mutual funds, hedge funds, and other forms of pooled investment structures are all managed by several asset management firms.
Additionally, a Dubai asset management firm should be prepared to interact with domestic and international investors.
There is a high demand for guidance in helping both local and foreign-owned enterprises to invest their assets for the highest return on investment now that Dubai has established itself as a premier business and economic hub.
WHY ESTABLISH AN ASSET MANAGEMENT COMPANY IN DUBAI?
A lot of it depends on where you are. Dubai and the United Arab Emirates, in general, are well known for being top travel and business destinations. It also makes sense to take advantage of the chance to establish a company in Dubai because so many businesses, entrepreneurs, and foreign investors are establishing roots there. Many companies in and around Dubai could profit from the services of an asset management specialist. All businesses need financial investment advice and direction.
Asset Management activities include –
- Managing Assets – When referring to assets that belong to another person and include investments or rights under a long-term insurance contract that is not a reinsurance contract, the term “managing assets” refers to managing those assets on a discretionary basis.
- Organizing Investment Deals – Making arrangements with the intention of another Person purchasing, selling, subscribing for, or underwriting an Investment (regardless of whether that other Person is acting as principal or agent) is known as arranging deals in investments.
- Providing Financial Product Advice – Advising someone on the benefits of purchasing, selling, keeping, subscribing to, or financing a particular financial product (whether as principal or agent) is referred to as providing financial product advice in their capacity as investors or potential investors, or in their capacity as agents for investors or potential investors.
- Organizing credit and providing credit advice includes – (a) arranging for another Person to borrow money under a Credit Facility, whether as principal or agent; or
(b) advising a Person on the benefits of entering into a specific Credit facility in his capacity as a borrower or future borrower or as an agent for a borrower or potential borrower.
THE POPULAR FAMILY OFFICE APPROACH
In recent years, the Family Office has become a more popular wealth management strategy in and around the UAE. Family offices are renowned for their expertise in wealth management for future generations.
A family office is a type of consulting firm that provides particular strategies for long-term wealth management for an individual or family. A professional organization of this kind is often established to assist in managing assets for the benefit and protection of a family and future generations. A Family Office may fall into one of the following two categories:
- Single Family Office (SFO) – A single family with substantial wealth should have its asset management priorities met by a single-family office. The SFO is brought in to assist with managing tasks like payroll, property management, legal financial considerations, continuous bookkeeping requirements, etc.
- Multi-Family Office (MFO) – A multifamily office adopts a more comprehensive strategy. The MFO provides both customized solutions and quick response in order to assist two or more families in managing their combined wealth and assets.
It provides support for individual or collective family clients and helps in keeping track of everyday family expenses and improves long-term management of the finances of a single family or several joined families.
MFO provides families with a higher level of privacy and secrecy regarding their individual asset resources and families value having a specific manager in charge of looking after their own wealth, assets, and investment concerns.
BUILDING AN INVESTMENT PORTFOLIO
The success of an asset management business depends heavily on the expertise as a seasoned investment fund manager. If you want to start a business in Dubai, it would be a good idea to start by applying the knowledge and strategies to build a strong investment portfolio that potential customers may look at.
A diversified portfolio’s basis should consist of items like knowledge of capital markets, risk analysis, financial security, a range of investment possibilities, and similar things. Many other fund types, such as mutual funds, index funds, exchange-traded funds, and others, can be managed by the majority of qualified financial professionals.
HOW TO REGISTER AN ASSET MANAGEMENT COMPANY IN DUBAI
Due to the widespread use of this type of corporate structure, an asset management company in Dubai can be founded in accordance with the limited liability company’s requirements. The Articles of Association form the foundation of asset management businesses’ incorporation in Dubai as they describe the owners, activities, managers, general guidelines, voting rights, and other information.
If you wish to know more about the process of opening an Asset Management Company in Dubai, refer to our Dubai Company Incorporation page.
An asset management Company should make the following appointments
- Board of Directors – A strong board with a diverse range of members and independent directors. A non-executive director would have to serve as the chair.
- Senior Executive Officer (SEO) – A senior banking professional with more than 10 to 15 years of expertise who often resides in the United Arab Emirates.
- Finance Officer (FO) – A senior finance professional with the necessary qualifications. If a group is involved, the FO can come from the parent firm and does not have to be a UAE resident. It’s also possible to hire someone to carry out this job.
- Risk Officer – A senior risk professional who, in the event of a group, may come from the parent corporation.
- Compliance Officer (CO) – Senior compliance specialist with over 10 years of experience, usually living in the UAE.
- Money-Laundering Reporting Officer – Senior AML expert with more than 10 years of expertise, usually based in the UAE. This task can be paired with Compliance, and one person can handle both duties. In some situations, the CO and MLRO responsibilities might also be outsourced.
- Internal and External Auditor – Senior internal auditor with the necessary qualifications. often outsourced to a professional company. An external auditor usually is a senior and suitable external auditing firm.
DIFC ASSET MANAGER LICENSE
Asset management companies are eligible to apply for a Cat 3C License from the DFSA. Asset management here refers to the independent, client-mandated management of client portfolios.
Firms must apply to the Dubai Financial Services Authority, or DFSA, if they want to manage client assets from the DIFC.
ADVANTAGES OF OPENING AN ASSET MANAGEMENT COMPANY IN DUBAI
- A reputable asset management firm has the specific expertise and experience necessary to efficiently manage and enhance the health and longevity of a company’s assets. They have the abilities to assess, appraise, and maximize investments in order to maximize profits.
- Compared to keeping an internal team, outsourcing asset management to a professional company may be more affordable. With the help of an asset management business, hiring and training staff, purchasing hardware and software, and ongoing operational costs can all be significantly decreased.
- The business can reduce potential liability risks by handing asset management to a reputable service. Asset management firms have a fiduciary duty to operate in their client’s best interests, which helps safeguard the business’s investments and lowers the possibility of errors or misconduct.
- An asset management firm with local connections in Dubai is aware of the state and federal laws that govern investment-related activities. They can make sure that the investment plans comply with the law, protecting the business from potential problems or fines.
- Working with an asset management business with a solid reputation might help the company’s reputation in general. The staff, clients, and stakeholders will feel more confident and credible as a result of the company’s connection with a reliable and knowledgeable company.
Contact us at Relin Consultants for our services and assistance in opening an Asset Management Company in Dubai.
What legal conditions must be met in order to establish an asset management business in Dubai?
If you intend to operate in the Dubai International Financial Centre (DIFC), you will normally need to adhere to the legal and regulatory criteria established by the Dubai Financial Services Authority (DFSA) in order to establish an asset management firm in Dubai. The requirements could include getting the required permits, having adequate funding, and satisfying particular operational standards.
Do asset management companies have any restrictions on foreign ownership or investment?
The laws in Dubai governing foreign ownership and investment vary by jurisdiction. Foreign ownership and investment in asset management firms are both permitted in the DIFC with no limits.
How can I be sure that my asset management business in Dubai complies with all regulations?
Staying current with the most recent regulations and instructions issued by the relevant regulatory agencies is essential for ensuring regulatory compliance. Maintaining compliance can be simplified by establishing strong internal policies, processes, and controls, as well as by performing routine audits and evaluations. Engaging legal and compliance professionals like Relin Consultants who are familiar with the regional regulatory environment is also advantageous.
Is a physical presence in Dubai necessary?
Depending on your business strategy and the country in which you operate, you may need a physical presence. You’ll probably need an office space in the DIFC if you decide to start your business there. The requirements might change outside the DIFC, and some activities might call for personal presence.