The DIFC Prescribed Company (PC) has become one of the most widely used holding vehicles in the region, and the DIFC has now proposed the most significant change to how it works since the structure was introduced in 2019. Set out in Consultation Paper No. 1 of 2026, the proposed amendments would remove the last remaining eligibility restrictions on who can establish a PC, while making licensed Corporate Service Providers central to how PCs are administered and policed.
The public consultation on these proposals closed on 2 June 2026. As at the date of this article, the amendments are proposed only and not yet in force. The DIFC has cautioned that the draft regulations should not be relied upon until formally enacted, and the discussion below reflects the consultation proposals, which may still change before, or if, the regulations are made. This is general information, not legal advice, and existing or prospective PC holders should take advice on their specific position.
If you already use a DIFC PC, or are weighing one up, here is what is being proposed, who would be affected, and what to do about it now.
A Quick Recap: What Is a DIFC Prescribed Company?
A Prescribed Company is a flexible holding and structuring vehicle available in the DIFC. It is not licensed by the DFSA and cannot conduct regulated financial services or sponsor employees; it exists to hold and ring-fence assets such as shares, real estate, intellectual property, and aviation or maritime assets, while sitting inside the DIFC's English common-law framework and DIFC Courts system.
Its appeal has always rested on cost and simplicity: lower incorporation and licensing fees than a standard DIFC company, relief from several DIFC Companies Law requirements, and the ability to use a Corporate Service Provider's registered office instead of leasing physical premises. Since 2019 the regime has been amended in 2020, 2022 and 2024, each time widening the pool of eligible applicants while still requiring them to satisfy a qualifying test. See our guide to the 2024 Prescribed Company reform for how that version of the rules works today.
The 2026 proposals are different in kind, not just degree. Rather than adding another eligibility pathway, they propose removing the eligibility test altogether.
Pillar One: Opening the Regime to Any Applicant
Under the rules in force today, an applicant has to satisfy one of a defined set of nexus conditions, whether that is a GCC connection, a DFSA-regulated person link, a family arrangement, or the 2024 reform's Active Business nexus. Applicants with no existing DIFC presence and no genuine commercial activity to point to can still fail that test.
The proposed amendments would remove these eligibility requirements entirely, making the PC available to any applicant, for any purpose, located anywhere in the world. The DIFC frames this as a natural next step given the regime's maturity and the UAE's broader alignment with international tax transparency and reporting standards: broader access is considered appropriate now that oversight is being strengthened elsewhere in the framework, principally through the CSP requirement described below.
What does not change is the nature of the vehicle itself. A PC remains a passive holding company that cannot employ staff, and the restriction on carrying on DFSA-regulated financial services is retained, subject to the existing carve-outs for structures such as a fund, a crowdfunding arrangement, or a single-family family office.
Pillar Two: Mandatory Corporate Service Providers
In exchange for that open access, the proposals introduce a materially stronger compliance layer. Under the consultation, every non-Exempt PC would be required to appoint a DFSA-licensed Corporate Service Provider to act as its primary administrative and compliance interface with the DIFC Registrar of Companies.
That is a step beyond the 2024 reform, which required only that non-exempt PCs appoint a single CSP-employed director. Under the 2026 proposals, the CSP relationship itself becomes mandatory and carries defined statutory duties, including:
- Lodging all documents, forms and fees required to incorporate or continue the PC
- Preparing and submitting the PC's regulatory filings with the Registrar of Companies
- Acting as the PC's primary administrative and compliance point of contact with the Registrar
- Meeting ongoing statutory notification and record-retention obligations on the PC's behalf
The consultation also proposes clearer statutory duties for CSPs themselves, backed by enforcement measures, so the accountability runs in both directions as the regime opens up.
Who Would Be Exempt?
Not every PC would need to appoint a CSP. The proposals introduce an Exempt Prescribed Company category, broadly available where the PC's Controller is one of the following:
- A Registered Person in the DIFC
- An Authorised Firm, meaning the holder of a DFSA licence or a licence from another recognised financial services regulator
- A Government Entity
- A Publicly Listed Entity with a class of securities listed on a recognised exchange
In practice, this means most privately owned PCs, including structures held directly by individuals, families or family offices, are unlikely to satisfy the exemption criteria and should expect to need a CSP. An Exempt PC will not be required to appoint one, but nothing stops it doing so voluntarily. The consultation paper does not set out the process for applying for or confirming exemption status; that guidance is expected around the time the amendments are enacted.
The Six-Month Transition Period
For existing non-Exempt PCs, timing is the practical issue to plan around. The proposals contemplate a six-month transitional period, running from the date the amended regulations come into force, within which a non-Exempt PC must appoint a suitable CSP.
That clock has not started yet. It only begins once the amended Prescribed Company Regulations are formally enacted, and enactment has not happened as at the date of this article. But the realistic lead time to review a structure, confirm (or rule out) exemption status, and select and onboard a CSP means early preparation is worth starting now rather than waiting for the transition period to open.
The consequences of missing the window are meaningful. Non-compliance could expose the company to administrative fines and, in the most serious cases, allow the Registrar to revoke the company's Prescribed Company status altogether, forcing it onto standard licensing fees and requiring it to lease its own physical office in the DIFC rather than continuing to use its CSP's registered address.
What This Means If You Already Hold a DIFC PC
Start by asking the exemption question. If your PC's Controller is not a Registered Person, an Authorised Firm, a Government Entity or a Publicly Listed Entity, plan on the basis that you will need to appoint a CSP once the regulations come into force, and treat the eventual six-month transition period as a deadline to prepare for rather than react to.
Even PCs that may qualify as Exempt can find it useful to appoint a CSP voluntarily, particularly where the PC forms part of a wider family or corporate structure that already benefits from centralised administration.
What This Means If You're Considering a New Structure
If enacted, the proposals would remove the biggest historical obstacle to using a DIFC PC: the eligibility test. For applicants who previously had no qualifying nexus to the DIFC or GCC, that door would open. But the trade-off is that selecting a CSP moves from being a governance afterthought to one of the earliest decisions in the incorporation process, since a DFSA-regulated CSP will be a prerequisite to incorporation for any applicant that does not qualify as Exempt.
That makes the choice of provider more consequential than it might first appear. Beyond incorporation cost, it is worth weighing the CSP's experience with PC structures specifically, its governance capability, and how it supports the company through ongoing filings and Registrar correspondence, since this is now the entity carrying much of the regime's compliance weight.
Getting Ready
The amendments are not yet law, and the DIFC has been clear that the consultation proposals may change before enactment. But the direction of travel, wider access paired with mandatory professional oversight, is unlikely to reverse. Atlas Corporate Services is a DIFC-registered Corporate Service Provider and already supports DIFC Prescribed Companies through incorporation, governance and ongoing administration. If you hold a PC, or are weighing one up, the most useful step available now is reviewing your structure against the proposed framework well before any transition period begins.
Frequently Asked Questions
Has the DIFC Prescribed Company 2026 reform actually come into force?
Not yet, as of the date of this article. The changes were set out in Consultation Paper No. 1 of 2026, and the public consultation period closed on 2 June 2026. The DIFC has been explicit that the draft regulations should not be relied upon until they are formally enacted. This article explains the proposals as consulted on; the final regulations may differ before enactment, and Atlas will update this guide once they are made law.
How is this different from the 2024 Prescribed Company reform?
The 2024 reform introduced the 'Active Business' nexus, which opened the PC regime to a much wider pool of applicants but still required satisfying an eligibility test. The 2026 proposals go further: they would remove the eligibility test altogether, making the PC available to any applicant, for any purpose, with no qualifying connection to the DIFC or GCC required. In exchange, the 2026 proposals introduce a much stronger compliance backbone by making a licensed Corporate Service Provider mandatory for most PCs, rather than requiring only a CSP-employed director as under the 2024 rules.
Will my existing DIFC Prescribed Company need a Corporate Service Provider?
Almost certainly, unless it falls within the proposed Exempt PC categories: your PC's Controller is a DIFC Registered Person, a DFSA-licensed Authorised Firm (or holder of an equivalent licence from a recognised financial regulator), a Government Entity, or a Publicly Listed Entity with securities on a recognised exchange. Most privately owned PCs, including those held by individuals, families or family offices, will not meet these exemption criteria and will need to appoint a CSP once the amendments are enacted.
What happens if I don't appoint a CSP in time?
The consultation proposes a six-month transition period from the date the amended regulations come into force, within which non-Exempt existing PCs must appoint a suitable CSP. Missing that window could expose the company to administrative fines and, ultimately, revocation of its Prescribed Company status, which would force the company onto standard licensing fees and require it to lease its own physical office in the DIFC rather than using its CSP's registered address.
What does a DIFC Prescribed Company still not allow, even under the proposed changes?
The core nature of the PC is unchanged. It remains a passive holding and structuring vehicle: it cannot sponsor employee visas or actively conduct commercial operations, and it still cannot carry on DFSA-regulated financial services, subject to the established carve-outs that let a PC hold assets for structures such as a fund, a crowdfunding vehicle, or a single-family family office. The 2026 proposals change who can access a PC and how it is administered, not what a PC is fundamentally allowed to do.
Key Takeaways
- DIFC Consultation Paper No. 1 of 2026 proposes the biggest change to the Prescribed Company regime since its 2019 introduction. Public consultation closed on 2 June 2026; the amendments are proposed only and not yet in force.
- Pillar one removes the remaining eligibility tests altogether, opening the PC regime to any applicant, for any purpose, located anywhere in the world, a step beyond the 2024 reform's Active Business nexus.
- Pillar two makes appointing a DFSA-licensed Corporate Service Provider (CSP) mandatory for every non-Exempt PC, with the CSP becoming the company's primary compliance interface with the DIFC Registrar.
- A PC may be Exempt if its Controller is a DIFC Registered Person, a DFSA-licensed (or equivalently regulated) Authorised Firm, a Government Entity, or a Publicly Listed Entity. Privately owned PCs will generally not qualify.
- Once enacted, non-Exempt existing PCs will have a six-month transition window to appoint a CSP or risk fines and revocation of their PC status. That clock has not started yet, but the practical lead time argues for reviewing your structure now.