Do existing DIFC Prescribed Companies need to act before 24 January 2027?

–Yes, every non-exempt Prescribed Company incorporated before 24 July 2026 must appoint a Corporate Service Provider by 24 January 2027

The DIFC Prescribed Company Regulations, as amended with effect from 24 July 2026, give existing Prescribed Companies six months to appoint a Corporate Service Provider unless they qualify as exempt. A Prescribed Company is the DIFC’s low-cost holding vehicle, used for special purpose companies, family holdings and financing structures. The Registrar of Companies may allow a longer period on application, but a company that misses the deadline faces a fine and may lose its Prescribed Company status.

• Anyone can now own one. The amended Regulations removed the old qualifying requirements, so any individual or company, resident anywhere, may establish or continue a Prescribed Company in the DIFC.
• The licence covers holding activity only. A Prescribed Company must remain a passive vehicle, and it may not employ staff, sponsor visas or carry on an operating business.
• Most companies need a service provider. A non-exempt Prescribed Company must appoint a DIFC-licensed Corporate Service Provider and use that provider’s address as its registered office.
• Four types of owner give exemption. A Prescribed Company controlled by a DIFC Registered Person, a DFSA Authorised Firm, a government entity or a listed company does not need a service provider.
• Fines go up to USD 100,000. Failing to appoint a service provider carries a fine of up to USD 20,000, and failing to give the provider the information it needs carries a fine of up to USD 100,000.
• Foundations no longer give exemption. A Prescribed Company owned by a DIFC Foundation or a Prescribed Variable Capital Company now needs a service provider unless another exemption applies.

Who this applies to

This applies to directors and owners of existing DIFC Prescribed Companies, and to anyone planning to use one. It concerns family offices, private investors holding shares or property through a DIFC vehicle, and founders using a holding company above an operating business. It also concerns joint venture partners and arrangers of financial services and real estate financing structures. DFSA-regulated firms and listed groups should also read it to confirm their subsidiaries are exempt.

Our corporate lawyers in Dubai review Prescribed Company structures, confirm exempt status and coordinate the appointment of a Corporate Service Provider. This article covers the 2026 changes for Prescribed Companies only. Our article on holding company setup in Dubai compares the DIFC with ADGM, the mainland and other free zones.

The legal framework

• DIFC Companies Law, DIFC Law No. 5 of 2018. The Companies Law governs every DIFC company, including the rules on private companies, registered offices, accounts and annual filings that apply to Prescribed Companies.
• DIFC Prescribed Company Regulations, Consolidated Version No. 5. The amended Regulations, in force from 24 July 2026, set eligibility, the holding-only licence, the exemption categories, the Corporate Service Provider regime, the transitional period and the fines.
• DIFC Ultimate Beneficial Ownership Regulations. They require every DIFC company to identify and record the individuals who ultimately own or control it, and the DIFC publishes guidance on determining UBOs.
• DFSA-administered legislation. It applies where a Prescribed Company is used within a regulated structure, and it requires DFSA authorisation for any Financial Service.

The administering bodies:

• The DIFC Registrar of Companies. It incorporates Prescribed Companies, receives filings, grants extensions of the transitional period and imposes fines.
• The Corporate Service Provider. Under the 2026 Regulations, it acts as the company’s main administrative and compliance contact with the Registrar.

What changed on 24 July 2026

The amended Regulations removed the qualifying requirements that previously limited who could use a Prescribed Company. Before 24 July 2026, a Prescribed Company had to be controlled by a GCC person, a DIFC Registered Person or an Authorised Firm. The alternative was to serve a listed Qualifying Purpose, such as an aviation or crowdfunding structure.

Open eligibility

Any natural or corporate person may now establish or continue a Prescribed Company, provided the applicable requirements are met. The DIFC Authority’s Chief Legal Officer described the change as part of a responsive and business-friendly framework, with a service provider required in most cases.

A holding-only licence

The licence of a Prescribed Company is now limited to holding company activity. A Prescribed Company may hold shares, partnership interests, real estate, intellectual property and fund interests. It may not act as a fund, fund manager or general partner, and it may not carry on a Financial Service without DFSA authorisation.

Qualifying Purposes still matter

The Qualifying Purpose no longer decides who may use a Prescribed Company, but it still preserves two exemptions in the Regulations. A crowdfunding structure keeps relief from the fifty-shareholder limit for private companies. A structured financing vehicle that issues securities for a bond or sukuk keeps relief from the public offer prohibition and the same shareholder limit. Where a company relies on either exemption, its articles of association should record the Qualifying Purpose.

Continuing a company into the DIFC

The same open eligibility applies to continuation, which is the process of moving an existing company from another jurisdiction into the DIFC without dissolving it. A company registered offshore, for example in the British Virgin Islands or the Cayman Islands, may now continue into the DIFC as a Prescribed Company whatever the nationality of its owners. For a non-exempt company, the Corporate Service Provider lodges the continuation documents and pays the fees, so the provider must be engaged before the application is filed.

Which Prescribed Companies are exempt

The 2026 Regulations treat a Prescribed Company as exempt where it is controlled by one of four types of owner. An exempt company does not need a Corporate Service Provider, although it may appoint one voluntarily.

The four exempt owners

The first is a DIFC Registered Person, meaning a company or partnership registered in the DIFC, other than a Prescribed Variable Capital Company, a Foundation or another excluded entity. The second is a DFSA Authorised Firm. The third is a government entity, which now includes the government of a Recognised Jurisdiction and any entity in which a qualifying government holds at least 25%. The fourth is a publicly listed entity whose securities trade on an exchange in a Recognised Jurisdiction.

Who loses out

A Prescribed Company owned directly by an individual, a foreign trust or an offshore holding company is not exempt. The same applies to a Prescribed Company owned by a DIFC Foundation, because the 2026 Regulations removed Foundations from the definition of Registered Person. Families that hold a Prescribed Company through a Foundation should check this point first. Our article on DIFC Foundations for family offices explains how those structures are built.

What a Corporate Service Provider does

Under the 2026 Regulations, a non-exempt Prescribed Company must appoint a Corporate Service Provider licensed in the DIFC and notify the Registrar of the appointment in the prescribed form, with the provider’s consent. The provider’s address becomes the company’s registered office.

The provider lodges documents and fees with the Registrar, makes the required filings and keeps copies of the records the company must maintain. It carries out identity checks on shareholders and directors and holds the beneficial ownership information required under the DIFC UBO rules. The Registrar may rely on certifications given by the provider.

The directors keep their legal duties after the appointment, and the board remains responsible for the company’s accounts, annual confirmation statement and compliance with sanctions and anti-money laundering rules. A provider that stops acting for a company must notify the Registrar within ten days or face a fine of up to USD 2,000.

What a Prescribed Company may not do

The 2026 Regulations require a Prescribed Company to remain passive. It may not maintain a workforce through employees or any other arrangement, and it may not sponsor residence visas. Directors and third-party service providers are the only people who act for it.

A Prescribed Company may not be used to establish a fund in the DIFC without DFSA authorisation. A group that needs a regulated vehicle should use a fund structure or an authorised firm instead. Our article on co-investment vehicles in the DIFC and ADGM compares the options for pooled investment.

A company that needs staff, an office or trading activity should use an ordinary DIFC company. Our guide to DIFC business setup covers those licences.

Fines and the risk of losing Prescribed Company status

A Prescribed Company that fails to appoint a Corporate Service Provider within the transitional period faces a fine of up to USD 20,000. A company that fails to give its provider the documents and information the provider needs faces a fine of up to USD 100,000.

The larger risk is losing Prescribed Company status. A company that loses that status becomes subject to the rules for an ordinary DIFC private company, which can include physical premises in the DIFC, higher annual licence fees and fuller reporting. For a holding vehicle with no staff and no revenue, those costs can exceed the value of the structure.

Common mistakes under the new regime

Assuming Foundation ownership gives exemption. Under the earlier rules, control by a DIFC Foundation counted as control by a Registered Person. Under the 2026 Regulations a Foundation-owned Prescribed Company needs a service provider by 24 January 2027 unless another exemption applies.

Keeping a leased office as the registered office. A non-exempt Prescribed Company must use its service provider’s address. A company that keeps its own DIFC address on the register does not meet the new requirement.

Removing the Qualifying Purpose from the articles. A crowdfunding or structured financing vehicle that relies on the shareholder or public offer exemptions should keep its Qualifying Purpose recorded. Deleting it during a clean-up can remove the exemption.

Treating the service provider as the compliance function. The provider files and keeps records, but the directors remain liable for accounts, UBO accuracy and sanctions compliance. A board that stops reviewing these matters keeps the legal risk.

Ignoring ownership changes. A transfer of shares to a family member, a trust or an offshore company can end exempt status. The company should check its status before every change of control.

What owners of Prescribed Companies should do next

• Confirm who controls each company. Trace ownership to the top of the structure, because exempt status depends on the controlling owner.
• Test each company against the four exemptions. Record the result in writing, with the evidence, so the board can show the Registrar why no provider was appointed.
• Appoint a provider before 24 January 2027. Allow time for the provider’s identity checks on shareholders and directors, which must finish before the appointment is notified.
• Move the registered office. Change the registered office to the provider’s address, or to an affiliate’s address for an exempt company.
• Review the articles of association. Keep any Qualifying Purpose the company relies on, and remove activities that go beyond holding.
• Apply for an extension early if needed. Ask the Registrar for more time before the deadline rather than after it.

What should DIFC Prescribed Company owners do before the January 2027 deadline?

Owners of a DIFC Prescribed Company formed before 24 July 2026 should confirm whether it is exempt and, if it is not, appoint a Corporate Service Provider by 24 January 2027. The new Regulations make the vehicle available to any owner, but they also make the service provider the company’s link with the Registrar.

The main risk is in structures whose owners assume nothing has changed. Prescribed Companies owned by Foundations, individuals and offshore holding companies all need a provider, and the board of each one has to act before the deadline.

The commercial consequence of inaction is a fine and, more seriously, the loss of Prescribed Company status. A holding vehicle that becomes an ordinary DIFC company carries office, fee and reporting costs it was never designed to bear.

For owners of DIFC holding structures, our corporate and commercial team advises on Prescribed Company eligibility, exempt status reviews and the transition to a Corporate Service Provider.

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