A Fund setup is a critical process for fund managers seeking to establish a robust presence in the global market. Choosing the right jurisdiction ensures compliance with international standards and regulations while providing access to a diverse investor base, including institutional investors and global investors. This guide focuses on four prominent fund jurisdictions: Luxembourg, Abu Dhabi Global Market (ADGM), Dubai International Financial Centre (DIFC), and Cyprus, each offering unique advantages for fund managers.
Luxembourg, ADGM, DIFC, and Cyprus
Institutional and retail investor base
Tax rates, setup times, and benefits
Each jurisdiction offers unique advantages for fund managers seeking global market presence
Leading European Fund Hub
A premier fund setup jurisdiction in Western Europe with highly developed financial sector and favorable tax regime.
Luxembourg’s stable, EU-based legal system and independent regulator ensure strong investor protection, attracting global investors.
With tax-efficient fund structures and full EU market access, Luxembourg’s multilingual, international environment supports cross-border investment.
Key Benefits:
Modern Financial Centre
Located in Dubai, the DIFC is a leading financial center for the Middle East, Africa, and South Asia, offering top-tier infrastructure and global fund manager support.
DIFC follows English common law and is regulated by the DFSA, ensuring investor protection and global compliance in a transparent legal framework.
DIFC offers 0% tax on profits, gains, and income for up to 50 years, with no withholding taxes—plus access to a broad investor base across MEASA.
Key Benefits:
Premier MENA Hub
Leading financial hub in Middle East, Africa, and South Asia with world-class infrastructure.
DIFC uses English common law and is regulated by the DFSA, ensuring transparency, investor protection, and international compliance.
With 0% tax on profits, gains, and income for up to 50 years—and no withholding taxes—DIFC offers fund managers access to diverse MEASA investors.
Key Benefits:
Emerging EU Jurisdiction
Strategic EU location with competitive regulatory and tax environment, serving as gateway to multiple regions.
Cyprus follows EU-aligned regulations under CySEC, ensuring transparency, investor protection, and sound fund governance.
With low taxes and EU market access, Cyprus also offers strategic connectivity to Europe, the Middle East, and North Africa.
Key Benefits:
Quick snapshot to help you choose the right jurisdiction for your fund
European Leader
Fastest Setup
MENA Access
European Leader
| Criteria | Luxembourg | ADGM | DIFC | Cyprus |
|---|---|---|---|---|
| Legal System | Civil law with EU alignment | English Common Law | English Common Law | English Common Law |
| Tax Rate | 0% on capital gains, exemptions available | 0% corporate & income tax (50 years) | 0% corporate & income tax (50 years) | 12.5% corporate tax, 0% capital gains |
| Setup Time | 2–4 months | ~6 weeks | 2–3 months | 2–3 months (RAIF), up to 12 months (AIF) |
| Target Investors | Institutional & retail | Professional & institutional | Professional & institutional | Professional & well-informed |
| Popular Structures | UCITS, RAIF, SIF, SICAR | QIF, Exempt Fund, Hedge/VC Funds | QIF, Exempt Fund, Private Equity, REITs | AIF, RAIF, UCITS |
| EU Passporting |  Yes |  No | No | Yes |
| Cost Efficiency | Moderate to High | Moderate | Moderate to High | High (cost-effective setup) |
| Notable Benefits | EU access, global investor trust | Digital onboarding, modern infrastructure | Tax-free zone, access to Gulf capital | Low cost, strong tax treaties |
Selecting the appropriate fund setup jurisdiction depends on a fund manager’s specific goals, investor base, and regulatory preferences. Luxembourg provides a well-established European hub with a strong regulatory framework and market access. ADGM and DIFC offer robust regulatory environments and tax-efficient regimes with strategic access to Middle Eastern and South Asian investors. Cyprus presents a growing opportunity within the EU, combining favorable tax policies with geographic advantage. Understanding each jurisdiction’s unique benefits enables fund managers to make informed decisions that align with their investment strategies and compliance requirements.
Luxembourg and Cyprus both offer EU passporting rights, but Luxembourg stands out with global investor confidence, extensive fund structuring options, and a highly developed legal framework.
ADGM offers one of the fastest fund setup timelines, with approvals typically completed in around 6 weeks — thanks to digital onboarding and streamlined regulatory processes.
Both DIFC and ADGM offer a 0% corporate and income tax regime for 50 years, making them extremely attractive for maximizing fund returns.
Yes, especially for cost-conscious managers. Cyprus offers EU access, tax efficiency, and flexible legal structures, though its prestige and service infrastructure are not as developed as Luxembourg’s.
Yes. DIFC and ADGM provide excellent access to institutional and sovereign wealth capital in the Gulf region. DIFC also allows passporting across the UAE with minimal regulatory barriers.
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