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Prescribed companies are one type of special corporate entity seen in Dubai International Financial Centre (DIFC), a free zone in UAE. Prescribed companies are considered as Private companies under DIFC companies law.
Prescribed companies are exempted from some requirements applicable to other private companies such as the requirement for audit and filing of accounts with DIFC Registrar of companies. Even incorporation and licensing fees are lower in case of DIFC companies and allowed to use DIFC registered offices or get a DIFC registered office through a corporate service provider.
Prescribed company regulations came into effect on 31st October, 2019 and since then more than 200 companies have already been established. DIFC offers high quality business infrastructure with low legal cost and other benefits such as 0% tax rates and 100% foreign ownership options. The Prescribed company regulations also provide a more flexible regime compared to the existing Special Purpose Companies (SPC) and the Intermediate Special Purpose Vehicles (ISPV), who are automatically converted to Prescribed companies.
Before enactment of Prescribed Company regulations, an SPC activity was limited to structured financing and an ISPV could only be established by
The new rule, however allows a Prescribed Company to be controlled by one or more Qualifying Applicants or be formed and continued for a Qualifying Purpose.
Qualifying Applicants are entities with a physical presence in the DIFC requiring licensing by DIFC and/or DFSA. An entity can be any of the following
The DIFC Licensed Authorized firm of a Qualifying Applicant of a Prescribed Company may carry out activities permitted by the DIFC Registrar of companies in accordance with the categories of commercial licenses available in the DIFC.
Control is the Power of a person to secure by means of the holding of shares or the possession of voting powers, directly or indirectly; or as a result of any powers conferred by the Articles of Association or other document regulating the Prescribed Company or any other body corporate.
Qualifying Purpose is considered as
In the event of not meeting the requirements outlined in the Regulations, the DIFC Registrar may, after following certain procedures, revoke the status as a Prescribed Company.
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