DIFC Proposes New Variable Capital Company Regulations to Boost Investment Flexibility
The Dubai International Financial Centre (DIFC) has launched a public consultation on its proposed Variable Capital Company (VCC) Regulations, aimed at enhancing investment structuring and asset management options for proprietary investors.
Key Highlights of the Proposal
The new VCC framework will offer a flexible, efficient vehicle for investors, with features including:
- Flexible Structure: Can operate as a standalone company or an umbrella entity with segregated or incorporated cells.
- Dynamic Share Capital: Share capital adjusts to net asset value (NAV), simplifying share issuance and redemptions.
- Capital Distributions: Allows payouts from capital (not just profits), based on NAV.
- Asset Segregation: Enables risk separation across different cells while maintaining centralized management.
Who Benefits?
The VCC model is tailored for:
- Family businesses
- High-net-worth investors
- Complex investment portfolios (e.g., secondary structures)
Jacques Visser, DIFC Chief Legal Officer, stated: “This regime provides a unique, flexible solution for proprietary investments, reducing procedural burdens while maintaining robust structuring options.”
