DIFC Prescribed Company After the 2024 Reform: Who Can Now Use It?

The DIFC Prescribed Company (PC) has been available since 2019, but for its first five years it came with a significant constraint: to use one, you needed a specific connection to the DIFC or the GCC. That changed in July 2024 when the Prescribed Company Regulations 2024 replaced the original rules and opened the structure to a much wider pool of international investors.

What follows explains what changed, who can now use a DIFC PC, and what the practical implications are, including the new governance requirement that all non-exempt PC holders need to understand.

What Is a DIFC Prescribed Company?

A DIFC Prescribed Company is a special purpose vehicle incorporated under the DIFC Companies Law. It is a company in the full legal sense: it has its own legal personality, can hold assets, enter contracts, and be a party to proceedings in the DIFC Courts. What sets it apart from a standard DIFC operating company is that it is not licensed by the DFSA and cannot conduct regulated financial services activities.

The PC is a holding and structuring vehicle, used for:

• Holding real estate: DIFC or UAE property, or international property held via a UAE holding structure
• Private equity and venture capital holdings: holding stakes in portfolio companies
• Co-investment vehicles: ring-fencing a single investment within a dedicated entity
• Family wealth structuring: holding family assets within the DIFC's English common-law framework
• Intellectual property holding: centralising IP within a recognised common-law jurisdiction
• Cross-border M&A structuring: a UAE common-law acquisition vehicle for inbound or outbound transactions

The PC sits within the DIFC's English common law framework, with access to the DIFC Courts and a minimal ongoing compliance burden. It has no minimum share capital requirement, and the annual licence fee is USD 1,000. By the standards of any onshore common-law jurisdiction, that is remarkably good value for a properly constituted SPV.

The 2019 Framework: Nexus Conditions

Under the original 2019 Prescribed Company Regulations, establishing a DIFC PC required meeting one of a limited set of nexus conditions:

1. GCC connection: the PC is beneficially owned (directly or indirectly) by a GCC national or a GCC-incorporated entity
2. DIFC-regulated person: the PC is established by, for, or in connection with a DFSA-licensed entity
3. Family arrangements: the PC is established as part of a family arrangement connected to the DIFC
4. Specific asset nexus: the PC holds specific assets with a DIFC or UAE connection

The framework worked well within its intended scope, but it was restrictive. An international investor from Europe, Asia or North America who had no DFSA-regulated entity and did not fit the family arrangement category could not straightforwardly use a DIFC PC. The 2024 reform addressed that directly.

What Changed in July 2024

The Prescribed Company Regulations 2024 made three significant changes.

1. The Active Business Nexus

The most important change is the introduction of the Active Business nexus.

Under this pathway, any person (regardless of nationality, domicile or existing DIFC connection) can establish a DIFC PC, provided the PC is being established to carry on or facilitate an active business in or from the DIFC.

"Active business" encompasses conducting commercial activities, providing services to clients, and facilitating transactions where the DIFC or UAE plays a genuine operational role. It is the most flexible pathway and the one most relevant to international investors and businesses that previously had no route in.

In practice, this means a European private equity manager who wants a DIFC holding vehicle for their MENA portfolio, or an Asian family office seeking a DIFC SPV for UAE real estate investments, can now incorporate a PC under the Active Business nexus, provided the structure is genuinely used for commercial activity in or from the DIFC, not merely as a shell registered address.

2. The CSP Director Requirement

Alongside the expanded access, the 2024 regulations introduced a new governance requirement for non-exempt PCs: at least one director must be an employee of a DIFC-licensed Corporate Service Provider (CSP).

The logic behind this is straightforward. If you are broadening the pool of people who can use a DIFC structure to include anyone in the world, you need a mechanism to ensure there is an identified professional within the DIFC who is accountable for the PC's compliance with its DIFC obligations, including AML requirements, filing deadlines, and the like. The CSP Director fills that role.

PCs that are exempt from this requirement include:

• PCs 100% owned by a DFSA-regulated entity
• PCs used as part of a DFSA-regulated fund structure
• Certain family arrangement PCs meeting specified criteria

For all other PCs (including those established under the new Active Business nexus) the CSP Director is required from the date of incorporation.

3. Streamlined Existing Nexus Categories

The 2024 regulations also refined and clarified the 2019 nexus categories. The GCC connection nexus is retained but more precisely defined. The family arrangements nexus is retained and now explicitly covers DIFC Foundations, DIFC trusts and succession planning structures. The regulated person nexus continues to serve DFSA-licensed entities.

Who Can Now Use a DIFC Prescribed Company?

The eligible population is now considerably broader. Under the 2024 rules, the following categories of person can establish a DIFC PC:

International investors and businesses (via Active Business nexus)

Any person globally who establishes the PC to carry on or facilitate genuine commercial activity in or from the DIFC. In practice, this includes:

• International fund managers establishing a DIFC management entity or co-investment vehicle
• Multinational companies setting up a DIFC regional holding company
• Family businesses creating a DIFC intermediate holding structure for their UAE operations
• Private equity sponsors establishing a deal-specific acquisition vehicle

GCC nationals and entities (via GCC connection nexus)

GCC nationals, GCC-incorporated companies, and their families can continue to use this pathway as before.

DFSA-regulated persons (via regulated person nexus)

DFSA-licensed entities can establish PCs as investment vehicles, co-investment structures or fund-related vehicles as before.

Families and family offices (via family arrangements nexus)

Families with assets that benefit from a DIFC common-law holding structure (including Foundations, succession structures and family investment vehicles) continue to have dedicated access via this pathway.

Practical Implications

For international investors without any prior DIFC connection, the 2024 reform is genuinely significant. Where previously there was no clean route to a DIFC PC for a manager or family office based outside the GCC, the Active Business nexus provides a clear pathway, provided the structure is being used for real commercial activity and not simply as a registered address.

For existing PC holders incorporated under the 2019 rules, compliance with the new regulations was required by January 2025. Most existing PCs will qualify under the GCC connection or regulated person nexus without difficulty. The main action required for non-exempt PCs is confirming a CSP Director appointment.

For fund managers, the Active Business nexus creates new options for co-investment vehicles and deal-specific SPVs where the relevant management activity is being conducted from the DIFC. This has been a useful addition for managers who want the DIFC legal framework around a single-asset vehicle without having to fit the structure through the fund regime.

Cost and Timeline

The DIFC PC remains one of the most cost-effective SPV structures available:

• One-time incorporation fee: USD 100
• Annual commercial licence fee: USD 1,000
• CSP Director fee: typically USD 3,000–6,000 per annum depending on the scope of service

Incorporation is typically completed within 5–10 business days from submission of complete documentation. Unlike regulated entity applications, PC incorporation does not require DFSA review, which keeps the timeline short and predictable.

Getting Started

The first question to answer is which nexus pathway applies to your situation, and whether your PC will be exempt from the CSP Director requirement. Atlas Corporate Services handles PC incorporation, CSP Director services, and ongoing administration for DIFC Prescribed Companies.

Note: the DIFC has since proposed a further round of reform, set out in Consultation Paper No. 1 of 2026, which would go considerably further than the changes described above. See our guide to the 2026 Prescribed Company amendments for what is being proposed and what existing PC holders should be doing now.