Prescribed companies (PCs) were introduced in DIFC (Dubai International Finance Centre) in 2019, offering a more flexible and cost-effective solution than their predecessor – the Special Purpose Company.
PCs are exempt from certain requirements that apply to alternative corporate vehicles (eg private companies) such as the requirement to audit or file accounts, and they are subject to lower incorporation and licensing fees. This simplified regime and related benefits make PCs an attractive versatile ownership vehicle for a range of asset types.
The DIFC Authority has kept the regulations governing the usage of a PC under constant review in order to ensure that the jurisdiction maintains its competitive position as a leading global financial centre and the principal centre serving the GCC countries. Therefore the regulations were reviewed in 2020 and again in 2022, on both occasions with the aim of expanding the regime to a wider base of applicants and developing their appeal and eligibility to a broader market.
Despite these amendments, there has been ongoing demand to further expand the PC regime and the DIFC Authority has now completed a third review of the PC regulations with a number of changes being implemented from 15 July 2024.
Updated Regime from 1 June 2024
Under the previous regime, PCs were primarily available to investors or entities that already had existing activities within the DIFC or family businesses that intended to structure their holdings there. The PC could only be established by a Qualifying Applicant or for a Qualifying Purpose as defined by the regulations.
Under the revised regulations, it is possible to establish a PC if it is:
- Controlled by one or more
- GCC citizens or entities controlled by GCC citizens
- an Authorised Firm
- a DIFC Registered Person, other than a PC or a Non-Profit-Incorporated-Organisation (in line with the existing regime)
- 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)
- Established or continued for a Qualifying Purpose (in line with the existing regime)
- Established for a qualifying purpose
PCs are regularly used by JTC Dubai’s clients which include Family Offices. The changes considerably enhance and simplify the current regime, opening up access to this type of vehicle to a far wider market and as such will create new exciting business development opportunities for our team in Dubai.
