Any business operating in Saudi Arabia will quickly encounter two terms that are often used interchangeably: Saudization and Nitaqat. The two terms are closely linked, but in fact refer to different aspects of the same framework.

Understanding the distinction is important because these rules influence recruitment decisions, expansion plans and, in some cases, a company’s ability to access essential Saudi government services and government contracts.

The framework has evolved considerably in recent years. The latest phase of the Developed Nitaqat programme, introduced in 2026, signals a continued move towards sector-specific localisation requirements and closer monitoring of compliance. For businesses entering the Saudi market, workforce planning is no longer something that can be addressed after incorporation. It needs to be considered from the outset.

Saudization and Nitaqat, what is the difference?

Saudization is the policy objective. It refers to the Kingdom’s broader strategy of increasing the participation of Saudi nationals and Saudi employees in the private sector workforce as part of the Vision 2030 agenda.

Nitaqat is the mechanism used to put that policy into practice. It classifies private sector establishments according to how effectively they meet their localisation requirements.

The distinction is simple. Saudization sets the direction of travel. Nitaqat measures where each business sits against the requirements that apply to it.

For employers, it is the Nitaqat classification that has the more immediate practical impact.

How does the Nitaqat system work?

Under the Nitaqat framework, companies are grouped according to their economic activity and workforce profile. They are then assessed against the applicable Saudization requirements and assigned a classification.

The best-performing establishments fall within the Platinum category, followed by the Green bands while businesses that fail to meet the minimum requirements may find themselves classified as Red.

This classification influences a company’s ability to access certain labour-related services. A business with a stronger classification will generally encounter fewer restrictions when dealing with employment administration. Falling below the required threshold can have operational consequences that extend well beyond recruitment.

The important point is that there is no single percentage that applies to every business. The required level of Saudization depends on what the company does and, increasingly, the professions it employs.

What changed in 2026?

Saudi Arabia’s Ministry of Human Resources and Social Development has launched a new three-year phase of the Developed Nitaqat programme, with the stated objective of creating more than 340,000 additional jobs for Saudi nationals in the private sector.

This latest phase builds on earlier reforms rather than replacing them entirely. The underlying framework remains in place, but the direction is clear. The authorities continue to refine localisation targets and expand profession-specific requirements across different sectors.

For employers, this means compliance has become more dynamic. Businesses that were comfortably meeting requirements a year ago may find that their position has changed as thresholds evolve.

Reviewing workforce composition periodically is therefore becoming just as important as monitoring financial or operational performance.

Profession-specific localisation

One of the most noticeable developments has been the expansion of profession-based Saudization requirements.

In practice, this means that overall compliance may not always be enough. A company could satisfy its headline Saudization ratio while still being exposed because a particular department or profession falls below the required threshold.

Recent measures have affected a range of sectors and functions, including marketing, sales, engineering, procurement and administrative support roles. The implementation dates and required percentages vary depending on the activity concerned.

For that reason, businesses should avoid relying on general assumptions about their obligations. The detail matters.

Why does Nitaqat compliance matter?

Nitaqat is often viewed simply as an HR issue. In reality, its implications can be much wider.

A company’s classification can influence its access to employment-related services and affect routine administrative processes linked to workforce management. Where compliance issues arise, they can quickly move beyond the HR department and become an operational concern.

That is why many businesses now treat Saudization compliance as part of their broader planning process rather than a standalone compliance exercise.

Addressing localisation requirements early is usually easier than trying to rectify a shortfall once restrictions begin to affect day-to-day operations.

What should foreign companies consider?

For foreign investors entering Saudi Arabia, workforce planning should sit alongside decisions around licensing, ownership structures and business activities.

The activities selected during the establishment process can influence the localisation requirements that ultimately apply to the business. Equally, recruitment strategies developed elsewhere in the region may not translate directly to the Saudi market.

This does not mean that foreign companies cannot build international teams. Saudi Arabia continues to rely on expatriate expertise across many sectors but the objective is to ensure that opportunities for Saudi nationals form part of that workforce strategy.

Businesses that understand this balance from the beginning are generally better placed to adapt as the regulatory framework develops.

Keeping pace with change

One of the challenges with Saudization is that it continues to evolve.

New profession-specific decisions can be introduced with relatively short implementation periods. Guidance is updated and thresholds may change as the authorities respond to labour market conditions and broader economic objectives.

As a result, compliance is increasingly an ongoing process rather than an annual review exercise.

Regular reviews of workforce arrangements and an understanding of how future recruitment decisions may affect a company’s Nitaqat position can help businesses respond before issues arise.

How Sovereign Group can help

Saudi Arabia remains one of the region’s most significant growth markets, but the regulatory environment continues to develop alongside that growth. Understanding how Saudization and Nitaqat apply to your business is an important part of establishing and maintaining a successful presence in the Kingdom.

Sovereign works with businesses entering and operating in Saudi Arabia to help them understand the practical implications of localisation requirements and how these interact with their wider establishment plans. We also support with the essential portal registrations, such as Qiwa (Nitaqat) for ongoing company compliance.

The post A 2026 Guide to Saudization and Nitaqat appeared first on The Sovereign Group.

There is a particular kind of quiet that settles over South Africans living abroad, the one that arrives at a braai in a park somewhere in London or Perth or Dubai, when someone mentions the smell of fynbos after rain, spotting pinguins off the coast of Cape Town, or the way the light falls on the Drakensberg in the late afternoon. For many, the pull eventually becomes a decision – returning home.

It is a deeply personal choice, and for high-net-worth individuals who have spent years or sometimes decades building wealth outside South Africa, it is also a structurally complex one. The question is not simply whether to return, but how, and in what order.

In my work with returning South Africans and their professional advisers, many returnees experience reverse culture shock upon returning to South Africa and often wish they had considered certain things, prior to the move home. The most common mistake I see is the emotional decision being made first and the financial decision being made second. By the time many clients sit down with us, they have already moved back, and some of the most effective planning windows have quietly closed.

Residence based tax system

South Africa operates on a residence based tax system. Once you are ordinarily resident in South Africa, which is determined not by a calendar but by where your life is centred, you become subject to South African tax on your worldwide income. This is a material shift for someone who has been living and earning abroad, particularly if their current jurisdiction imposes little or no personal income tax.

The implications extend beyond income. South Africa levies estate duty at 20% on the dutiable value of an estate up to R30 million, and 25% above that threshold. Executor fees can add a further 3.5% of the gross estate value before VAT. For a returning South African with offshore assets, offshore wealth, property in multiple countries, and family structures established abroad, how those assets relate to their South African estate becomes a first-order priority.

What to do before you get on the plane

The planning window that precedes a return to South Africa is often the most valuable and the most underused. Several actions can only be taken with maximum effectiveness while you remain tax resident elsewhere.

If you hold assets in an offshore trust, foundation, or holding company, the terms of those structures, the jurisdiction in which they sit, and your relationship to those entities all need to be examined before your tax residency status shifts. Once you become a South African tax resident, tax implication mean that certain deemed disposal rules, controlled foreign company (CFC) provisions, and exchange control regulations begin to apply. A structure that served you well abroad may require amendment before you return, not after the fact. So, review your offshore structures while you still can.

Moving capital between jurisdictions is significantly more straightforward when you are not yet a South African resident. The South African Reserve Bank (SARB) exchange control framework governs what residents can externalise and under what conditions. Bringing capital into South Africa as a non-resident can often be structured more cleanly, with clearer remittance records that carry real weight later, for estate purposes, for South African Revenue Service (SARS), and for the integrity of your overall position.

Coordinating your wills across every jurisdiction is super important. This is one of the most consistently overlooked steps in the pre-return process. A will drafted in the UK may not be automatically effective in South Africa, and vice versa. If you hold assets in multiple countries, you likely need jurisdiction-specific wills that are coordinated. For families returning with minor children, this becomes even more important. Guardianship designations contained in a document that a South African court will not recognise are designations that may not hold when they matter most.

What still matters after you arrive from living abroad

In my experience, some of the most consequential decisions are made or missed, in the first 12 to 18 months back in South Africa, when structures are still adjustable and tax positions are still being established.

Holding assets offshore as a South African resident is entirely legal, but the basis on which those assets are held, the income they generate, and the disclosures required by SARS must be handled with care. Maintaining the legitimacy of your offshore assets therefore requires active management. Failure to properly disclose offshore income or assets is a serious compliance risk under South Africa’s exchange control and tax laws. It falls to the taxpayer to get this right, and ignorance of the requirement is not a defence SARS has shown much patience with.

Many returning South Africans hold pension assets in the UK, Australia, or the UAE built up over years of working abroad. These retirement and pension assets held abroad deserve specific attention. The tax treatment of those assets, both in the originating country and in South Africa, varies significantly depending on the country involved, any applicable double tax agreement (DTA), and the nature of the fund itself.

Cover taken out abroad may lapse on your return, be denominated in a foreign currency that creates ongoing mismatch risk, or exclude certain exposures that are specific to life in South Africa. Rebuilding a coherent risk and life cover portfolio takes time. It should begin early, not when a gap emerge.

The role of the right adviser

No two returning South Africans look the same. The appropriate approach for a family returning from the UAE, where foreign earnings were subject to no income tax and assets were accumulated freely, differs materially from the situation facing someone returning from the UK, where pension contributions, ISAs, and property ownership all carry their own tax histories. In the UK, rental income is taxed in South Africa if resident.

The jurisdiction in which offshore assets currently sit, the family’s ties to other countries, future travel and investment intentions, and the full composition of the estate all feed into the analysis before any structural recommendation is made.

At Sovereign Trust (SA), we work with returning clients and their existing professional advisers, attorneys, accountants, and financial planners, to review the full picture before and after the move. We are in the business of making sure that whatever structure a client holds or needs actually fits their life. My contact details are below. This conversation needs to happen well before the return flight is booked.

This article is intended for general information purposes only and does not constitute financial, tax, or legal advice. Individuals should seek independent professional advice tailored to their specific circumstances before making any structural or tax decisions in connection with a return to South Africa.

The post Coming Home: What A South African Returning from Abroad Should Consider appeared first on The Sovereign Group.

The government of Gibraltar announced, on 17 June 2026, revised rules for people applying for residency in Gibraltar to ensure that long-term residence rights are granted to applicants that make a genuine economic contribution and have a durable connection to Gibraltar.

The new rules will only apply to people seeking residence in Gibraltar after 6 October 2025 and will not affect existing holders (i.e. pre 6 October 2025) of Gibraltar civilian registration cards or identity cards.

It has also announced raising the fees and minimum net wealth requirement for new applicants under the Qualifying (Category 2) Individuals Rules 2004 for high-net-worth individuals.

These changes come in response to a sustained growth in demand for residency in Gibraltar in anticipation of the agreement between the UK and the European Union in respect of Gibraltar, which was published in February 2026 and is due to come into force on 15 July 2026.

This Agreement establishes a new system for the movement of persons, designed to remove all routine immigration checks and physical barriers at Gibraltar’s land border with Spain while maintaining stability and security across Gibraltar and the Schengen Area.

Gibraltar will remain outside both Schengen and the EU, but Schengen border rules will apply at its external border under a tailored arrangement between the UK and EU. Gibraltar residents can stay in any Schengen EU member state for up to 90 days in any 180 without requiring a visa. EU citizens and third country EU residents can stay in Gibraltar for up to 90 days in any 180 without requiring a visa.

Gibraltar has typically received an average of around 1,000 residency applications per year, but this rose to more than 3,000 between 2022 and 2024. When agreement between the UK and the EU was announced in June 2025, applications almost tripled.

In response, the government of Gibraltar established a new Immigration Criteria Consultation Committee to revise the residency framework, and, on 6 October, it suspended all new residency applications from UK and EEA nationals with immediate effect.

Residency – Qualifying Periods and Parentage

On 30 October 2025, the government published the Gibraltarian Status & Immigration (Amendment) Bill 2025, which makes significant changes to qualifying periods for Gibraltarian residency. The Bill provides that:

• The qualifying period for Permanent Residency status is increased from five years to 10 years.
• The qualifying period for Gibraltarian status via long residence is increased from 10 years to 20 years and is also made subject to ministerial discretion.
• To qualify for Gibraltarian status via parentage, an applicant is required to have a parent who is already a registered Gibraltarian. Previously, some applicants could qualify via a grandparent who was entitled to register but had not done so.

The publication of the revised criteria that will govern applications for residence in Gibraltar completes the government’s residency reform programme.

Residence Permit for Employees

Anyone applying for a new Residence Permit in Gibraltar must accompany the application with an employment contract under which:

• The minimum salary must be the equivalent of the average gross annual earnings in Gibraltar, currently £37,500 but which will be updated annually.
• The employer is a business that has been trading in or from Gibraltar for at least a year, is fully registered and licensed in Gibraltar, and is up to date with all payments and filings.

Applicants must also provide evidence of the rental or purchase of a property in Gibraltar. A purchased property must be legitimately available for the applicant’s exclusive use during the duration of the residence permit and cannot be let. A rental property must be for use as the applicant’s primary residence and the lease must not be for less than 12 months or for a holiday rental. No future applications will be accepted from individuals living on marine vessels.

Applicants must further provide proof that they are 55 years old or under, subject to ministerial discretion, and provide an official vetting form from their country of origin.

For applicants under 30 years of age, the minimum salary requirement can be waived if the employer pays the tax and social insurance contributions equivalent to the minimum salary threshold in Gibraltar for every year until the salary threshold is reached.

Any individual applying for residence can be accompanied only by a spouse and children. For a spouse, the applicant is required to pay an amount equivalent to the maximum employee’s Social Insurance contribution on behalf of the spouse.

New Businesses and Self-Employed Individuals

The framework provides some flexibility. For a business that has traded for less than 12 months or where an individual is registering as self-employed for the first time, an advanced payment in the form of a deposit will be required equivalent to the following:

• Total employee and employer social insurance contribution for the first year of employment, and
• Total tax payable on the equivalent of the minimum salary threshold, taxable at 25%.

This deposit will be returned upon the cessation of business and the Minister for Business has discretion to waive the full amount due, in certain, defined circumstances.

Business Registration Requirements

For a business to be fully registered under the Business, Trades and Professions (Registration) Act and licensed under the Fair Trading Act, the Department of Business can assess factors that may include, but are not limited to:

• The creation of full time or part time employment in Gibraltar.
• The provision of in-demand skills required in the jurisdiction.
• The rental of suitable office or commercial space in Gibraltar.
• A positive tax filing history of the applicant.
• The future generation of economic activity in Gibraltar by the applicant.

Anti-Avoidance Measures

Any variations to a contract that reduce the amount paid to the employee will be automatically flagged to ensure that the minimum salary conditions under which the permit was issued continue to be met.

The government will also implement a mechanism to ensure businesses are up to date with all payments and filings, including tax liabilities, social insurance contributions, licensing fees, registration fees and any other regulatory payments.

Residence Permit Renewal

Residence permits will be subject to annual renewal, with a requirement for confirmation that all conditions continue to be met. Any failure to disclose accurate and complete information, or failure to notify any material change in circumstances, may result in the renewal being refused or the permit being suspended or revoked.

The residence permit will automatically lapse if tax or social insurance payments cease for the individual, unless the employee can produce evidence that payments have been deducted from their salary but have not been paid on by the employer.

All permits will automatically lapse eight weeks after a Notice of Termination of Terms of Engagement is filed with the Department of Employment, unless the Director of Immigration and Home Affairs is satisfied that the individual has a new employment contract.

Benefits for Residence

The benefits attaching to residence have been restricted. They cover the Group Practice Medical Scheme (GPMS) for the holder, spouse and any children under 18 or in tertiary education, but expressly do not extend to an applicant’s parents. Children under 18 are also entitled to schooling in Gibraltar and a scholarship becomes available for a dependent child after 10 years of continuous lawful residence and uninterrupted payment of tax and social insurance in Gibraltar.

Other social benefits, such as entitlement to elderly residential care, domiciliary care, public and affordable housing or berthing rights only become available to those who qualify for Gibraltarian status as British citizens who have completed 20 years of residence.

An unmarried partner of a person holding Gibraltarian status will be required to evidence a durable relationship of at least two years.

Students at the University of Gibraltar are entitled to the benefits arising from residence for the duration of their studies provided the GPMS contribution is paid, with the same entitlement and contribution extending to a spouse and children under 18.

Application Fees and Penalties

The application fee for Residence will be raised to £250. Renewal fees will be set at £100. Residing in Gibraltar without a Permit of Residence can attract a fine of up to £2,500.

The Gibraltar government said: “The proposed criteria for individuals looking to apply for Residence in Gibraltar is intended to ensure that residence in Gibraltar is grounded in genuine economic contribution, compliance with all applicable legislation and the protection and sustainability of public services.

“The policy maintains Gibraltar’s openness to talent and enterprise while introducing clear, fair, and transparent requirements relating to employment, business activity, accommodation, and ongoing contribution through tax and social insurance. Proportionate safeguards and anti-avoidance measures are included to protect the integrity of the system.”

Changes to Qualifying (Category 2) Individuals Rules for high-net-worth individuals

To reflect Gibraltar’s premium positioning in advance of the UK-EU Treaty and to ensure that Gibraltar continues to attract individuals who are well-placed to make a meaningful and sustained contribution to the economy and wider community, the government is also significantly increasing the entry criteria under the Category 2 regime.

Category 2 status is designed for high-net-worth individuals who wish to reside in Gibraltar under a clearly defined framework and is awarded on the decision of the Finance Centre Director.

Under the Category 2 rules, individuals are generally subject to a cap on their Gibraltar tax liability with income tax payable only on the first £118,000 of assessable annual taxable income (2025/2026 rates), subject to a minimum annual tax liability of £37,000. This gives rise to a maximum annual Category 2 tax liability of £42,380 (2025/2026 rates). Assessable income does not include capital gains, gifts or many types of investment income.

Under the changes announced by the Gibraltar government on 18 June 2026, the application fee will increase from £1,233 to £5,000 and the minimum net wealth requirement for new applicants will increase from £2 million to £5 million. This increase in the Category 2 net wealth requirement is long awaited and keeps Gibraltar competitive against other jurisdictions.

The new rules also confirm that Category 2 status carries no entitlement to publicly funded schooling or healthcare, and that a person who does not maintain their Category 2 status has no right to remain resident in Gibraltar.

“We are seeing strong interest in Category 2 status following the Treaty announcement, which reflects growing confidence in Gibraltar’s future. At the same time, it is important that the regime remains aligned with Gibraltar’s broader economic objectives and the opportunities arising from the Treaty,” said Minister for Justice, Trade & Industry Nigel Feetham.

The relevant new residency legislation should be issued shortly.

The post Gibraltar announces new Residence criteria prior to imminent provisional application of UK-EU Treaty appeared first on The Sovereign Group.

The focus for South African entrepreneurs is rightly on building the business, finding customers and generating revenue. Offshore structures and international expansion often feel like something to think about later. The reality, however, is that many technology businesses reach a point where the structure that worked on day one is no longer the structure that best supports future growth.

As businesses begin earning foreign revenue, attracting international clients, developing valuable intellectual property (IP) or seeking external investment, the conversation naturally shifts from running the business to positioning it for the next stage of its journey. That is why it’s worth paying attention to the Mauritius 2026/27 Budget.

Mauritius is now well-established as a leading international financial centre and an investment gateway into Africa. But the government’s commitment to a technology-driven economy is also becoming increasingly clear. This is evidenced in the recent Budget, which focuses on artificial intelligence, digital transformation, innovation, skills development and creating an environment that supports entrepreneurship and investment.

It is apparent that Mauritius is actively positioning itself as a jurisdiction where globally minded businesses can establish, grow and scale. For South African founders operating in sectors such as AI, FinTech, Software as a Service (SaaS), digital platforms and data-driven businesses, this is particularly relevant.

Entrepreneurs do not need more bureaucracy. They need an environment that allows them to focus on building products, serving customers and raising capital. A central pillar of the Budget was to address investment constraints and improve service delivery. In parallel it introduced targeted reforms under the ‘Work and Live’ framework to strengthen Mauritius’ ability to attract high-value investors and leverage global expertise in support of national development priorities.

Many South African entrepreneurs are already operating internationally without fully realising it. They invoice foreign clients, receive revenue from multiple jurisdictions, hold IP that has value beyond South Africa. and engage with investors who are unfamiliar with local structures.

At this point, even if the founder remains based in South Africa, the business itself has become international. The discussion should no longer be about if an offshore structure can better support the long-term commercial objectives of the business, but when. This is where Mauritius can become part of the conversation.

A properly structured Mauritian company can provide a platform for international operations, support engagement with foreign investors and create a framework for expansion into new markets. For businesses with genuine international ambitions, it offers a well-regulated and respected jurisdiction from which to operate.

Timing also matters. The most successful business hubs rarely emerge overnight. There is usually a period where government policy, private capital and entrepreneurial activity begin aligning. Businesses that recognise these trends early often position themselves to benefit as the ecosystem develops and matures. Mauritius appears to be entering such a phase.

That does not mean every South African technology company should immediately establish a Mauritian structure. International expansion should always be driven by sound commercial objectives rather than tax considerations alone. Tax residency, exchange control regulations, substance requirements and ongoing compliance obligations all need careful consideration.

For entrepreneurs building valuable IP, earning foreign revenue, raising international capital or planning expansion beyond South Africa, however, it is no longer simply about “going offshore.” It is about building the right platform to support a business that may ultimately operate across multiple markets and jurisdictions.

The Mauritius 2026/27 Budget sends a clear message: the country intends to play a meaningful role in the future of technology, innovation and global entrepreneurship. For South African entrepreneurs considering whether a Mauritian company, trust or broader international structure could support their growth plans, the next step is to explore the available options and assess whether Mauritius is the right fit for their business.

The post Mauritius Budget 2026/27: why South African Tech entrepreneurs should pay attention appeared first on The Sovereign Group.

Employing GCC nationals across the Gulf can create specific pension and social insurance obligations that are often misunderstood by employers. Across the GCC, there are approximately 24,500 GCC nationals employed in the private sector of another GCC member state. In the United Arab Emirates (UAE) alone, GCC nationals in the private sector has increased by over 3,000% since 2007. The most common mistake is assuming that the pension rules of the country of employment always apply, whereas in reality, GCC nationals are generally protected through a cross-border pension framework known as the GCC Insurance Protection Extension System.

This system allows a GCC national who works in another GCC member state to continue being insured under the pension scheme of their home country, even while they are employed in another GCC jurisdiction. For example, a Saudi national working in the UAE would generally remain subject to the Saudi pension scheme, while the UAE employer would still have registration and payment obligations through the UAE’s applicable pension process.

The purpose of the system is to ensure that GCC nationals do not lose pension protection simply because they are working in another GCC country. It also ensures that pension contributions continue to be paid to the relevant pension authority in the employee’s home country, subject to the rules, contribution rates and salary definitions of that home jurisdiction. The employer’s contribution is generally capped at the rate that would have applied in the country of employment, and where there is a shortfall between the employer contribution in the work country and the employee’s home-country pension requirement, the employee may be required to bear the difference or in some instances employers may settle the difference by paying that out as part of the employees’ End of Service Gratuity (EOSG), or, if the employee works in the DIFC, paying it as part of their DIFC Employee Workplace Savings Scheme (DEWS).

The GCC Pension Extension Framework

The Gulf Cooperation Council (GCC) Insurance Protection Extension System applies across the six GCC member states, which are the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain and Oman. Each country has separate pension laws , pension authorities, contribution rates and salary caps.

It is important to understand that each jurisdiction has its own set of regulations around pensionable salary. This means that whilst one country might consider just the basic salary as pensionable salary, another country might consider the basic salary plus specific allowances, or even the gross salary. Monthly contributions are made by both employee and employer into the pension and social security schemes.

UAE

For UAE national employees, the main federal pension authority is the General Pension and Social Security Authority (GPSSA), although Abu Dhabi and Sharjah have separate pension authorities for certain categories of employees. Federal Decree-Law No. 57 of 2023 introduced a new pension framework for UAE nationals joining employment for the first time from 31 October 2023 in the relevant federal, government and private sectors. Employees who were already contributing under Federal Law No. 7 of 1999 generally remain under the previous scheme. In the UAE, for UAE national employees working, under the current GPSSA 2023 law, the pensionable salary for the government sector, this is the basic monthly salary + cost-of-living allowance + children’s social allowance + UAE national social allowance + housing allowance, capped at AED 100,000. For the private sector, it is the wage agreed in the employment contract, capped at AED 70,000 and not less than AED 3,000.

For other GCC national employees working in the UAE, the UAE employer must register with GPSSA under the GCC Insurance Protection Extension System. The UAE employer’s share is generally not required to exceed the UAE employer contribution that would apply to UAE nationals. This means that where an Employer in the home-country might be required to pay more than 15% (which is the current employer cap in the UAE), they would only be required to pay a maximum 15%.

* these contribution rates are as of the date of this Article and shall remain subject to increase as per local regulations and requirements. Always refer to the most up-to date information

Saudi Arabia

Saudi pension and social insurance is administered by the General Organization for Social Insurance (GOSI). For Saudi nationals, the annuities branch has historically been funded at 18% of contributory wage, split equally between employer and employee. Saudi Arabia has also introduced a new Social Insurance Law with phased contribution increases for certain categories of new entrants. In Saudi Arabia, the pensionable salary is considered as the basic wage + housing allowance. Where housing is provided in kind, GOSI treats its contributory value as equivalent to two months of basic salary. KSA has set a cap on the contributory salary of SAR 45,000.

New System (Post July 2024 hires)

If the employee was first registered with GOSI after 3 July 2024, rates are slightly higher and increasing gradually:

For GCC nationals working in Saudi Arabia, GOSI acts as the work-location authority. The employee is registered with GOSI, however, home-country pension scheme contribution rates apply to these GCC nationals, and the Saudi employer must process contributions in line with the GCC extension rules.

* these contribution rates are as of the date of this Article and shall remain subject to increase as per local regulations and requirements. Always refer to the most up-to date information

Qatar

Qatar’s pension system is administered by the General Retirement and Social Insurance Authority, also known as Daman. Under Qatar’s Social Insurance Law, the standard pension contribution for Qatari nationals is 21%, split between 14% employer and 7% employee. In Qatar, the pensionable salary is considered as the basic salary/wage + social allowance + housing allowance. The housing allowance included for contribution purposes is capped at QAR 6,000, and the total pensionable/contribution salary is capped at QAR 100,000.

For GCC nationals working in Qatar, the employee remains insured under their home-country pension scheme, and the Qatari employer must complete the relevant GCC insured registration process. Qatar’s authority confirms that the home-country law applies and that contribution differences caused by rate or salary-definition differences may be borne by the employee.

* these contribution rates are as of the date of this Article and shall remain subject to increase as per local regulations and requirements. Always refer to the most up-to date information

Kuwait

Kuwait’s pension and social insurance system is administered by the Public Institution for Social Security (PIFSS). The institution was established under Amiri Decree Law No. 61 of 1976 and is the competent authority for social insurance for Kuwaiti citizens in Kuwait and abroad. In Kuwait, the pensionable salary is split into basic insurance salary and supplementary insurance salary. For the private and oil sectors, the basic insurance salary includes the salary received from the employer plus applicable social, children’s and educational qualification allowances, capped at KWD 1,500. The mandatory supplementary salary applies to the amount above the basic insurance cap, capped at a further KWD 1,250. Overall, Kuwait’s effective pensionable salary cap is KWD 2,750 per month.

Kuwaiti pension contributions are structured across different insurance components. For GCC extension purposes, the key employer and employee pension contributions are usually assessed by reference to the Kuwaiti employee’s basic and supplementary salary elements, with salary ceilings applying.

* these contribution rates are as of the date of this Article and shall remain subject to increase as per local regulations and requirements. Always refer to the most up-to date information

Bahrain

Bahrain’s pension and social insurance system is administered by the Social Insurance Organization (SIO). Bahrain has introduced phased contribution increases under Law No. 14 of 2022, and the employer contribution rate is increasing over a number of years.  In Bahrain, the pensionable salary is generally the insured wage registered with SIO, meaning the employee’s monthly wage for contribution purposes, commonly treated as basic salary plus fixed/regular allowances registered with SIO. Bahrain has set a cap on the contributory salary of BHD 4,000 per month.

* these contribution rates are as of the date of this Article and shall remain subject to increase as per local regulations and requirements. Always refer to the most up-to date information

Oman

Oman’s pension system is now administered through the Social Protection Fund (SPF) following the introduction of Oman’s Social Protection Law. The standard pension contribution for old age, disability and death is 18.5%, split between 11% employer and 7.5% employee. In Oman, the pensionable salary is considered as the contribution wage. Under the Social Protection Law, wage means gross salary, or basic wage + all allowances and stipends. Oman has set a cap on the pension contribution wage of OMR 3,000 per month for the old-age, disability and death insurance branch.

Omani nationals working in other GCC countries continue to be covered under the GCC Insurance Protection Extension System. The same 18.5% total pension contribution generally applies, although other Omani social protection branches, such as job security, maternity, sick leave or occupational injury contributions, may require separate consideration depending on the employment scenario.

* these contribution rates are as of the date of this Article and shall remain subject to increase as per local regulations and requirements. Always refer to the most up-to date information

Managing Registration and Payroll Compliance Effectively

Employers should not treat GCC nationals in the same way as expatriate employees for payroll and end-of-service purposes. A GCC national may be exempt from the normal end-of-service gratuity position for the period where they are properly registered and contributing under the GCC pension extension framework. However, where the employee had a period of service before pension registration, or where there has been delayed registration, the employer may still need to assess any accrued employment entitlements separately or ensure that these are settled as late payment.

The employer should also be careful not to rely only on nationality when assessing the contribution rate. The correct position depends on several factors, including the employee’s nationality, the country of employment, the pension authority in the home country, whether the employee is already registered with their home pension authority, the applicable pensionable salary definition, and whether salary caps apply.

In practice, employers should check the pension position before the employee starts work, collect the required registration documents, confirm the employee’s home pension authority, and ensure payroll is set up correctly from the first salary cycle. Where the contribution rate or salary base is unclear, the safest approach is to obtain confirmation from the relevant pension authority before payroll is processed.

Pension non-compliance can lead to delayed registration issues, unpaid contribution liabilities, penalties, employee complaints and complications at the point of termination. For businesses operating across more than one GCC jurisdiction, it is therefore important to maintain a clear process for identifying GCC nationals, confirming the correct contribution rules, and ensuring that payments are made to the correct authority on time.

In the UAE for example, employers must register eligible UAE nationals with GPSSA within 30 days of joining, with late registration attracting AED 200 per day per insured employee, and late or missed pension contributions attracting 0.1% per day on overdue contributions after the payment deadline.

For GCC nationals working in the UAE, registration under the GCC Insurance Protection Extension System is mandatory and, from 1 July 2025, late or missed contributions are subject to a 0.1% daily, and may also be subject to any separate fixed late-registration fine for GCC nationals from their home country.

For GCC nationals to be registered under the Protection Extension System in the UAE, all GCC nationals need to first be registered through the GPSSA platform. For employers who are yet to have a UAE national or GCC national employed, they would first need to register their entity with GPSSA before proceeding with the GCC national’s registration. Once the entity is fully registered, the GCC nationals’ registration can begin directly on the GPSSA platform. Employers will need to fill out an acknowledgement form that the employee will need to sign as part of their registration process and upload it during the GCC nationals registration process. GPSSA aims to complete all registrations, whether for the Employer or the Employee within a 2 working day period.

How can Sovereign PPG help

At Sovereign PPG, we are well versed in assisting clients with their local pensions registrations, both from an employer and employee perspective. This extends to GPSSA and Abu Dhabi Pension Fund (ADPF) applications for UAE and GCC Nationals in the UAE, GOSI registrations in Saudi Arabia, SIO registrations and contributions management in Bahrain, Daman registrations in Qatar, and more.

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The Spanish government formally removed Gibraltar from its blacklist of ‘non-cooperative jurisdictions’ for tax purposes, as of 28 June, following publication of a ministerial order by the Ministry of Finance in the official State Gazette.

The move finally brings an end to a designation that has endured for more than three decades. Gibraltar was included on Spain’s first list of tax havens in 1991 but has undergone a substantial transformation as an international financial centre in the intervening years.

Gibraltar was formally added to the OECD ‘white list’ in October 2009 and became a signatory to the OECD’s Multilateral Convention on Mutual Administrative Assistance in 2014. Significantly, it has never appeared on the European Union’s own list of non-cooperative jurisdictions in respect of tax information exchange.

In 2019, Spain and the UK signed a tax agreement in respect of Gibraltar, which established a framework for tax cooperation and transparency between Gibraltar and Spain and removed the basis upon which Spain had continued to maintain Gibraltar on the list. When this agreement came into force in March 2021, Spain committed explicitly to remove Gibraltar from its blacklist within two years.

“This is a long-overdue and very welcome step by Spain. For 35 years, Gibraltar has carried the label of a tax haven. That label was wrong. It was wrong when it was first applied in 1991, and it became harder to justify with every passing year as we built one of the most transparent, well-regulated financial centres in the world. Spain has now started the process of correcting the record,” said Gibraltar Chief Minister Fabian Picardo.

“The commitment made in 2021 when we signed the International Tax Agreement was clear: delist Gibraltar. It took longer than it should have, and that delay had real consequences for our economy and our reputation. But what matters now is that Spain is acting on its word. This is good news for Gibraltar, for our financial services sector, and for the many businesses and individuals on both sides of the border whose working lives were affected by this outdated designation.”

The delisting of Gibraltar by Spain will lead to a structural change in its tax treatment. Spain will no longer automatically apply domestic anti-abuse measures in respect of personal, corporate and non-resident income. It will also eliminate enhanced requirements and end Gibraltar’s automatic exclusion from certain tax benefits.

Importantly, the timing of the Spanish delisting comes in advance of the new post-Brexit agreement between the UK and the EU in respect of Gibraltar, which was finalised in February and is due to come into force in July.

The main objective of the Agreement is to remove all physical barriers on persons and goods circulating between Spain and Gibraltar. Gibraltar is not joining the EU Customs Territory; it is entering into a bespoke arrangement that enables the free circulation of goods between Gibraltar and the EU without customs checks at the land frontier.

Gibraltar’s current import duty regime will be replaced by a new Transaction Tax (TT), which will be levied at the point of importation or manufacture, or when goods are brought out of bond, rather than at the point of sale. Set initially at a transitional standard rate of 15%, it will increase to 16% in year two and, from year three, will be aligned to the lowest standard rate of VAT applied across the EU, currently 17%.

The Agreement also establishes a new system for the movement of persons, designed to remove all routine immigration checks and physical barriers at the land border while maintaining stability and security across Gibraltar and the Schengen Area. Gibraltar will remain outside both Schengen and the EU, but Schengen border rules will apply at its external border under a tailored arrangement between the UK and EU.

Alongside Gibraltar, Spain’s ministerial order also delisted Barbados, Dominica, Seychelles and Trinidad & Tobago from its blacklist of ‘non-cooperative jurisdictions’ for tax purposes, while Samoa was removed in respect of its offshore business regime. However, Russia was added to the blacklist in respect of its international holding companies tax regime.

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The European Commission issued, on 30 April, an official Guidance Note to clarify the customs and tax treatment of pleasure craft — boats, vessels and private aircraft – under EU customs and VAT rules across all 27 Member States.

These issues have long created uncertainty for boat owners and businesses, particularly in respect of cross-border cruising, second-hand boat sales and vessels returning to the EU from abroad. Although not legally binding, the Guidance published by the Directorate-General for Taxation & Customs Union will carry significant practical weight.

The Guidance confirms several key principles, including:

• Union Status – A yacht’s ‘Union Status’ is the relevant legal concept rather than the more commonly used industry term “VAT-Paid Status” (VPS). Goods that have been released for free circulation in the EU by customs authorities have the ‘status of Union goods’. This means that the necessary controls have been conducted on the goods and that, if applicable, the taxes and duties have been paid.

   
  If a yacht is used solely in the EU Customs Union territory and the EU VAT territory, it is presumed to have the ‘customs status of Union goods’. This means there should be no general requirement for yacht owners to demonstrate EU status every time the vessel returns to port or after an international voyage unless customs authorities have grounds to question it.
   
  The guidance also makes clear that factors such as a yacht’s flag, registration, the owner’s nationality or place of residence are not, in themselves, determinative of its Customs or VAT status. A yacht registered under a non-EU flag can therefore hold Union Status where the relevant Customs conditions are satisfied. However, a yacht registered outside the EU may be subject to more frequent Customs controls.

  Where evidence is requested, yacht owners can rely on a range of supporting documentation, including forms T2L or T2LF, transport records, purchase invoices, sale agreements or other proof relating to VAT payment and the vessel’s origin.

  If a yacht has customs status of Union goods and remains in the EU Customs Union territory, it does not lose this status, regardless of the number of times it is transferred to other purchasers, on condition that the corresponding VAT is paid.

  It should be noted that if a boat is released for free circulation in a part of the EU Customs Union territory that is not also part of the EU VAT territory, such as the Canary Islands, the boat may have the customs status of Union goods but VAT may still be payable on import if the boat subsequently enters the EU VAT territory and is not eligible for relief from customs duties or is not imported by the person who exported the boat.

• Returned Goods Relief (RGR) – generally, a yacht will lose its Union Status when it exits the EU Customs Union territory. Under the RGR provisions, however, yachts may regain Union Status when they return. To qualify, the yacht must normally return within three years, remain substantially unchanged, and, for VAT exemption purposes, be re-imported by the same person who exported it.

   
  If the three-year window has expired, the vessel can no longer benefit from RGR. To re-enter free circulation, the owner is required to pay import duties and VAT or, if the yacht owner qualifies (see below), the vessel can be declared for Temporary Admission for a stay of up to 18 months without payment.

• Temporary Admission (TA) – TA applies for yachts entering EU waters that are both registered outside the EU and owned by a person (individual or corporate) that is resident outside the EU. The TA procedure allows eligible non-EU yachts to enter and be used within the EU without paying customs duties or VAT, provided they are intended for re-export and comply with the applicable conditions. It does not apply to yachts with an EU registration.

   
  The standard period of TA is up to 18 months, which may be extended only in exceptional, justified circumstances. There is no minimum period during which the vessel must remain outside the EU, so a yacht can sail out of EU waters and a new 18-month TA period will begin on its re-entry. Simply crossing the EU border is sufficient to initiate TA. It should be noted that TA is subject to a maximum cumulative total of 10 years per vessel.

“This new guidance provides greater clarity for recreational boat owners, brokers and builders, and should help to ensure smoother cross-border cruising and improved compliance with EU customs and tax rules,” said Gabriel González, Director of Gibraltar-based Sovereign Marine Services.

“The acquisition of a new yacht in the EU can involve significant VAT exposure but there are a number of strategies to reduce, defer or minimise this liability. These include commercial registration, Temporary Admission, offshore delivery or basing the yacht outside the EU. Malta’s leasing scheme can also serve to significantly reduce effective VAT rates.”

“It is essential to obtain specialised advice to structure your purchase because VAT implementation and administrative procedures may vary between Member States. It is also essential to obtain and retain all documentation, such as invoices, contracts of sale, VAT or customs records that can help to substantiate a vessel’s status.”

If you require guidance on your yacht’s EU Customs status, please contact Gabriel by telephone on +350 200 76173 or click on the contact button.

Gabriel specialises in corporate ownership, international yacht registration and the regulatory and fiscal issues arising from the ownership and operation of yachts. As such he assists yacht owners, law firms, yacht management companies, brokers and builders.

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SARS has announced the filing dates for the 2026 tax season which will open 13 July 2026. We remind all clients that, as tax residents, you are required to declare your worldwide income, not just amounts earned locally in South Africa. This includes earnings from foreign employment, investments, rental income, and any offshore structures. For those taxpayers who choose (or have previously chosen) not to disclose, this decision will not be without consequences. Why?

SARS is using the data it receives under the Standard for Automatic Exchange of Financial Account Information in Tax Matters – more commonly known as the Common Reporting Standard (CRS) – to gather information on the offshore assets of South African tax residents.

CRS, developed by the OECD at the start of 2014, calls on countries to obtain financial account information on non-residents from their financial institutions (banks, investment companies and corporate service providers). These institutions then report to their local tax authorities who in turn automatically exchange that information with tax authorities in other countries on an annual basis.

By 2025, 123 countries carried out automatic exchange of information, South Africa being one of these countries. More than 123 million accounts worth €12 trillion were reported already. Over 2,700 bilateral exchange relationships existed in 2025.

Automatic exchange of information is a game changer for tax authorities. This system of multilateral exchange is providing countries around the world with a wealth of new data, empowering their revenue authorities to ensure that offshore accounts, interest earned and payments from structures are being properly declared and when its is not, they still have the information to enable them to tax their residents accordingly.

Since 2019 SARS has been issuing notices to South African taxpayers based on information it has received from foreign jurisdictions under the CRS. The system is clearly working. These notices inform taxpayers that, in the interests of administrative justice, SARS intends to initiate a review of their tax affairs. It asks them to confirm that they have offshore assets and requests detailed information as to the location, the amount and the nature of the investments.

If there is any uncertainty about your reporting and tax obligations in relation to any international structures in which you have an interest, we suggest that you contact your nearest Sovereign office to discuss your arrangements and the need for obtaining tax advice, says Sovereign Trust (SA) Director Coreen van der Merwe.

If you have undisclosed offshore assets and you have not yet received a SARS notice, it would be irresponsible to think that you have fallen through the cracks of the system. It is best to be pro-active and discuss the need for a VDP application with a tax advisor. This might protect you against criminal prosecution and tax penalties. Also remember that your interest in the offshore structure might be of such a nature that no reporting to SARS is required. If you have any uncertainty, speak to an expert.

We also suggest that any South African taxpayer who is currently contemplating setting up any new international structure should ensure that they are working with a reputable management company that has an understanding of the local reporting and tax issues, and which will also be able to connect you with a tax advisor in the jurisdiction where you are tax resident.

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Sovereign’s Asia Conference 2026 brought together colleagues, regional partners and industry contacts for a productive programme spanning Hong Kong and Shenzhen, which combined internal knowledge sharing with external on-the-ground engagement in one of China’s most dynamic business regions.

The conference opened in Hong Kong with a series of internal Sovereign sessions focused on Group updates, regional priorities and cross-border opportunities. Discussions covered developments across Hong Kong, Singapore, the Middle East, Cyprus, Malta, Guernsey and wider international markets to allow offices to exchange insights and devise strategies to support clients with increasingly international needs.

A key highlight of the programme was a seminar on ‘Driving Global Business Expansion, which featured perspectives from several Sovereign jurisdictions and service lines and provided a broad overview of structuring, expansion and planning considerations across Asia, the Middle East and Europe.

Once the Hong Kong programme was completed, the team then travelled to Shenzhen for a series of visits and meetings across Futian, the central business district (CBD), and Qianhai, the tech, finance and urban innovation district that serves as the primary gateway for cross-border collaboration with Hong Kong.

The Shenzhen programme included engagements with the GoGBA Business Support Centre run by the Hong Kong Trade Development Council (HTKDC), the Longhua District’s Industry Going Global Alliance platform, the Top China Brand Global Expansion Expo Alliance collaboration, the landmark Qianhai Exhibition Hall, the Qianhai Shenzhen–Hong Kong Youth Innovation & Entrepreneur Hub cross-border incubator, and the Shenzhen office of international law firm DeHeng Law Offices.

These visits provided first-hand insight into the platforms, policy initiatives and professional networks supporting Chinese companies as they seek to expand internationally. From government-backed business support and brand globalisation platforms to innovation hubs and legal advisory networks, the programme offered a timely view of how Shenzhen and the Greater Bay Area continue to strengthen their role in cross-border trade, investment and entrepreneurship.

The trip also reinforced the importance of face-to-face engagement. Meeting with government representatives, industry leaders, start-ups and professional advisers enabled the Sovereign team to deepen relationships, better understand local priorities and identify where the Group’s international network and advisory capabilities can add value for businesses looking beyond their home markets.

This year’s Sovereign Asia Conference was not only an opportunity to share expertise internally, it was also a valuable platform to connect regional knowledge with international opportunity. As businesses across Asia continue to pursue growth across borders, Sovereign remains well placed to support clients with practical, coordinated and informed solutions.

Commenting on the event, Alan Fong, Managing Director Asia, added: “This year’s Asia Conference further reinforced Sovereign’s position as a truly international business, underpinned by strong regional insight. By bringing together colleagues from across our regional offices to Hong Kong and Shenzhen, we were able to deepen collaboration and gain valuable, first-hand perspectives on cross-border growth. These engagements have strengthened our ability to deliver coordinated, practical solutions to clients navigating international expansion, allowing their businesses to grow beyond their domestic markets.”

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The United Arab Emirates has become one of the leading jurisdictions for investment funds structuring across the Middle East, Africa and South Asia. Much of this growth has been driven by the development of two internationally recognised financial centres, the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), both of which provide dedicated regulatory frameworks for licensed fund managers, asset managers and investment platforms.

For investors considering a UAE fund structure, the choice between these jurisdictions is rarely just a regulatory decision. Investor profile, fund strategy, licensing requirements and distribution plans all influence how a structure should be designed from the outset.

The sections below explain how fund structures operate within both jurisdictions and the practical considerations involved when establishing investment vehicles in the UAE and choosing between DIFC vs ADGM fund setup. While domestic funds can be set up through the Securities and Commodities Authority (SCA), majority of the ones we set up for clients are in ADGM or DIFC due to client preferences.

The DIFC is regulated by the Dubai Financial Services Authority (DFSA), while the ADGM is regulated by the Financial Services Regulatory Authority (FSRA). Although the two frameworks operate independently, both have been developed around internationally recognised regulatory standards with a strong emphasis on investor protection, governance and market integrity.

An important feature shared by both jurisdictions is their legal framework. Unlike mainland UAE civil law systems, both financial free zones operate under English common law. For international sponsors, managers and institutional investors, this often creates greater familiarity when establishing structures, preparing legal documentation and managing investor relationships.

From a tax perspective, both jurisdictions continue to offer efficient environments for investment structuring. Subject to satisfying relevant conditions under the UAE Corporate Tax regime, certain entities may qualify for preferential treatment. The UAE also does not impose personal income tax or capital gains tax on individuals.

International investors frequently examine treaty access when establishing regional structures. The UAE’s extensive network of Double Taxation Agreements and Bilateral Investment Treaties may reduce withholding taxes and minimise instances of double taxation, although outcomes depend heavily on investor location, underlying assets and treaty eligibility.

Fund categories

Although terminology differs slightly between jurisdictions, both frameworks broadly classify funds according to the type of investors being targeted and how the fund will be distributed.

Qualified Investor Funds are generally designed for professional and institutional investors that satisfy prescribed eligibility requirements. Sponsors commonly use these structures for private equity, venture capital, private credit, hedge strategies and real estate investments because restricting participation to professional investors often reduces regulatory complexity and allows managers to bring strategies to market more efficiently.

Exempt Funds are typically positioned between highly restricted professional structures and fully public offerings. They remain designed primarily for professional investors but may allow broader participation than certain qualified investor structures. In practice, sponsors often use these vehicles where they wish to preserve a private placement model while expanding their potential investor base.

Public Funds in the DIFC and Retail Funds within ADGM are designed for wider distribution, including non-professional investors. This creates materially different regulatory obligations. Disclosure requirements become more extensive, governance standards increase and ongoing reporting obligations become more significant because investor protection requirements are substantially higher.

Structuring flexibility

Both jurisdictions provide considerable flexibility when selecting legal structures. Funds may commonly be established using investment companies, partnerships or specialised vehicles depending on the underlying strategy and operational requirements.

In practice, structure selection is rarely driven by a single consideration. The fund’s assets class may influence governance arrangements. Investor location may affect tax analysis. Distribution strategy often influences licensing requirements because marketing rules vary depending on who the fund is intended for and where investors are located.

These considerations are usually interconnected. Decisions made early in the process frequently influence both regulatory outcomes and operational requirements later.

Sponsors should also recognise that creating the fund vehicle itself is only one part of the process. Depending on the operating model, regulated activities such as fund management, investment management or advisory services may require separate licensing and authorisation.

Specialised strategies

Both financial centres support a broad range of specialised investment strategies and alternative asset classes.

Private equity funds and venture capital funds continue to represent a significant proportion of new formations, particularly among sponsors targeting regional growth opportunities. Real estate strategies also remain common, including structures designed to hold income-producing assets, development projects and institutional property portfolios.

Alternative investment strategies, including hedge structures and private credit vehicles, have also expanded as institutional investors increasingly diversify allocations across asset classes.

Both jurisdictions additionally support Shari’a-compliant investment structures. Islamic fund arrangements introduce additional considerations around governance, investment screening and supervisory oversight, which means these requirements should generally be considered early during structuring discussions.

Dubai International Financial Centre (DIFC) or Abu Dhabi Global Market (ADGM) Fund Setup?

Although the DIFC and ADGM are frequently discussed together, they are not interchangeable.

Investor qualification thresholds differ. Regulatory engagement processes are not identical. Licensing approaches, treatment of external managers and ongoing compliance obligations can vary depending on both structure and business model.

The DIFC generally benefits from a larger concentration of financial institutions, asset managers and professional service providers. ADGM has developed strong relationships with sovereign investors, family offices and institutional capital allocators, particularly within Abu Dhabi.

In practice, selecting the appropriate jurisdiction usually starts with understanding the commercial objectives of the sponsor rather than assuming one financial centre is automatically more suitable than the other.

Practical considerations

For sponsors targeting professional investors, both jurisdictions provide credible and internationally recognised environments for establishing regulated investment structures.

For many sponsors, difficulties arise before incorporation rather than during the establishment process itself. Decisions around licensing, target investors, fund classification and distribution strategy are interconnected. If these areas are considered separately, restructures later in the process often create additional cost, extended timelines and regulatory delay.

Fund structures generally work best when commercial objectives are established first, followed by regulatory analysis and implementation planning. Starting with the legal structure before understanding investor requirements often creates unnecessary complexity later.

How Sovereign Group can support you

Sovereign PPG in the UAE is a registered corporate services provider in both the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) and acts as a central point of coordination throughout the fund structuring and establishment process.

Drawing on extensive regional experience and established relationships with specialist regulatory advisers, legal professionals and service providers, we assist clients through each stage of fund formation, including jurisdiction selection, licensing coordination, entity establishment and ongoing operational support.

For a practical discussion regarding funds in the UAE, fund corporate structure, investment platforms or regulatory considerations within the DIFC or ADGM, contact our team by phone on +971 4 270 3400, by email at sovppg@sovereigngroup.com or through the enquiry form below.

Disclaimer

This material is provided for general information purposes only and does not constitute legal, regulatory, tax or investment advice. Specific advice should always be obtained in relation to any proposed fund structure or regulatory application

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