DIFC: New Prescribed Company Regulations and Active Enterprise Commercial Package

The Dubai International Financial Centre (DIFC) has recently enacted significant updates to the Prescribed Companies Regulations, effective July 15, 2024.

These amendments aim to expand and simplify the current regulations, introducing two new options designed to enhance business operations within the DIFC:

1. Prescribed Company – Passive Holding

The Prescribed Company – company-passive holding is a corporate entity established under the updated DIFC Prescribed Companies Regulations. This entity is designed primarily for holding activities and has specific limitations and requirements:

• Purpose: It is intended to hold assets and cannot have employees or engage in operational activities beyond its defined holding purposes.
• Qualifying Criteria: These companies can be established if they are controlled by GCC citizens, entities controlled by GCC citizens, Authorized Firms, or DIFC-registered persons. They can also be established to hold GCC registrable assets or for specific qualifying purposes.
• Restrictions: The regulations ensure that Prescribed Companies are used as true holding vehicles rather than operational entities, thus they cannot employ staff or engage in active business operations (DIFC)

2. Commercial Package – Active Enterprise

The Commercial Package – Active Enterprise is a new option under the updated DIFC regulations designed to accommodate more active business operations. Key features include:

Purpose: This package allows companies to engage in various business activities, including holding company activities, managing offices, and proprietary investment activities.

Employee Permitted: Unlike the Passive Holding option, entities under this package can employ staff, providing greater flexibility for operational needs.

Cost Benefits: Companies under this package benefit from subsidized licensing and registration fees, similar to the Passive Holding option, making it a cost-effective solution for businesses looking to operate actively within the DIFC (DIFC) 

Key Changes and Implications of the New Regulations in DIFC

1. Broadened Qualifying Criteria: The criteria for establishing a Prescribed Company have been expanded and simplified. The new regulations allow the establishment of a Prescribed Company if GCC citizens or entities, an Authorized Firm, or a DIFC-registered person control it. It can also be established for holding GCC registrable assets or for qualifying purposes. However, Prescribed Companies under the new regime cannot employ staff and are restricted to holding company activities unless set up for qualifying purposes.
2. Active Enterprise Commercial Package: Unlike the Prescribed Company, the Active Enterprise option permits the employment of staff and allows for more diverse activities. Companies under this option can engage in holding company activities, managing offices, and proprietary investment activities. This package provides flexibility and supports a broader range of business operations.
3. Cost Benefits: Both options offer subsidized DIFC license and registration fees. The application fee is set at USD 100 (one-time), with an annual commercial license fee of USD 1,000. Data protection fees, where applicable, amount to USD 750. These cost benefits make DIFC an attractive jurisdiction for businesses looking to optimize operational costs.
4. Transitional Provisions: Entities that no longer meet the qualifying criteria under the updated Prescribed Company Regulations will continue to benefit from the discounted license fee of USD 1,000 for the next two years. After this period, the full DIFC license fees will apply unless the entity qualifies under the Active Enterprise commercial package.

Enhanced Access and Compliance 

The updates aim to open access to a global base of applicants while maintaining a strong nexus to the DIFC and the GCC region. Enhanced AML procedures and ongoing risk management methodologies are being updated to accommodate the increased demand and ensure compliance with international standards.

The introduction of these new regulations and packages underscores DIFC’s commitment to providing a flexible, cost-effective, and robust legal and regulatory framework that meets global best practices while catering to the unique needs of businesses in the region.

For more detailed information, you can visit the DIFC website

Get in Touch with EZONE

For businesses looking to understand how these changes might impact their operations or for assistance in establishing a Prescribed Company or leveraging the Active Enterprise Commercial Package, contact EZONE, one of the best business setup consultants in Dubai, for expert guidance and support.

Our team is well-versed in the latest DIFC regulations and can help you navigate the new requirements smoothly.

Visit the EZONE office or reach out directly to discuss your specific needs and ensure your business takes full advantage of the benefits offered by the updated DIFC regulations.