DIFC SPVs can be used in a variety of structures. Established use cases include holding structures for intellectual property, foundation structures to hold real estate, asset protection through ring-fencing, and issuance of Employee Stock Option Plans.

A SPV can also be used to hold assets on behalf of a Fund or for a Family Office providing Family Office Services. In both cases, the SPV continues to function solely as a passive holding vehicle rather than an operating entity, making it flexible for fund structure and private wealth planning.

Can I hold property in the name of a DIFC SPV?

Yes, you can.

Within the United Arab Emirates

A DIFC SPV is allowed to hold property in the Emirate of Dubai (both Muslims and non-Muslims) in designated areas for foreign ownership. The DIFC has an existing MOU with the Dubai Land Department to this effect.

An application can be made for the transfer fee to be reduced from 4% to 0.125%, in instances where it can be demonstrated that the beneficial owner of a Dubai property being legally transferred to the SPV is the same.

Designated areas include: Business Bay, Dubai Sports City, Dubai Marina, Dubai Motor City, Emirates Hills, Dubai South, International City, Jumeirah Lakes Towers, Jumeirah Islands, The Palm Jumeirah, Arabian Ranches, The World Islands, Mirdif (specified plots), Downtown Dubai, Dubai Investment Park, Old Town, Discovery Gardens, Burj Khalifa, Meydan, Jumeirah Beach Residence, Falcon City, and Jumeirah Village.

Outside the United Arab Emirates

Previously, a SPV could only hold non-UAE property where a substantial part of its overall asset portfolio remained GCC-based — a SPV could not, for example, hold a building in London and a single apartment in Dubai, since the portfolio would then be substantially non-GCC. That restriction was tied to the old GCC Registrable Assets eligibility test and was removed under the 2026 Regulations. A PC established from 24 July 2026 can hold property anywhere in the world, with no requirement that any part of its portfolio be GCC-based.

Can a DIFC SPV be a shareholder in other companies?

Yes, SPVs can be the direct shareholders of companies established in the UAE, GCC and anywhere else in the world.

Who can establish a SPV in the DIFC?

This is the question the 2026 reforms changed most. Until 24 July 2026, a PC had to be established by way of Control (a GCC Person, a Registered Person, or an Authorised Firm), by way of Utilisation (holding GCC Registrable Assets), or by way of Qualifying Purpose (aviation, maritime, IP, crowdfunding, or structured financing) — or, failing all of those, through an arrangement with a DIFC-registered CSP acting as a workaround route.

From 24 July 2026, that entire gating structure is replaced by a single rule: any person can establish a DIFC Prescribed Company, provided a DIFC-licensed Corporate Service Provider is appointed unless the PC qualifies as an Exempt PC.

Exempt PC criteria

A PC is Exempt where its Controller is one of the following:

1. A DIFC Registered Person (other than a Variable Capital Company, a Foundation, an NPIO, or another Prescribed Company).

2. A DFSA-licensed Authorised Firm (or a firm licensed by an equivalent Recognised Financial Services Regulator).

3. A Government Entity — the Federal Government of the UAE, or the government of any Emirate; any entity in which such a government owns, directly or indirectly, at least 25% ownership; or any entity otherwise controlled by such a government.

4. A Publicly Listed Entity on a securities exchange in a Recognised Jurisdiction.

It's worth noticing that these are largely the same categories — GCC Person, Registered Person, Authorised Firm, Government Entity — that used to serve as the eligibility gateway. What has changed is their function: they no longer decide whether you can set up a PC at all. They now decide only whether you need a CSP to do it.

If your PC is owned by an offshore holding company, a natural person, a foreign trust, or any entity outside those four categories, it is non-exempt and will need to appoint a DIFC-licensed CSP, such as 10 Leaves.

What happens to the old Qualifying Purpose categories?

Aviation, maritime, IP, crowdfunding and structured financing structures remain available, but they are no longer a gateway a client needs to fit through — they are optional structures that continue to carry their own specific benefits. A Crowdfunding structure, for example, is still exempt from the usual 50-shareholder cap under the Companies Law. A Structured Financing PC issuing Securities to facilitate a bond or sukuk is still exempt from the prohibition on public offers and the 50-shareholder limit. Those exemptions survive; the requirement to hold a Qualifying Purpose just to incorporate at all does not.

What does the DIFC consider as a Recognised Financial Services Regulator?

The DIFC recognises certain jurisdictions as equivalent to itself in terms of robustness of regulation. These include the UAE, Zone 1 countries, and jurisdictions recognised by the DFSA under its Collective Investment Law. The Zone 1 countries are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, United Kingdom and United States of America.

This definition now matters in a second context beyond Authorised Firm recognition: it feeds directly into whether a Government Entity or Publicly Listed Entity controller qualifies a PC for Exempt status.

What is the process to set up a SPV in the DIFC?

Setting up a SPV in the DIFC involves the following steps:

1. Appointment of a DIFC-licensed CSP (unless the PC qualifies as Exempt) — this now happens at the outset rather than as an optional later step, and includes detailed KYC on the shareholders and Directors of the SPV.

2. Finalisation of Registered Address — the registered office of the appointed CSP, or, for an Exempt PC- the office of a consenting DIFC Affiliate.

3. Initial submission to the DIFC Registrar of Companies.

4. DIFC review, clarifications and responses.

5. Preparation of the legal documents — resolutions and Articles.

6. Final approvals — the PC is now formed.

What is the legal system that is followed in the DIFC?

The DIFC Courts are an independent common law judiciary operating in english, based in the DIFC, with jurisdiction governing civil and commercial disputes nationally, regionally and worldwide. The Courts began operations in 2006.

Originally, the jurisdiction of the DIFC Courts was limited to the geographical area of the DIFC. The signing of Dubai Law No 16 in 2011 allowed the DIFC Courts to hear any local or international cases and to resolve commercial disputes with the consent of all parties.

Does a DIFC SPV require a Registered Agent?

Yes — and from 24 July 2026, this is a firmer requirement than it used to be. A SPV in the DIFC must have a registered office in the centre, where all relevant communications and notices can be delivered. For a non-Exempt PC, that registered office must be the appointed CSP's. For an Exempt PC, it can instead be the office of a consenting DIFC Affiliate. Independently leasing DIFC office space as a standalone route to satisfying this requirement is no longer available under the 2026 Regulations.

What is a Registered Agent for a DIFC SPV?

A Registered Agent is a "Qualified Person" (such as 10 Leaves) licensed by the DIFC and registered with the DFSA as a Corporate Service Provider. From 24 July 2026, appointing one is mandatory for every non-Exempt PC, not simply an optional convenience. The registered agent provides the following services:

1. Assistance in setup of the SPV.

2. Preparation and filing of the Articles of the SPV.

3. Providing the Registered Address for the SPV.

4. Administration of the SPV and secretarial services.

5. Accounting and bookkeeping services.

6. Compliance and AML services.

Not every firm offering company formation services around the DIFC holds a DIFC CSP licence. Before engaging a CSP for a DIFC PC, it's worth confirming licence status directly on the DIFC Public Register — the mandatory appointment requirement only works if a licensed CSP is making the appointment.

Are there any naming requirements?

The name of a DIFC SPV must end with the word 'Limited' or 'Ltd'. It should also comply with the naming rules that are in force at the DIFC.

Does the SPV have to maintain annual accounts?

Yes. Accounts would have to be prepared and maintained as per DIFC Companies Law.

A SPV structured for Structured Financing purposes is exempt from any requirement to file its accounts with the Registrar or have them audited.

In the case of SPVs used by Crowdfunding Platforms, the DIFC has removed the audited accounts requirement where the SPV has an annual turnover of less than US$5 million but has more than twenty shareholders.

Does the DIFC have a time limit for SPVs?

No. SPVs can continue in perpetuity. 

Existing non-Exempt PCs incorporated before 24 July 2026 have six months from that date — until 24 January 2027 or such extension as may or may not be approved by the Registrar,— to appoint a DIFC-licensed CSP. Missing that deadline can result in fines and, ultimately, loss of PC status.

Can the ownership of existing operational business be transferred into the DIFC SPV, without any disruptions?

Yes, the transfer of the shareholding of existing companies within the UAE and the GCC is a simple process. In essence, it is a share transfer in the operational entity.

Does the DIFC SPV require any kind of local representation at the DIFC?

Yes, in the form of the registered office described above — the appointed CSP's office for a non-Exempt PC, or a consenting Affiliate's office for an Exempt PC. See "Does a DIFC SPV require a Registered Agent?" above for the current rules.

Does the DIFC have special courts for DIFC SPVs?

The DIFC Courts have jurisdiction over DIFC SPVs, and the Regulations specify a pro-active role for DIFC Courts.

Can the DIFC SPV be Sharia-compliant?

The DIFC SPV can apply Sharia principles to its governance and consolidation of underlying assets.

Do DIFC SPVs have to file ESR reports every year?

The UAE Economic Substance Regulations were introduced in April 2019 and implemented as part of the UAE's commitment as a member of the OECD Inclusive Framework, and in response to an assessment of the UAE's tax framework by the European Union Code of Conduct Group on Business Taxation. DIFC SPVs may fall within the scope of these regulations.

Can a SPV apply for residence visas and work permits?

No, a DIFC SPV is not allowed to have employees. This has not changed under the 2026 reforms — if anything, the Regulations sharpen the point by extending the prohibition to any other form of worker, not just formal Employees.

Do I need to be physically present to apply for the SPV?

No, the DIFC client on-boarding system is fully digital and the process is done online. From 24 July 2026, appointing a DIFC-licensed CSP is a legal requirement for most applicants rather than simply the easiest way to avoid a site visit — 10 Leaves holds a DIFC CSP licence and will assist you throughout this process.

How much does it cost to set up a SPV in the DIFC?

SPVs remain cost-effective, with DIFC fees as low as US$100 as a one-time fee for applications and US$1,005.45 as licence fees including on an annual basis. Additional fees include annual filing of the Confirmation Statement (US$300) and CSP professional fees — the latter of which, under the 2026 regime, are a mandatory cost for non-Exempt PCs rather than an optional extra.

Non-compliance carries its own cost: failing to appoint a CSP within the required timeframe can attract fines of up to US$20,000, and failing to cooperate with an appointed CSP can result in fines of up to US$100,000.

We can structure your SPV, including drafting of all required documents, through 10 Leaves Legability.  Do contact us for a customised quote!

How are Prescribed Companies treated for UAE Corporate Tax?

A SPV that is wholly owned and controlled by one or more tax-transparent UAE Family Foundations may elect to be treated as part of the Family Foundation for UAE Corporate Tax purposes. If approved, it will not be taxed as a separate taxable person.

(The tax treatment and eligibility of the SPV will depend on the applicable conditions and the specific facts and circumstances. Professional tax advice should be obtained before implementing the structure).

DIFC SPV (Prescribed Company): FAQ’s

 

1. General concepts

Q1. What is a DIFC Prescribed Company (PC) under the 2026 regime?

A private company limited by shares, incorporated or continued in the DIFC under the Prescribed Company Regulations 2026, and treated as a Private Company under the DIFC Companies Law except where the Regulations say otherwise. In substance, it is a holding company wrapper with a lighter compliance load than a standard DIFC operating company.

Q2. What is the main purpose of a Prescribed Company?

It exists to hold and structure assets and investments, not to run a business. In exchange for staying passive, it carries fewer ongoing regulatory requirements and lower fees than a DIFC operational company.

Q3. What actually changed in the 2026 reforms?

One sentence covers it: from 24 July 2026, any person or entity anywhere in the world can establish a DIFC PC as a passive holding vehicle, without needing a GCC nexus, a specific Qualifying Purpose, or local substance — provided a Corporate Service Provider is appointed, unless the PC qualifies as an Exempt PC. That is a genuinely different product from the one the market has known since 2019.

Q4. Why did DIFC remove the substance and GCC nexus requirements?

Because the conditions that justified them have moved on. With UAE corporate tax now in place and global tax transparency norms well established, DIFC concluded that strict local-substance and GCC-nexus gatekeeping was no longer doing useful work. The Centre would rather open the PC regime to a global user base and manage risk through regulated CSPs, AML rules and transparency obligations than through eligibility filters at the front door.

2. Eligibility and scope

Q5. Who can now set up a DIFC Prescribed Company?

Effectively anyone. Any natural or legal person, resident anywhere, can establish a PC, subject to standard DIFC onboarding, AML/UBO checks, and the appointment of a CSP — unless the PC qualifies as an Exempt PC.

Q6. Do I still need a GCC nexus or a Qualifying Purpose?

No. The old requirement to show a GCC nexus, or to fit within a narrow list of Qualifying Purposes (aviation, maritime, IP, structured finance, and so on), has been removed for new PCs. Those concepts survive only in legacy structures and in a handful of specific exemptions — crowdfunding and structured financing treatment being the main examples.

Q7. What is an Exempt PC?

A PC whose Controller is a Registered Person, an Authorised Firm, a Government Entity, or a Publicly Listed Entity. These get a lighter touch: exemption from the mandatory CSP requirement, though nothing stops them appointing one voluntarily — and in practice, many still will.

Q8. Can a PC be used as a trading or operating company?

No, and this hasn't changed. PCs are built for passive holding and structuring, not operations. They are legally treated as Private Companies, but the prohibition on employing staff and the licence restrictions that come with it keep them firmly in holding-company territory.

Q9. Can a PC act as a Fund, Fund Manager, Trustee or General Partner?

No. A PC cannot itself act as a Fund, Fund Manager, Trustee or General Partner. What it can do is hold assets on behalf of Funds and Family Offices, or serve as a Special Purpose Vehicle, where the DFSA framework and the PC Regulations allow it. That distinction — holding assets for a Fund versus being one — is the one clients most often need explained.

3. Key features of the 2026 regime

Q10. What are the headline features of the new PC regime?

Universal eligibility. The removal of GCC nexus and Qualifying Purpose as mandatory gateways. A mandatory CSP appointment for non-Exempt PCs. A continued ban on employing staff. Simplified annual reporting through a Confirmation Statement. And a low, transparent fee schedule. Taken together, these features are what move the PC from a specialist product to a mainstream one.

Q11. What is the role of the Corporate Service Provider (CSP)?

For non-Exempt PCs, a CSP registered with the DIFC Registrar of Companies becomes the main interface with the Registrar. It lodges forms and fees, maintains statutory records, and performs AML/UBO and governance checks under an arrangement the Registrar can rely on when assessing compliance. In effect, DIFC has traded eligibility gatekeeping for CSP gatekeeping — the oversight hasn't disappeared, it's moved.

Q12. Is a CSP always mandatory?

Yes, unless the PC is an Exempt PC, in which case appointing one is optional — though often commercially sensible anyway. Every non-Exempt PC must appoint a CSP and faces a fine, and potential revocation of PC status, if it fails to do so within the required timeframe.

Q13. Can a PC's registered office sit outside the CSP's premises?

Generally, no. For non-Exempt PCs, the registered office has to be the CSP's. Exempt PCs get more flexibility and can use the registered office of a DIFC Affiliate, provided the Affiliate consents in the prescribed form.

Q14. Can a PC employ staff? 

No. PCs are expressly barred from employing Employees or any other form of worker. This is the clearest signal in the Regulations that the vehicle is meant to hold, not operate.

4. Structuring use-cases

Q15. What can a PC hold under the new regime?

Shares in operating companies, partnership interests, real estate (directly or via SPVs), intellectual property, interests in Funds, and other financial and non-financial assets — provided the PC isn't itself conducting regulated Financial Services without DFSA authorisation. This is the widest the PC's remit has ever been.

Q16. Is the Crowdfunding Structure concept still relevant?

Yes, but its role has shifted. For a PC built around a Crowdfunding Structure, the Regulations still carve out specific exemptions — the usual 50-shareholder cap under the Companies Law doesn't apply, for instance — but this is now an optional use-case rather than a gateway a client needs to fit through to qualify at all.

Q17. How are Structured Financing PCs treated?

Where a PC exists to facilitate a bond or sukuk issuance to the public, it is exempt from being treated as a Public Company purely on that basis, and is exempt from the prohibition on public offers and the 50-shareholder limit. General securities and financial promotion rules still apply — the exemption is narrow, not a free pass.

Q18. Can PCs serve Family Offices?

Yes. The Regulations expressly permit PCs to hold assets for Family Offices providing Family Office Services. That makes the PC a genuinely flexible tool for private wealth and family business structuring, without turning it into an operating entity.

5. Regulatory treatment and compliance

Q19. Which DIFC laws apply to a Prescribed Company?

Unless the Regulations say otherwise, PCs sit under the DIFC Companies Law, Insolvency Law, Operating Law and related regulations, plus the AML, UBO and other supra-national requirements that apply to Registered Persons generally. The PC Regulations narrow the compliance load; they don't remove it.

Q20. Does removing the substance requirements loosen AML or UBO obligations?

No — and this is worth being direct about, because it's the point most likely to be misread. The reforms change who can use the PC regime, not the standards that apply once they're in it. AML, sanctions, UBO and reporting obligations remain fully in force, and they're reinforced by the CSP's duty to verify, maintain, and where necessary hand over information to the Registrar and law enforcement.

Q21. What is the Confirmation Statement, and what does it need to cover?

An annual filing that does two jobs at once: it satisfies the standard Private Company requirements under DIFC law, and it confirms the PC remains compliant with the PC Regulations and its broader obligations under applicable Laws. It's the main ongoing compliance touchpoint for a PC.

Q22. What accounts and records must a PC keep?

All PCs must maintain Accounting Records and prepare accounts under the Companies Law. Structured-finance and certain crowdfunding PCs may get relief from filing or audit requirements, but the underlying records still have to be kept — there's no exemption from keeping the paper trail, only from what has to be submitted.

Q23. Can the Registrar rely on the CSP's certifications?

Yes, in good faith, on matters like AML, UBO, qualifying requirements and record-keeping. That reliance is a two-way street: if something goes wrong, the Registrar can revoke the CSP arrangement and report the issue to the DFSA or law enforcement. The CSP is doing real regulatory work here, not just admin.

6. Process, fees and transition

Q24. How do you incorporate or continue a Prescribed Company in DIFC?

Usually through the CSP, which files the prescribed application form with the DIFC Registrar of Companies, alongside the same supporting documentation required for a standard Private Company incorporation or continuation, plus additional requirements prescribed.

Q25. What are the DIFC fees for a PC under the 2026 Regulations?

Item	Fee (USD)
Application and License for incorporation of a Prescribed Company	1,105.45
Application for grant or renewal of a Licence	1,005.45
Lodgement of a Confirmation Statement	300
Application to continue a Prescribed Company into DIFC	1,005.45
Application to transfer a Prescribed Company out of DIFC	1,005.45

This is one of the more understated features of the reform: for a common-law, court-backed vehicle, the entry cost is genuinely low.

Q26. Are there administrative fines?

Yes, and they're meaningful. Up to USD 20,000 for failing to appoint a CSP when required. Up to USD 100,000 where a PC fails to supply documents and information to its CSP. And USD 2,000 for a CSP that doesn't notify the Registrar of a cessation within ten days. The message is consistent with the rest of the reform: fewer entry barriers, firmer consequences for non-compliance once you're in.

Q27. What happens if a PC stops complying with the Regulations?

If a PC falls out of compliance, or no longer meets the applicable requirements, the Registrar can revoke its PC status — following its usual decision-making process, and coordinating with the DFSA if the PC holds a Financial Services authorisation. Once revoked, the entity loses every PC exemption and has to meet the full standard requirements under the Relevant Laws. There's no soft landing.

Q28. Is there a transition period for existing PCs?

Yes. The Regulations come into force on 24 July 2026, and existing non-Exempt PCs have six months from that date — until 24 January 2027 or such extension as may or may not be approved by the Registrar — to appoint a CSP and align with the new framework. Missing that window can trigger fines and, ultimately, revocation of PC status. For anyone advising an existing PC, this is the date that actually matters.

7. Positioning and competitive angle

Q29. Why is the DIFC PC now unique in the region?

Because it combines things that rarely come together. From 24 July 2026, DIFC offers a common-law, court-backed, English-language corporate vehicle that is globally accessible, priced like a low-cost holding company, with no local substance or GCC-nexus conditions attached. Nothing else in the region currently replicates that at scale.

Q30. How does a PC compare with a standard DIFC company on cost and compliance?

Materially lighter on both counts. Lower incorporation fees, lower ongoing licence costs, simplified filings, and the ability to hand almost all corporate and regulatory interaction to a CSP. A full DIFC operating company, by contrast, carries higher fees, broader governance requirements, and real operational substance expectations. The PC is the answer when a client wants the DIFC name without the DIFC overhead.

Disclaimer:
This FAQ reflects the Prescribed Company Regulations as they come into force on 24 July 2026. It is intended as general guidance, not legal advice — clients should confirm specific facts (particularly fees and fines, which regulators periodically revise) against the DIFC Registrar of Companies before relying on them.

How Can 10 Leaves help you?

10 Leaves is a DIFC-licensed Corporate Service Provider and Gold Partner at the DIFC, administering a portfolio of over 1,000 entities across DIFC and ADGM.

We offer the following services related to DIFC SPVs:

1. Structuring and customisation of the Articles of Association — in partnership with Legability, our legal platform, we are able to customise the structure to suit your requirements, factoring in Common Law, UAE Law, European laws, Kuwaiti and Saudi Law, to deliver a highly personalised document for your needs.

2. Setup of the SPV, including appointment as your DIFC-licensed CSP.

3. Registered Address.

4. Nominee Directorship and Authorised Signatory Services.

5. Ongoing CSP compliance administration — AML/UBO checks, statutory record-keeping, and liaison with the DIFC Registrar of Companies.

6. Additional consultations on DIFC and International Foundations in Luxembourg.

If your existing PC needs to determine its Exempt status or appoint a CSP before the 24 January 2027 deadline, get in touch now — KYC onboarding with a new CSP takes meaningful time, particularly where beneficial owners are resident outside the UAE.

About the Authors

Rohit Ghai is the Founder of 10 Leaves and Legability. Over two decades, he has advised founders, family offices, and institutional clients on structuring regulated businesses across the UAE — spanning DIFC and ADGM authorisations, SPVs, Foundations, and compliance frameworks. He works directly on mandates, not at arm's length. Connect with Rohit on LinkedIn.

Bishr Shiblaq is Head of Structuring at 10 Leaves and Legability and advises on cross-border wealth structures across DIFC, ADGM, Luxembourg, and Mauritius. He was previously with Arendt & Medernach, Luxembourg. 

Are you looking to set up a SPV in the DIFC? Contact us today!