US Investment Funds: Why They Benefit UAE Investors

In the modern world, investment funds have become a key tool for business development. They allow you to accumulate capital, spread risk, support startups, and scale successful projects. If you're an investor from the United Arab Emirates, you may have wondered whether to open a fund at home or in the US. The answer is obvious: the US offers speed, flexibility, international trust, and tax advantages that are difficult to obtain in the UAE.

How the UAE Fund System Works

The UAE has three main jurisdictions for establishing funds. DIFC is a special economic zone in Dubai overseen by the DFSA; ADGM is a financial zone in Abu Dhabi overseen by the FSRA; and Onshore (SCA) covers the federal level of regulation of the domestic market.

The process of establishing a fund in the UAE is complex and multi-step. First, you need to register a legal entity, obtain a fund and management company license, complete AML/KYC compliance, prepare a business plan and financial model, engage an auditor, depository, and administrator, and then obtain regulatory approval.

The process typically takes six to ten months. Furthermore, regulators impose strict requirements on personnel and internal procedures, which often makes it difficult for new or foreign investors to enter the market.

Because of these barriers, more and more UAE investors are choosing an alternative – establishing a fund in the US, where the process is faster and more flexible.

Why do UAE investors choose the US?

The advantages of the American jurisdiction are difficult to overstate:

1. Speed ​​and ease of launch.
   In the US, a fund can be registered in just 2-3 months, especially in the states of Delaware or Wyoming. The procedure is primarily online; the physical presence of the founders is not required. By comparison, in the UAE, the process takes 6-10 months.
2. Flexible legal structures.
   You can choose an LLC, LP, or SPV depending on the fund type: venture capital, private equity, hedge fund, or family office. In the US, it is easy to customize the internal structure to suit the business goals and needs of investors, whereas in the UAE, corporate models are significantly limited by regulatory requirements.
3. Reputation and trust.
   American funds are subject to the oversight of the SEC, one of the most respected regulators in the world. This automatically increases the trust of foreign partners and investors. In the UAE, a fund's reputation is largely limited to the local market.
4. Tax advantages.
   Many US funds operate on a pass-through taxation principle, meaning taxes are paid only at the owner level, not the fund itself. This is advantageous for UAE investors, as the country has a 0% personal income tax rate. Thus, profits remain virtually tax-free.
5. Access to global capital.
   Most international venture capital and private equity investors prefer funds with US jurisdiction. This opens the door to partnerships, international exchanges, and large investor networks, while access to these funds is limited in the DIFC or ADGM.

Additional advantages of US funds

• Flexible corporate governance. US law allows for independent development of internal policies, profit distribution procedures, and partner roles.
• Legal security. US courts have established practices for resolving investment disputes, ensuring predictability and stability.
• International recognition. US funds easily open bank accounts, partner with Big Four companies, and attract external capital.
• Zoom convenience. Funds can expand or transition to SEC regulation without complex procedures, something difficult to achieve in the UAE.

Antwort Law provides full legal support to UAE investors:

• analyzes business objectives and selects the optimal fund structure;
• prepares all documents and investment agreements;
• supports SEC registration and tax planning;
• provides legal support for attracting investors and fund management.

Our clients have already opened funds in the US and quickly attracted investors from Europe and the US, reducing the launch time by 4-5 times compared to the UAE. Create your investment fund in the US and gain access to the global capital market quickly, legally, and with maximum profitability.

Diana Gulevskaya

Head of Office in UAE
Antwort Law