The new DIFC Prescribed Company - It changes everything!

The Riffle

You can now make a PC even if you are not a qualifying applicant or you do not have a qualifying purpose - opening doors to many new structuring possibilities - all at a friendly price point.

The new DIFC PC Regs addresses a significant gap in the offerings from the center, where there was no product comparable to the SPV regimes that existed in many comparable jurisdictions. The earlier PC regime required a Qualifying Applicant or a Qualifying Purpose, both of which tied in the product to existing DIFC clients.

Under the new regime, PCs can be established by qualifyingapplicants (GCC Persons, DIFC Persons etc.), for a qualifyingpurpose (aviation, maritime, IP, crowdfunding and structured finance), to holdGCC-registrable assets, or, in case none of these apply, through a DIFC Corporate Service Provider so as to provide the required substance.

In essence, this brings a new level of flexibility to the offering – for instance, you can now form a PC if you are from India, to hold an asset in Africa, by appointing a CSP at the DIFC.

Since the Prescribed Company cannot have employees, the DIFC has spun off the Qualifying Applicant bit into a different product called Active Enterprises. One can set up Holding Companies, ProprietaryInvestment Companies and ManagingOffices as an Active Enterprise, with visa options, provided that one has a tie-in to the center already. 

PCs are pretty cost-effective, with DIFC fees as low as US$ 100 as a one-time fee for applications and US$ 1,000 as license fees on an annual basis. Additional fees would include annual filing of the ConfirmationStatement (US$ 300) and CSP professionalfees.

Want the complete lowdown? Read our detailed article on Prescribed Companies in the DIFC here.

The endnote

Structuring a holding entity in a Common Law tax friendly jurisdiction is a no-brainer, and the DIFC just made it easier by providing more flexibility on who can setup a PC, and why.

So, what are you waiting for?