DIFC Prescribed Company Regulations 2024 (the 2024) have been put into effect by the Dubai International Financial Centre (DIFC). These regulations replace the Former Regulations (formerly known as the DIFC Prescribed Company Regulation) from 2019 and 2020. The 2024 Regulations were enforced on 15 January, and by July 2024, applicants will have the option to incorporate a “prescribed company” in the DIFC.

Evolution of Eligibility Criteria

A prescribed company can be established in the DIFC if it adheres to the Former Regulations:

1. Entities that meet specific criteria, such as being an Authorized Firm or a Government Entity, but have already registered within the DIFC or are affiliated with DIFC.
2. Entities that applied for Qualifying Purpose status and are involved in specific structures, such as “Structured Financing.”

Key Changes

Expanded Eligibility

Under the 2024 Regulations, applicants seeking to incorporate or continue a prescribed company in the DIFC must meet the following requirements:

• Control by Government Entities: Entities under the control of government bodies, individuals who are citizens of the same state, or entities with securities listed on a GCC exchange are included in the definition.
• Certified Companies: Individuals licensed by the Dubai Financial Services Authority (DFSA) or another recognized financial regulator in the UAE or other regions are eligible.
• Purpose and Assets: The prescribed company must be established or maintained in the DIFC to acquire legal title or control of one or more GCC Registrable Assets.
• Qualifying Purpose: The proposed prescribed company must be established or continued for a Qualifying Purpose in the DIFC.

Directors and Employment Restrictions

The 2024 Regulations include the following provisions:

• Directors of the prescribed company must be employed by a corporate service provider with an agreement in place, as specified in Regulation 3.3.2.
• It is prohibited for a prescribed company to hire employees. This restriction does not apply to the appointment of directors.

Conclusion

The 2024 Regulations represent a step forward in diversifying and enhancing exemptions within the DIFC regulatory framework. Compliance with these regulations is expected to increase the appeal of DIFC prescribed companies for corporate structuring.

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Additional Definitions in 2024 Regulations

• GCC Registered Asset: An asset or property interest registered with a GCC Authority to establish legal ownership, secure rights, and provide public notice of such interests.
• Qualifying Purpose: Defined as specific structures, such as “Aviation Structure,” “Crowdfunding Structure,” “Intellectual Property Structure,” “Maritime Structure,” and “Structured Financing.”
• Corporate Service Provider: A person registered with the DFSA to provide corporate services in the DIFC.