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Tuesday, March 21, 2023

DIFC publishes new venture capital studio regulations for consultation

DIFC publishes new venture capital studio regulations for consultation

The Dubai International Financial Center (DIFC) has proposed new Venture Studio regulations to create the first global legal framework for venture capital regulation.

The proposed regulations aim to enable, enhance and facilitate risk building within the DIFC.

In April 2022, DIFC announced the launch of the world’s first “Venture Studio Launchpad” to assist the development of DIFC’s financial ecosystem (see press release: link). In particular, DIFC aims to be a growth partner and business enabler for venture capital studios, enabling them to establish and scale up at the centre. In doing so, DIFC also further supports the development of entrepreneurs and start-ups within and within the Centre.

Jacques Visser, DIFC Chief Legal Officer, said: “The introduction of the world’s first DIFC Venture Studio Regulation will further deepen DIFC’s thriving innovation ecosystem. The proposed Regulation provides a legal framework to scale operations; develop, test and launch new start-ups; and support venture builders, entrepreneurs and investors. DIFC is committed to providing a robust regulatory environment for businesses to operate with confidence and certainty, including in emerging and developing industries.”

Key benefits of the proposed Venture Studio Regulations include providing the world’s first legislative framework for risk building and, in the process, creating legal certainty for risk building models. It will also provide certainty to how venture capital studios, entrepreneurs and spin-off entities will deal with each other and the wider market.

In addition, it will facilitate the ease of doing business under the venture studio model, implement specific operational measures to facilitate the incubation of new business ideas, sponsorship of entrepreneurs and reduce the cost of new business scale. The proposed regulations will create a tailor-made ecosystem for venture capital, entrepreneurs, start-ups and investors.

Furthermore, it allows the formation of a tailor-made ecosystem for venture capital, entrepreneurs, start-ups and investors.

The proposed regulations have been published for a 30-day public consultation period, with the deadline for comments being March 19. – trade arab news agency

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