FracAssets is a FinTech and RealTech enabled global crowdfunding platform. We enable investors to own fractions of residential real estate & unlisted and startup investments. FracAssets is registered in the Dubai International Financial Centre (DIFC) and regulated by the Dubai Financial Services Authority (DFSA).
Crowdfunding is a term used to describe when a number of investors join together to invest in a real estate or equity asset so that all of them can benefit from a share of the income that the asset generates, and any appreciation in the value of the real estate.
Anyone above the age of 18 is allowed to invest on FracAssets provided they pass our Know Your Customer (KYC) and Anti-money Laundering (AML) checks as per DFSA regulatory requirements. We enable both retail and professional clients to invest in our fractional investment opportunities.
Becoming an Investor on FracAssets is simple and free! Step 1: Register on FracAssets platform by providing information about yourself and supporting documents. This is to ensure compliance with the DFSA’s KYC & AML processes. Step 2: Browse through our investment opportunities in detail and choose the ones that match your goals. Step 3: Fund your Investment through our client money account and start investing! You can deposit funds via wire transfer, debit card or instant transfer. Once we have received your funds, they will be accounted for and confirmed to you as available balance and you may then use these funds to invest in one of our then available investment opportunities.
Investments on FracAssets starts from as little as AED 500. However, the minimum amount required for investment varies depending on the specific property or equity opportunity.
Unless you are a Professional Client, you may invest up to AED 183,650 (USD 50,000) in a single calendar year. If you are a Professional Client, you are free to invest as much as you like. However, as an investor you can own no more than a maximum of 24.99% in a single property, to ensure that a single investor does not own a majority interest.
The following are the fees that we include :
We apply a Placement Fee of 1.5% and an Annual Management Fee of 1%.
There are no Exit Fees charged to investors when exiting the investment.
In the event that we manage to exit from an investment at a value higher than the Total Funding Target, we apply a Performance Fee of 20% on Capital Appreciation (excluding Rental Yield). This helps us remain completely in sync with our investors and ensures that we obtain the highest possible selling price at the time of exit.
Please keep in mind that the fees mentioned above may be modified based on the specific investment opportunity in either Real Estate or Private Equity.
When you invest in a property on FracAssets, you are investing in the shares of a Special Purpose Vehicle (SPV). For each investment, an SPV is created that will own the title deed to the subject property. All investors in a property will be issued shares in the SPV in proportion to the amount they invested. The SPV is incorporated in the Dubai International Financial Centre (DIFC).
A Special Purpose Vehicle (SPV) is just “a separate new entity” – it’s no different than setting up a new business. An SPV is a distinct company created for a specific purpose with its own assets and liabilities. Properties are owned in newly formed SPVs and the customers are shareholders of the SPV. SPVs only purpose is to hold the property on behalf of the customers and no other operational activities are carried out in them. The SPV is registered with the Dubai Financial Centre (DIFC) and your ownership is recorded on the public register and the SPV is registered with the Dubai Land department providing legal trail of your ownership in the property via the SPV.
The Real Estate Regulatory Authority in Dubai (RERA) does not allow more than 4 investors on a property’s title deed. That is why we must set up a Special Purpose Vehicle (SPV) in the DIFC in order to incorporate and ensure that all the investors in the property are legally registered to the property through their ownership of shares in the SPV.
You do! You are the ultimate owner and beneficiary of the property proportionate to your investment amount. For example, if you invest AED 5,000 in a AED 1M property, you own 0.5% of that property. The remaining 99.5% is held by other property investors like you! Collectively, you all earn dividends through the property. Through this mechanism, not only can you invest in an affordable manner, but you can also reduce your risk because you can spread your capital across various asset classes and properties as opposed to one
Since it is not possible to list out dozens of names on a single title deed, the name issued on the title deed (ownership document) is that of the SPV corresponding to your property. Do not be worried. Ultimately, you own direct shares in the SPV, which in turn is only meant for holding the asset that is your investment property and paying out dividends to you. You will have a written confirmation of the number of shares that you hold in the SPV. To see your name as a shareholder, simply go on to the DIFC public register and type the name of the SPV that corresponds to your property.
To view full details of our investment opportunities simply register on the platform and create an account within a couple of minutes. After you have registered, and completed your KYC and AML process, you can go through all available investment opportunities and get full access to the details on each, including but not limited to the investment memorandum, valuation reports and financial forecasts produced by trusted third party providers.
All funds remitted by you to FracAssets are held in a separate client money account with our bankers in Dubai, namely, Emirates NBD Bank, and managed according to the DFSA Client Money Rules.
We accept capital contribution by wire transfer, cheque, and debit cards.
Wire transfer: You can remit your capital contribution to Fracassets Client money account with our bankers, Emirates NBD Bank, Dubai, UAE. The details of the bank account shall be shared with you when you commit your subscription to any of our investment opportunities open for subscription.
Cheque: The cheque/Managers’ cheque should be current dated and drawn in favour of “FracAssets Client Money Account” and payable at par in Dubai, UAE.
Debit Cards: Debit cards that can be used on the payment gateway and can be charged for payment in AED are acceptable. Please note that credit cards are not allowed for such transactions as per the regulatory provisions.
We do not accept any payment in cash.
Tax treatment of any income depends on various factors, eg. Source of investment capital; nature of income – dividend or capital gains; holding period of investment; country where the income accrued; civil, tax, nationality and residency status of the investor, to name a few. In regards to the taxation in UAE , currently there is no personal tax- neither on dividends nor on capital appreciation. In view of the aforesaid, there is no withholding tax as well. The remittances out of the country also do not attract any tax. Tax applicable on receipt of income and/or capital appreciation in your home country depends on various factors as mentioned above. We therefore request that you consult your tax and/or legal adviser to know the rules as applicable to your specific case.
You have complete freedom in choosing the specific asset(s) you want to invest in. Once you complete your KYC and AML paperwork, you will be able to see the specific investment opportunities currently available. In view of this, you invest in an asset of your choice and not in a basket of assets
In such a scenario, if the investment has been more than 85% funded, we may extend the fundraising period by up to 1 week to raise more funds. In case, the funds are still insufficient, we will cancel the investment and release the money back to your FracAssets wallet. After that, you can choose to either withdraw the funds to your primary registered bank account or decide to reinvest them in another opportunity on FracAssets.
In such a scenario, if the investment has been overfunded, we will prioritize the funds based on the order they were received and refund any excess amount back to the investors' FracAssets wallet. Following that, you have the option to withdraw the funds to your primary registered bank account or reinvest them in another opportunity available on FracAssets.
Material Changes are basically modifications or revisions that could significantly affect the value or return on the investment opportunities featured on our platform. In the event that a material change is identified either during or after the funding period, we will immediately reveal prominently all pertinent details on the FracAssets platform and notify committed investors of such a change via email. We will disclose complete information about the material change, including any change in the rights of investor; and what steps, if any, is FracAssets proposing to take in response to such a material change.
Investors are not required to make any further capital investments. Rents are paid out after deducting fees and bills related to the property. On the other hand, property insurance mitigates the risk of severe damage such as fire, floods, earthquake etc.
In the unlikely event that FracAssets is unable to operate on a permanent basis, we will follow our Continuity Plan. If we are unable to make appropriate arrangements with a third party, we will liquidate our investments and use the proceeds to repay all of our clients. As our clients' money is held in an escrow account and we are not a shareholder, if we cease operations, the property may be liquidated and the funds transferred to our clients' accounts. We will ensure that all funds held in our Client Money account are repaid to our clients and all other obligations are settled.
We select properties after examining various factors like location, developer, asset quality, micro and macro market indicators, robust lease agreements and scope of capital and rental appreciation through a detailed cash flow analysis to name a few. Our investment team identifies projects and secures deals which meet our strict investment criteria. To further mitigate the risk, we do not launch any under-construction properties on our platform.
Every property will have an appointed property manager. All property managers are Real Estate Regulatory Authority (RERA) approved and reviewed by FracAssets. The SPV will enter into an agreement with the property manager. In case of a change in the property manager, FracAssets will notify all investors of the same.
Yes. As per RERA requirements, the insurance for any damage or destruction to overall structure and building is arranged by the homeowners’ association. We will arrange insurance for furniture, fixtures and other movable assets in our property along with appropriate third-party liability.
Your share of the rental income of a property will be distributed directly to you periodically by the SPV, unless you wish this to be placed in the FracAssets Client Money account against a then probable investment opportunity available on FracAssets platform. The net distributions will be calculated after all property related costs are deducted from the rent such as service charges, property management fees, FracAssets annual administrative fees, maintenance, insurance, remittance and any other SPV costs. At the end of the investment term, your property will be sold and your share of the sale proceeds (after deduction of all relevant transaction costs, performance fee etc.) will be distributed to you in accordance with your ownership in the SPV. At that stage, your investment will be considered redeemed (with gain or loss) and the SPV will be subsequently dissolved. You earn returns in the form of - rental yields, capital appreciation and currency appreciation, if any.
Rents are transferred to you periodically depending on the property you choose to invest in and the terms of the investment.
All properties on FracAssets will have their third-party valuation report updated on an annual basis and made available to investors on the platform. You can at all times view the estimated market value of your investments on your dashboard, which is based on the latest valuation reports of your properties. You can also track the performance/unrealized gain or loss on each of your investments. This gives all investors accuracy and transparency on what their investment is worth.
At the end of the initial investment term of 5 years, unless extended as per the terms of the Investment Memorandum, the property will be sold and the proceeds will be distributed to all stakeholders as per the terms of the investment. Before the sale, the property will be evaluated by an independent valuer, approved by Real Estate Regulation Authority (RERA) approved valuator.
FracAssets is required to abide by the KYC and AML processes as required by the DFSA. This is why all investors registering on the FracAssets platform must submit a proof of identity (passport and/or national ID) and proof of residence (e.g., utility bills, bank statements, etc.) along with their employment information, source of wealth, and current net assets. This is to keep our platform secure from any fraudulent activity and aims to give you peace of mind that we are accountable to one of the leading financial regulators in the world.
Retail Client: If you are classified as a “Retail Client,” then you will be restricted to AED 183,650 (USD 50,000) over a year. FracAssets classifies all users as Retail Clients unless the user requests to be classified as a Professional Client. According to the DFSA, an individual is classified as a Retail Client if they cannot meet the Professional Client criteria under the provisions of the COB rules of DIFC or if they opt to be classified as a Retail Client. These clients are also offered more protection because they are deemed to have less net worth, experience and understanding of relevant financial markets than a Professional Client. We are required to provide Retail Clients with certain disclosures and risk warnings that we may not necessarily provide a Professional Client. Furthermore, we will handle Retail Client complaints in accordance with specific requirements as defined by the DFSA. Professional Client: If you are classified as a “Professional Client,” then you will have no limitation on how much you can invest using our platform. A Professional Client is one who has prior experience and understanding of relevant financial markets, and a net-worth of USD 1 million from their previous investments.