The UAE government has announced new regulations for venture capital funds, one of the first outputs of the recently announced Government Accelerators programme.
The new legal structure, which is designed to enhance the UAE’s innovation culture and further attract venture capital funds to the country, was formulated via a Government Accelerators team consisting of the Ministry of Economy and the Securities and Commodities Authority.
The new regulations, first announced on Saturday by state news agency Wam, stipulate that a venture capital fund’s net asset value should be equal to or greater than its risk exposure.
Venture capital funds with assets under management over Dh180 million are obliged to issue an annual report according to the IFRS standards and appoint a risk management officer. Funds with assets under management of Dh180m or less are obliged to draft an annual report summary.
Funds are also obliged to conduct a review of investments at least once a year.
The UAE’s Minister of Economy, Sultan Al Mansouri, hailed the new regulations as “a step in the right direction to further promote the competitiveness of small and medium-sized businesses as well as national companies focused on technology and innovation”.
The Government Accelerators programme was formally launched in November by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, designed to accelerate the achievement of key targets of the National Agenda of the UAE Vision 2021.
The programme is designed to encourage collaboration between public and private sectors and academia, aiming to “drive change, raise government efficiency and speed services to build happiness for our people”, according to Sheikh Mohammed.
The Government Accelerators programme will initially focus on the Ministries of Interior, Economy, Human Resources and Emiratisation, Climate Change and Environment, and Education.
The Middle East’s venture capital industry is forecast to be worth US$5 billion by 2019 from about $200 million in 2016, according to UAE-based venture capital firm Beco Capital.
jeverington@thenational.ae
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