Dubai announced the setting up of a new investment fund to oversee all government investments, including its stakes in entities like the Dubai Electricity and Water Authority (DEWA), Salik Company, and Dubai Taxi Company.
All relevant government entities in Dubai are to mandatorily register all their assets, stocks, shares, movable and immovable properties, licences, permits, bonds, privileges, and other instruments under the newly created Dubai Investment Fund.
The new Fund, established through a new rule issued by the Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, will function as an independent public entity operating on a commercial basis.
The law also endows the Fund with the financial and administrative independence to pursue its objectives along with the legal mandate to do so.
Multiple roles for the new investment fund
The newly created Fund will be responsible for investing all Dubai Government funds, surpluses and the general reserve locally and internationally.
The investments are to be made to generate returns benefiting both current and future generations, while implementing best practices and the investment policy approved by the Fund’s Board of Directors, a Gazette notification announcing the new Fund said.
The Fund will also seek to bolster the financial stability of the Dubai Government by financing the government’s deficit and establishing strong financial reserves, thereby promoting long-term financial sustainability.
It is also mandated to endeavour to actively contribute to the realisation of the emirate’s strategic priorities and endorsed public policies through efficient investments in strategic and development projects, with special focus on initiatives that foster Dubai’s sustainable development across vital sectors, including the economic and social spheres, while diversifying income sources.
Formation of Board to oversee functioning of the new fund
Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai, also issued the Executive Council’s Resolution No. (94) of 2023, announcing formation of the Fund’s Board of Directors.
The board, chaired by Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, will have Abdulrahman Saleh Al Saleh as its Vice Chairman, and Abdulaziz Mohammed Al Mulla, Rashid Ali bin Obood, and Ahmad Ali Meftah are its members.
Abdulaziz Mohammed Al Mulla is appointed as the Managing Director and CEO of the Dubai Investment Fund.
Fund will have vast powers on investment decisions
The law specifies that, without infringing upon the powers and jurisdictions granted to the Investment Corporation of Dubai, established under Law No. (11) of 2006 and its amendments, and in accordance with prevailing regulations in the Emirate, the Dubai Investment Fund will assume diverse roles and responsibilities to fulfill its objectives.
This includes investing in government surpluses, establishing companies and investment funds independently or in collaboration with third parties, acquiring or merging companies, projects and funds, besides holding stakes in them.
The Fund will focus on investments in stocks, bonds, and securities to achieve sustainable returns and can explore prospects in local or international financial markets, while following investment policies approved by the Board of Directors.
Additionally, it can deal in movable and immovable assets, manage funds, provide mortgages and guarantees, besides participating in the financial derivatives business, all in compliance with Dubai’s laws.
Organisational structure of the fund
The new law also defines the organisational structure of the Dubai Investment Fund, detailing the composition and responsibilities of its Board of Directors.
In compliance with the newly stipulated law, the Dubai Investment Fund is obligated to uphold principles of justice, transparency, and fair competition in conducting its activities and operations.
It is mandated to make the data and information accessible to the public in accordance with the principles and regulations set by its Board of Directors in this regard.
The law also states that effective from the date it takes effect, Dubai Investment Fund will function as Dubai Government’s vested authority when it comes to owning shares in entities like the Dubai Electricity and Water Authority (DEWA), Salik Company, Dubai Taxi Company, and other companies directly owned by the Dubai Government.
Additionally, it covers government-owned companies as identified by Dubai’s Supreme Fiscal Committee.
The Fund will also relieve the Dubai Government of rights and obligations related to companies, specifically in the context of ownership of shares comprising the capital of such companies, as also all contracts, agreements, commitments, deposits, bank accounts, and loans associated with such shares.
Furthermore, all relevant government entities in Dubai must register under Dubai Investment Fund all their assets, stocks, shares, movable and immovable properties, licences, permits, bonds, privileges, and other instruments.
Additionally, Dubai World will be affiliated with the Dubai Investment Fund while preserving its legal identity as defined by Law No. (3) of 2006 and its amendments regarding the establishment of Dubai World.
The Gazette notification said the Chairman of the Board of Directors of the Dubai Investment Fund will issue decisions to implement the Law, subject to the Board’s approval.
“Resolution No. (3) of 2022 pertaining to Dubai Government Representation in the Companies it Owns hereby stands annulled. Law No. (25) of 2023 and Executive Council Resolution No. (94) of 2023 annul any other legislations that may contradict them,” the notification said.
The new law and the resolution are effective from the date of their issuance.
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