VC Fund Formation in the UAE - A guide on terms and structures

Venture Capital is a relatively new term in the GCC region. While the past five years have seen accelerated progress, generally speaking, access to alternate sources of capital – be it angel, seed, VC or Private Equity, has proved to be more difficult than in more robust ecosystems such as Silicon Valley or Bengaluru.

Nevertheless, the region has seen an uptick in the number of deals that are being closed across the spectrum, and many players are now entering the smaller end of the market – the sub-US$ 5 million deals.

Taking note of this increased activity, the two financial free zones of the United Arab Emirates – the DIFC and the ADGM, have made carve-outs in their existing regulations to accommodate smaller VC players and give them access to a well-regulated ecosystem, at a lower entry price point.

We at 10 Leaves have been excited about these initiatives and have offered competitive advice and legal assistance to startup fund managers who wish to establish a presence in these financial centers.

And we have been at the forefront. The DIFC announced their VC Fund Manager regime in December, and we ended up assisting the first, second and third successful applicants, who went on to make their funds and are now in the process of raising capital.

We are currently advising many more, and we noticed a common thread. While our clients were well-versed at what they do, which is sourcing deals, operating in a well-regulated environment was a new feature. In fact, some of them had decades of experience working in large investment banks, however, they had never got down to managing a startup of their own.

Keeping the above in mind, we saw the need of coming out with a series of informative articles on the VC space in the region – how VC funds are structured, the economics of such funds, marketing and distribution, and the principal documents involved. The annexure also lists our podcast specials like “Terms every Venture Capital Fund Manager should know” and “A Guide to Venture Capital Financings”, besides links to detailed articles, podcasts and videos on setting up in the DIFC, ADGM and Luxembourg.

We believe that this is work in progress, and hence invite contributors to the initiative. The VC landscape is changing rapidly, and there are many technology-based products that are also getting added to the mix. They present an interesting proposition – leveraging the power of tech to assist VCs make more informed decisions, streamline their operational processes and bring more overall efficiency to exits.

If you come across such initiatives, or if you have a startup that spearheads such initiatives, then do write in, and let us know. We are at This email address is being protected from spambots. You need JavaScript enabled to view it..

And if you want to know how to start…well, you know just whom to call!

Rohit Ghai - Founder - 10 Leaves

Bishr Shiblaq - Partner - 10 Leaves

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PS: This report and it’s contents are not meant to be construed as legal advice. What we have attempted here, is to provide information, and while we have tried our best to add details that we believe are correct, we encourage you to get in touch with us for more updated, and relevant information.

The Venture Capital Series:

1. VC Funds – An Introduction.

2. What are Private Funds?

3. VC Fund structures in the UAE.

4. Lifecycle of a VC Fund.

5. The Economics of a VC Fund.

6. VC Fund marketing and distribution in UAE.

7. VC Fund setup - Documents required.

8. Launch your VC Fund with 10 Leaves.

Bonus material:

Terms every Venture Capital Fund Manager should know (Podcast)

A Guide to Venture Capital Financings (Podcast)

Pitchbook Blog – the data warehouse

Techmeme Blog – your source for what’s happening in tech

Techcrunch – another tech blog

Damodaran Online – a blog from the guru of valuation

The Termsheet

Data-Driven VCs – How 83 VCs use Data, AI and Proprietary Software to drive Alpha returns

The Team:

Rohit Ghai:

Rohit Ghai

Rohit’s background in business consultancy was key in his founding of 10 Leaves Limited, a niche consultancy with a focus on regulatory authorisations in the DIFC and the ADGM. He spun off three verticals from this business, including 10 Zone, a business consultancy that provides turnkey solutions to individuals and businesses seeking to setup a base in the UAE, tenl.io, a venture that bridges startups from the UAE to Luxembourg, Berlin, Riyadh and Bengaluru and Legability, a legal consultancy that specialises in corporate commercial work in the UAE and Luxembourg, including investment fund structuring and documentation.

Rohit has consulted on market entry strategies, management and fund structures in multiple jurisdictions worldwide, including onshore in the United Arab Emirates, free zones and offshore centres like the Cayman Islands and Mauritius. He has also consulted on establishing onshore regulated structures in the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), including credit provider, asset management, private banking, fund management, brokerage and investment advisor licenses. He also has extensive capabilities in Fintech, and currently also advises and project manages crowdfunding, robo-advisory and money service businesses that seek regulatory authorisations in the UAE.

Being an entrepreneur and investor himself, Rohit consults startups in the technology sector and acts as a director and mentor for early-stage entities.

His areas of professional expertise include:

Strategy.
Fund structuring.
Fintech.
Venture Capital.
Business consultancy.
Business Operations & Management .
Market Entry Strategies .
Digital Transformation.

Bishr Shiblaq:

Bishr established and headed the MENA office of the leading Luxembourg law firm, Arendt & Medernach for around 10 years. In this capacity he advised leading financial institutions, sovereign wealth funds, asset managers, MNCs and family offices in both Europe and the Middle East on all issues relating to the structuring of international transactions and the setting-up of regulated or unregulated investment structures. Bishr also specialises in finance-related matters, in particular structured finance, securitisations, asset finance, Islamic finance, as well as in private wealth.

Bishr has been recognised by MENA Fund Manager Magazine for six consecutive years as amongst the thirty most influential individuals providing services to the MENA funds industry and by Islamica500 for three consecutive time as amongst the fifty leading individuals in the Islamic economy.

He is a regular author on finance in various journals and other specialised publications and is regularly invited to speak on fund-related topics at conferences in Europe, the MENA region and Asia.

Before joining Arendt & Medernach in Luxembourg and establishing its Dubai Office in 2008, he worked for several years within the legal department of a leading research institution funded by the Federal Government of Germany.

Bishr holds a master’s degree in law from the University of Cologne (Germany), as well as a Master of Laws (LL.M.) in International Economic Law from the University of Warwick (UK).

He speaks English, German, French, Arabic, and Spanish.

Get in touch:

Authorisation enquiries – This email address is being protected from spambots. You need JavaScript enabled to view it.

Legal documentation – This email address is being protected from spambots. You need JavaScript enabled to view it.

Visit us at www.10leaves.ae , www.ability.legal

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