The Dubai International Financial Center (DIFC) issued a consultation paper proposing new variable capital company (VCC) regulations, aimed at providing a flexible legal structure for proprietary investment vehicles, according to a statement. The consultation is open for public commentary until 24 July 2025.

What’s the pitch? The proposed framework would allow a VCC to be set up either as a standalone entity or as an umbrella structure with incorporated or segregated sub-funds. Authorization from the Dubai Financial Services Authority would only be required if the VCC engages in regulated financial services.

SOUND SMART- VCC regulations are already in place in Singapore and Malaysia, where they offer investment funds and family offices greater flexibility in managing capital and several investment strategies under one umbrella. The key point is the ability to ringfence assets and cell shares, allowing shareholders to more easily issue and redeem share capital, and move funds in and out without impacting the holding company or having to revert to the firm’s shareholders. This would also support distinct risk-return profiles and facilitate centralized management.

The regime also allows dividends to be paid out of share capital, not just the firm’s net income, provided the net asset value of the VCC or the relevant cell supports it.

Who benefits: The regime is intended for users such as family-owned businesses, multi-asset holding platforms, and proprietary investment portfolios that require capital flexibility and legal separation within a unified structure, DIFC said.

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