The DIFC Prescribed Company (PC) is one of the most versatile and cost-effective corporate structures available within the Dubai International Financial Centre. This handbook covers everything you need to know about establishing and administering a DIFC Prescribed Company.
What Is a DIFC Prescribed Company?
A DIFC Prescribed Company is a non-operating entity established under the Companies Law DIFC Law No. 5 of 2018. The Prescribed Company regime was introduced to provide a streamlined, lower-cost SPV structure for holding assets, facilitating investment structures and managing wealth, without the operational complexity of a full DIFC company.
A Prescribed Company may not carry on business activities in or from the DIFC. Its activities are limited to the prescribed purposes set out in the DIFC Companies Regulations.
Prescribed Purposes
A Prescribed Company may be established for one or more of the following prescribed purposes:
- Group holding: Holding shares or other ownership interests in group entities
- Asset holding: Holding real property, movable property or other assets
- Co-investment: Acting as a co-investment vehicle alongside a fund or group of investors
- Joint venture: Facilitating a joint venture arrangement between two or more parties
- Intellectual property holding: Holding patents, trademarks, copyrights or other intangible assets
- GCC Holding Company: Holding assets or shares owned by nationals of GCC member states
The GCC Holding Company Category
The GCC Holding Company category is a significant feature of the Prescribed Company regime. It allows GCC nationals to use a DIFC Prescribed Company as a holding vehicle for their assets, providing access to the DIFC's common law framework, internationally recognised corporate structure and zero per cent tax environment.
To qualify as a GCC Holding Company, the ultimate beneficial owners of the Prescribed Company must be nationals of a GCC member state (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia or the UAE). A declaration of GCC beneficial ownership is required as part of the registration process.
Key Features
Reduced Registration Fees
Prescribed Companies benefit from reduced DIFC registration fees compared to standard operating companies. The initial registration fee and annual renewal fee are set at a lower rate, reflecting the non-operating nature of the entity.
No Physical Office Requirement
Unlike standard DIFC companies, Prescribed Companies are not required to maintain physical office space within the DIFC. A registered office address (which may be provided by a registered agent such as Atlas) is sufficient.
No DFSA Authorisation
Prescribed Companies do not carry on regulated activities and are therefore not subject to DFSA authorisation requirements.
Common Law Protection
Assets held within a DIFC Prescribed Company benefit from the protections of the DIFC's English common law-based legal framework, providing confidence to international banks, investors and counterparties.
Setup Process
Step 1: Confirm Prescribed Purpose
Confirm that the intended use of the Prescribed Company falls within one or more of the permitted prescribed purposes.
Step 2: Prepare Constitutional Documents
Prepare the Articles of Association and any supplementary documentation required for the specific prescribed purpose (for example, GCC Holding Company declarations).
Step 3: Register with the DIFC Authority
Submit the registration application to the DIFC Authority (DIFCA) along with supporting documentation, including director and shareholder information, passport copies, address verification and the relevant declarations.
Step 4: Appoint a Registered Agent
All Prescribed Companies must appoint a DIFC-registered agent to maintain the company's registered office and assist with ongoing compliance obligations. Atlas Corporate Services acts as registered agent for a wide range of DIFC Prescribed Companies.
Step 5: Obtain the Certificate of Incorporation
Upon approval, DIFCA issues a Certificate of Incorporation and a Commercial Licence confirming the company's prescribed purpose.
Step 6: Open Banking Arrangements
Arrange banking facilities with a UAE-regulated or DIFC-based bank. Note that banking due diligence for Prescribed Companies may be more detailed given their non-operating nature; a clear explanation of the company's purpose and beneficial ownership structure is important.
Annual Obligations
DIFC Prescribed Companies have ongoing obligations that must be met to maintain good standing:
- Annual renewal: The Commercial Licence must be renewed annually with DIFCA, accompanied by the annual renewal fee
- Registered agent: The registered agent appointment must be maintained throughout the company's existence
- Ultimate Beneficial Owner (UBO) register: The company must maintain an up-to-date register of ultimate beneficial owners and submit required information to DIFCA
- Director and shareholder register: Maintain accurate records of directors and shareholders and notify DIFCA of any changes
- Accounting records: Maintain accurate financial records, though full audited accounts are not required for most Prescribed Companies
UAE Corporate Tax Considerations
The introduction of the UAE Corporate Tax regime requires Prescribed Companies to consider their tax status. A DIFC Prescribed Company that meets the Qualifying Free Zone Person (QFZP) criteria may benefit from a zero per cent corporate tax rate on qualifying income. Key conditions include:
- Maintaining adequate substance in the DIFC (which for a Prescribed Company generally means maintaining a registered office and meeting minimum activity requirements)
- Deriving income from qualifying activities
- Meeting de minimis thresholds for non-qualifying income
Atlas recommends obtaining specific tax advice on the UAE Corporate Tax implications for your Prescribed Company structure.
How Atlas Can Help
Atlas Corporate Services provides full Prescribed Company setup and administration services, including:
- Registered agent services and registered office provision
- Constitution and documentation preparation
- DIFCA registration management
- Annual licence renewal and compliance support
- UBO register maintenance
- Banking introduction support
Contact the Atlas team to discuss your Prescribed Company requirements.