Dubai continues to solidify its reputation as a global investment hub, drawing in entrepreneurs, institutional investors, and financial experts from around the world. With the UAE’s business-friendly policies, tax benefits, and robust legal framework, starting a private equity firm in Dubai in 2025 is not just a promising venture but it’s a strategic opportunity. Whether you’re an experienced investor or a new entrant into the private capital space, this guide will walk you through the steps, requirements, and key considerations for launching your private equity (PE) firm in the UAE.
What Is a Private Equity Firm?
A private equity firm is an investment management company that provides financial backing and makes investments in private companies or conducts buyouts of public companies, resulting in the delisting of public equity. Unlike hedge funds, PE firms typically hold their investments longer and aim for strategic growth or restructuring.
Why Start a Private Equity Firm in Dubai?
1. Strategic Location
Dubai’s geographic position connects Asia, Europe, and Africa. It serves as a natural investment gateway to emerging markets.
2. Business-Friendly Regulatory Environment
The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) offer world-class financial regulations aligned with global standards, including 100% foreign ownership and 0% personal income tax.
3. Investor Confidence and Infrastructure
Dubai offers a stable political and economic environment, strong legal protections, and a sophisticated financial infrastructure—ideal for private equity operations.
4. Access to High-Net-Worth Individuals (HNWIs) and Institutional Investors
Dubai is home to thousands of family offices, venture capital firms, and sovereign wealth funds—creating a deep pool of co-investors and limited partners (LPs).
Step-by-Step Guide to Setting Up a Private Equity Firm in Dubai in 2025
Step 1: Define Your Business Model
Before any legal setup, clarify your firm’s scope and model:
- Will you focus on buyouts, growth capital, or venture capital?
- What geographies and sectors will you target?
- Who are your target investors (family offices, institutional investors, HNWIs)?
- What’s your fund size and average deal ticket?
This strategic clarity helps during licensing and when approaching regulators or investors.
Step 2: Choose the Right Jurisdiction
In the UAE, private equity firms typically choose between:
- Dubai International Financial Centre (DIFC)
- Abu Dhabi Global Market (ADGM)
These are internationally recognized financial free zones offering:
- 100% foreign ownership
- Independent English common law-based legal systems
- Full repatriation of profits and capital
- No currency restrictions
- Robust data protection laws
Most PE firms in Dubai operate under the DIFC due to its established ecosystem of fund managers, advisory firms, and legal experts.
Step 3: Apply for Regulatory Approval
If setting up in the DIFC, you’ll need to register with the Dubai Financial Services Authority (DFSA) as a Fund Manager or Asset Manager.
Requirements include:
- A detailed business plan
- Capital adequacy (usually starting from USD 500,000 or equivalent in AED)
- A well-qualified management team with relevant financial experience
- Compliance and risk management policies
AB Capital can help you prepare and submit your DFSA application, including organizing your internal controls, KYC/AML processes, and governance framework.
Step 4: Establish the Legal Entity
Once licensed, you’ll register your company with the Registrar of Companies (ROC) under DIFC or ADGM as one of the following:
- Private Company Limited by Shares (Ltd.)
- General Partnership or Limited Partnership (for fund structuring)
Your firm will need a:
- Registered office in Dubai
- Local bank account
- Auditor and legal counsel appointed
Step 5: Structure Your Fund
A private equity firm typically raises capital through a Limited Partnership (LP) structure, where the PE firm is the General Partner (GP) and the investors are Limited Partners.
In Dubai, you can set up a fund under the DIFC Collective Investment Scheme with the following options:
- Exempt Fund (for qualified investors, fewer than 100 LPs)
- Qualified Investor Fund (QIF)
- Public Fund (rare for PE)
Ensure your Fund Offering Memorandum (FOM) is clear about your investment strategy, fees, lock-in period, exit strategy, and risk factors.
Step 6: Fundraising and Capital Deployment
With your fund established, you can now begin:
- Marketing to qualified investors (within regulatory limits)
- Conducting due diligence on portfolio companies
- Negotiating and closing deals
- Driving value creation post-investment (operational improvements, scaling, governance support)
- Planning exit strategies (IPO, M&A, secondary sale)
Key Legal and Regulatory Considerations
- Know Your Customer (KYC) / Anti-Money Laundering (AML) compliance is mandatory.
- You must appoint a Money Laundering Reporting Officer (MLRO) and maintain proper documentation.
- Ongoing DFSA audits and reporting are required.
- Corporate tax (9%) may apply starting June 2023, but funds and regulated entities may qualify for exemptions, depending on structure and activity.
Costs Involved in Starting a Private Equity Firm in Dubai
While costs vary, here’s a general breakdown:
| Item | Estimated Cost (USD) |
| DIFC License & Registration Fees | $15,000 – $25,000 |
| DFSA Application & Capital Requirements | $500,000+ (minimum capital) |
| Legal & Compliance Setup | $20,000 – $40,000 |
| Office Space & Operational Costs | $30,000+ annually |
Note: These are indicative estimates. AB Capital can provide accurate cost planning tailored to your specific needs.
How AB Capital Can Help?
Starting a private equity firm in Dubai involves multiple layers of legal, financial, and regulatory processes. AB Capital Services specializes in assisting fund managers and financial professionals in:
- Choosing the best jurisdiction
- Navigating DFSA and DIFC compliance
- Structuring your legal entity and fund
- Managing your licensing and documentation
- Providing local support for operations, staffing, and audits
With years of experience and a dedicated financial services team, The team of AB Capital is your trusted partner in launching a successful PE firm in the UAE.
Final Thoughts
With strong infrastructure, international credibility, and a forward-thinking regulatory environment, Dubai is one of the best places to start a private equity firm in 2025. Whether you’re an established fund manager or building your first fund, proper setup is key to long-term success.
Partner with AB Capital Services to make your entry into Dubai’s private equity landscape smooth, compliant, and future-ready.
