Arendt & Medernach

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Categories:Funds,Middle East

Passporting Islamic funds: a path for growth

By Bishir Shiblaq and Florence Stainier

Choosing the domicile of an investment fund is not an easy task. A fund promoter has to consider many aspects, in particular the available vehicles, investment strategies and the reputation of the domicile. One of the key concerns remains, however, the possibility to distribute the fund in multiple jurisdictions.

Investment funds in the Middle East, whether conventional or Islamic, currently face distribution constraints, since there are no arrangements for mutual recognition in place that permit funds that have been authorised in one country to be distributed in another country without complying with the full range of the host country’s approval requirements.

Instead of introducing measures to harmonise the legal frameworks, we have seen more regulation recently, in particular in the GCC countries, making cross-border distribution increasingly difficult. In the case of the UAE, for example, investment funds established in the Dubai International Financial Centre (DIFC) are considered to be foreign funds…

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