Private equity (transactions)—United Arab Emirates—Q&A guide

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Private equity (transactions)—United Arab Emirates—Q&A guide
  • 1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?
  • 2. What are the implications of corporate governance rules for private equity transactions? Are there any advantages to going private in leveraged buyout or similar transactions? What are the effects of corporate governance rules on companies that, following a private equity transaction, remain or later become public companies?
  • 3. What are some of the issues facing boards of directors of public companies considering entering into a going-private or other private equity transaction? What procedural safeguards, if any, may boards of directors of public companies use when considering such a transaction? What is the role of a special committee in such a transaction where senior management, members of the board or significant shareholders are participating or have an interest in the transaction?
  • 4. Are there heightened disclosure issues in connection with going-private transactions or other private equity transactions?
  • 5. What are the timing considerations for negotiating and completing a going-private or other private equity transaction?
  • 6. What rights do shareholders of a target have to dissent or object to a going-private transaction? How do acquirers address the risks associated with shareholder dissent?
  • 7. What notable purchase agreement provisions are specific to private equity transactions?
  • 8. How can management of the target company participate in a going-private transaction? What are the principal executive compensation issues? Are there timing considerations for when a private equity acquirer should discuss management participation following the completion of a going-private transaction?
  • 9. What are some of the basic tax issues involved in private equity transactions? Give details regarding the tax status of a target, deductibility of interest based on the form of financing and tax issues related to executive compensation. Can share acquisitions be classified as asset acquisitions for tax purposes?
  • More...

Private equity (transactions)—United Arab Emirates—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to private equity (transactions) in United Arab Emirates published as part of the Lexology Getting the Deal Through series by Law Business Research (published: February 2021).

Authors: RIAA Barker Gillette—Hasan Anwar Rizvi

1. What different types of private equity transactions occur in your jurisdiction? What structures are commonly used in private equity investments and acquisitions?

There are various types of private equity transactions that occur in the United Arab Emirates (the UAE) including leveraged buyouts and venture capital investments. Investors such as local, regional and global private equity firms, sovereign wealth funds, quasi-governmental entities and family offices are active in the market. Transactions could take the form of acquisition of majority or significant minority equity interests.

The UAE Securities and Commodities Authority (SCA) is the relevant regulatory body in the UAE in respect of investment and mutual funds. The SCA's regulations recognise the corporate structure of a private equity fund as that of a limited partnership. In this structure, the general partner is an SCA-licensed fund management company, whereas the investors are limited partners.

In the Dubai International Financial Centre (DIFC) and in the Abu Dhabi Global Market (ADGM), the following corporate structures can be used to establish a domestic fund: investment company, investment partnership or investment trust.

In the UAE, the form of private equity

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