DIFC Company Formation

DIFC Company Formation and Prescribed Companies

The Dubai International Financial Centre Free Zone, popularly known as the DIFC Free Zone, has its own independent regulation and common law legal system which makes it the perfect base to take advantage of the region’s rapidly growing demand for business setups.

What are Prescribed Companies (“Pres Co”)?

Prescribed Companies, a type of special purpose vehicle (also known as an SPV), are unique entities in the DIFC that can be used to hold and structure assets as true holding company vehicles, rather than operational entities.

Companies and family businesses have taken advantage of these flexible and low-cost structures as they operate very well in conjunction with a DIFC Foundation to hold and protect assets.

In the case that the Prescribed Company is established by a Qualifying Applicant, it could be used for the activities of a Holding Company, Managing Office, and/or Proprietary Investment. However, if the PC is established for a Qualifying Purpose, the activity must reflect the selected purpose from the list below.

Qualifying Applicants:

• Foundation
• DIFC registered entity
• Affiliate of a DIFC-registered entity
• Shareholder or an ultimate beneficial owner that controls a DIFC-registered entity
• Holding Company
• Private Trust Company Authorised firm
• Fund
• UAE government entity
• Family-operated business Fintech Company
• Proprietary Investment company
• A person who is wholly owned by one or more of the aforementioned Qualifying Applicants

In addition to the above qualifying applicants, starting in 2024, a Prescribed Company can also be:

Controlled by one or more:

1. a) GCC citizens or entities controlled by GCC citizens; b) an Authorised Firm holding a license from the DFSA or a Recognised Financial Services Regulator; or c) a DIFC Registered Person, other than a PC or an NPIO d) any GCC Government entity; or e) an entity that has any class of its securities listed on a securities exchange in the GCC.
2. Established or continued for the primary purpose of holding legal title to, or controlling, one or more GCC Registrable Assets (i.e., assets that are registered with a GCC Authority).
3. Established or continued for a Qualifying Purpose.

Qualifying Purpose:

• Aviation structure
• Maritime structure
• Intellectual property structure
• Structured financing
• Crowdfunding structure
• DIFC holding structure (Entity established for the sole purpose of owning a DIFC entity)
• Innovation holding structure

Note:

• The Prescribed Company is established by any person, provided that an Employee of a Corporate Service Provider is appointed as a director of the Prescribed Company, and that CSP has an arrangement with the RoC to carry out certain AML/Compliance functions on behalf of the Prescribed Company.
• Prescribed Company must only be used for either its Qualifying Purpose or as a holding company vehicle and may not employ any employees.

Role of Corporate Service Provider

A Prescribed Company has the option to appoint a Corporate Service Provider who may undertake the following activities on its behalf:

• File documents and pay fees for the Prescribed Company
• Conduct assessments or checks to ensure compliance with AML requirements and Ultimate Beneficial Ownership (UBO) regulations, and provide certifications to the Registrar
• Submit reports, disclosures, or confirmations on behalf of the Prescribed Company

Any appointed Corporate Service Provider like TWS Corporate Services (DIFC) Limited must be a Qualified Person, licensed by DIFCA to provide corporate services for companies, and registered with the DFSA as a Designated Non-Financial Business or Profession (DNFBP).

Why Set up A Company in DIFC? 

• Wide range of Licensing Options
• Largest Financial and Fund Domicile in the Region
• Offers a regulated zone to develop and grow
• The framework supporting cross-border transactions
• Attractive location for a Fund looking for an International Presence
• Great Exposure to MENASA and APAC Region

Benefits Of Setting Up a Company In DIFC:

• 100 per cent foreign ownership is allowed in the Freezone
• Zero taxes on Income and Profits
• Freedom of Repatriation of Capital
• Dollar-Denominated Environment
• Judicial Legal System based on English Common Law
• Access to DIFC Courts to process fast-track cases

How can TWS help?

Our team at TWS can help set up your company in the DIFC Free Zone. We can assist you in the incorporation process and offer post-licensing services to the business’s compliance and Anti-Money Laundering functions going forward.