DIFC Prescribed Companies: Key Changes Under the 2026 Regulations

1. Who can establish a Prescribed Company?

Under the previous regime, a Prescribed Company could only be established where the relevant qualifying applicant or qualifying purpose requirements were met. These requirements generally involved a connection to the DIFC or GCC.

These eligibility criteria have now been removed, meaning that Prescribed Companies are available to a broader range of businesses, investors, family offices and private clients seeking to establish a holding structure in the DIFC.

Although access to the regime has widened, a Prescribed Company remains a passive holding vehicle.

 

2. What activities can a Prescribed Company undertake?

Under the Regulations, the commercial licence of a Prescribed Company is restricted to holding company activities.

A Prescribed Company remains a passive vehicle and cannot:

• employ staff;
• carry on an active commercial business; or
• undertake regulated financial services activities unless separately authorised.

A Prescribed Company may hold shares, investments, real estate, intellectual property and other local or international assets, subject to the legal and regulatory requirements applicable to the relevant asset.

 

3. When is a Corporate Service Provider required?

Under the new Regulations, most Prescribed Companies must appoint a DIFC Corporate Service Provider, such as KENDRIS DIFC. 

Existing Prescribed Companies that do not qualify as Exempt PCs have six months from 24 July 2026 to appoint a CSP.

Failure to appoint a CSP where required may result in:

• a fine of up to USD 20,000; and
• potential loss of Prescribed Company status

Loss of Prescribed Company status may result in additional costs and administrative requirements. In particular, the annual licence fee may increase from USD 1,000 to USD 12,000, together with the requirement to maintain a registered office in the DIFC.

 

4. Which Prescribed Companies are exempt?

The CSP requirement does not apply where a Prescribed Company qualifies as an "Exempt PC".

A Prescribed Company may qualify as an Exempt PC where its Controller is:

• a DIFC Registered Person;
• an Authorised Firm;
• a Government Entity; or
• a Publicly Listed Entity.

The exemption is particularly relevant in practice to regulated and institutional entities that regularly use special purpose vehicles for financing, investment or other structuring transactions. Where the relevant conditions are satisfied, these entities may continue to establish and maintain Prescribed Companies without appointing a CSP.

 

5. What are the CSP's responsibilities?

The Regulations give CSPs a more defined role in the ongoing administration and compliance of Prescribed Companies. Some of these functions may already form part of the services provided by existing CSPs.

The CSP's responsibilities include:

• corporate and statutory filings;
• maintenance of corporate records;
• regulatory notifications; and
• ongoing interaction with the DIFC Registrar.

Clients and other relevant persons connected with a Prescribed Company must provide the CSP with the information and documentation it needs to meet its obligations under the Regulations. Failure to provide the required information may result in fines of up to USD 100,000.

Where a CSP ceases to act for a Prescribed Company, the DIFC Registrar must be notified within 10 days. Failure to make the required notification may result in a fine of up to USD 2,000.

The DIFC Registrar also has granted broader supervisory and enforcement powers, including powers to request information and inspect records and, where appropriate, to refer matters to the Dubai Financial Services Authority (DFSA) or relevant law enforcement authorities.

 

6. What should existing Prescribed Companies do?

Existing Prescribed Companies should review their position before the end of the six-month transition period from 24 July 2026. In particular, they should:

• determine whether the Prescribed Company qualify as an Exempt PC;
• where an exemption does not apply, appoint a CSP within the applicable transition period; and
• where a CSP is already appointed, review the existing scope of services against the CSP's responsibilities under the new Regulations.

 

7. Why consider a DIFC Prescribed Company?

The removal of the previous eligibility criteria means that Prescribed Companies can now be considered for a wider range of international corporate, investment and private wealth structures.

For new applicants, a Prescribed Company may offer several features, including:

• a straightforward vehicle for holding investments and assets;
• lower incorporation and annual licensing fees compared with a standard DIFC company;
• access to the DIFC's common law legal framework and English-language court system;
• compatibility with wider wealth and succession planning, including Foundation and trust structures; and
• access to relevant features of the UAE tax regime (including the Qualified Free Zone Person regime and participation exemption), as well as the UAE's extensive double taxation treaty network.

As with any holding structure, the suitability of a Prescribed Company will depend on the relevant legal, regulatory and tax considerations, as well as the nature and location of the underlying assets.
 

Our local team at your service

KENDRIS Corporate Services (DIFC) Ltd is a DIFC-licensed Corporate Service Provider. In case you would like to know more about the DIFC Holding and Prescribed Companies possibilities, or learn about different alternatives depending on your situation, do not hesitate to contact us.