DIFC’s proposed flexible VCC framework

The Dubai International Financial Centre has launched a consultation on the variable capital company regime, a move that could significantly expand the emirate’s investment structuring toolkit.

Inspired by Singapore’s successful VCC model, this framework could strengthen DIFC’s competitive position as a jurisdiction for cross-border funds and innovative investment platforms.

What is a VCC? 

A variable capital company (VCC) is an investment vehicle with the flexibility to vary share capital without shareholder approval, allowing for efficient issuance and redemption of shares. The Dubai International Financial Centre (DIFC)’s proposal includes segregated or incorporated cells within a single VCC structures that ring-fence assets and liabilities between sub-funds. 

This approach offers operational and legal separation for multiple investment strategies under a single legal entity, enabling cost savings and streamlined governance while maintaining investor protection. 

Why the VCC framework updates matter 

For fund managers, family offices and institutional investors, the VCC framework could: 

• allow multiple strategies and asset classes to be housed efficiently in one structure
• enhance confidentiality by avoiding public disclosure of sub-fund details
• reduce the administrative burden associated with launching separate entities
• offer a familiar global standard, given parallels to Singapore and certain offshore cell company regimes 

Opportunities for DIFC 

By adopting a VCC regime, DIFC could attract: 

• managers seeking an onshore hub with offshore flexibility
• international funds looking for a Middle East base to tap GCC and Asian capital flows
• wealth managers serving multi-jurisdictional families who value ring-fenced structuring

The consultation suggests alignment with global AML, governance and regulatory standards, positioning DIFC VCCs for cross-border recognition. 

Ogier Global’s perspective 

From our Dubai office, we see the proposed DIFC VCC regime as: 

• a complement to existing offshore structures in Guernsey, Jersey and the Cayman Islands, giving managers more choice in matching jurisdiction to investor base
• a competitive alternative for managers currently using SPCs or PCCs in other financial centres, especially where proximity to MENA investors is key
• a catalyst for fund governance innovation, VCCs will need robust administration, compliance and risk frameworks

We will be watching closely as the consultation progresses, particularly around regulatory oversight, capital maintenance rules and tax treatment.

For more information, contact Daniel Pacic or Praveer Pinto.

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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