New Opportunities with DIFC Prescribed Companies

The Dubai International Financial Centre (DIFC) has implemented major updates to its Prescribed Company Regulations, effective from July 15, 2024. Key changes include broader eligibility criteria and new requirements for qualifying applicants and purposes. This article will discuss these changes and their impact on businesses looking to establish or maintain a Prescribed Company in the DIFC.

Prescribed Companies (PC) are passive holding entities designed to isolate and protect assets and liabilities from financial and legal risks. They are typically used to hold a diverse range of assets, this could include anything from real estate  and cars, to private and public shares and investments. These PCs allow for access to one of the most prestigious jurisdictions in the UAE and are ideal for facilitating structured financing.

Key Benefits to Establishing a Prescribed Company in DIFC:

1. Asset Protection: PCs offer mechanisms to ring-fence and protect assets and liabilities from financial and legal risks.

2. Tax Efficiency: PCs in DIFC benefit from favourable tax regimes such as no withholding tax, as well as access to an extensive network of double taxation treaties.

3. Confidentiality: being incorporated in DIFC provides for a high level of confidentiality for business operations and financial information, ensuring upmost privacy for asset holders.

4. Regulatory Environment: The DIFC offers a sound and well-regulated environment, with clear and transparent legal frameworks that are attractive to international investors.

5. Flexibility in Asset Holding: PCs can hold a wide range of assets, including real estate, shares, investments, yachts, cars, and aviation assets.

6. Structured Financing: PCs are ideal for structured financing, enabling efficient management and allocation of financial resources.

7. Reduced Licensing Fees: PCs benefit from reduced licensing fees, allowing access to the esteemed Dubai International Financial Centre at a cost friendly fee.

8. Common Law Jurisdiction: The DIFC operates under a common law jurisdiction with independent DIFC Courts, providing a reliable and internationally respected legal framework.

Criteria for Establishing or Continuing a Prescribed Company in the DIFC

To establish or continue a Prescribed Company in the DIFC, applicants must now meet one of the following criteria:

1. The Prescribed Company is established or continued in the DIFC for the purpose of holding legal title to, or controlling, one or more assets in GCC (this could be UAE real estate, intellectual property, or shares in a UAE corporate entity).

2. The Prescribed Company is controlled by one or more:
        • GCC Persons: Individuals or entities based in the Gulf Cooperation Council (GCC) countries.
        • Registered Persons: Entities that are registered within the DIFC.
        • Authorised Firms: Firms that are authorised to operate within the DIFC.

3. The Prescribed Company is established or continued in the DIFC for a Qualifying Purpose. This includes a wide range of business activities that meet specific criteria set by the DIFC.

4. The Prescribed Company established or continued in the DIFC has a Director appointed from a DFSA-registered Corporate Service Provider. This ensures professional oversight and compliance with DIFC regulations.

The updates to the Prescribed Company Regulations present an exciting opportunity for investors seeking to form their business in DIFC unique opportunity for businesses and investors to leverage an enhanced regulatory framework. The broader eligibility criteria and new requirements mean that establishing a Prescribed Company in the DIFC has never been more accessible and advantageous to businesses. The  scheme is ideal for those seeking robust asset protection in a globally respected and well-regulated financial hub. This is an exciting time to benefit from the new PC regulation and ensure your assets are best placed for success. DIFC Prescribed Companies are a necessity for those who are seeking the best options for asset protection and wealth structuring.

By Malek Kassem