Investment Manager Exemption

#Understanding the Investment Manager Exemption in the UAE Corporate Tax Law

"This is applicable to investment managers providing discretionary services to foreign investors and entities."

the Investment Manager Exemption prevents a foreign person from being considered as having a Permanent Establishment in the UAE due to engaging a UAE-based entity providing investment management or brokerage services.

To QuAlify for the exemption following condition must be met

Condition 1

Regulatory Oversight

Must have appropriately licensed and subject to the regulatory oversight of a competent authority in the UAE, such as the Securities and Commodities Authority, the ADGM Financial Services Regulatory Authority, or the DIFC Dubai Financial Services Authority.

Condition 2

Acting Independently

The Investment Manager must demonstrate that it acts in an independent capacity in relation to the transactions carried on for the foreign person.

Condition 3

Arm’s Length Remuneration

he Investment Manager’s remuneration structure must reflect arm’s length commercial terms.

Condition 4

Limited Scope:

The exemption does not extend to activities of the Investment Manager in relation to any other Business carried out by the foreign Person in the UAE

Condition 5

Ordinary Course of Business:

Transactions must be carried out in the ordinary course of the Investment Manager’s Business.

List of Qualifying Transaction

Qualifying transactions include transactions in commodities, real property, secured and unsecured debt obligations, warrants, foreign currency, futures, options, swaps and other derivatives or securities. The Investment Manager Exemption under Article 15 may also apply to transactions in carbon emission credits, crypto-assets and other investment transactions that are permitted to be carried out for and on behalf of a foreign or Non-Resident Person by the Investment Manager under the applicable legislation of the UAE.

Please note: This post is for informational purposes only. Consult with our qualified professional for specific guidance on your business transactions in the UAE.