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by Anne Agbo , j.awan & partners | Regulatory Briefing
The Prescribed Company has, since 2019, been one of the most cost-efficient passive holding vehicles available in the UAE. It combines a common law framework, access to the DIFC Courts and no requirement to lease premises, at a licence cost measured in hundreds rather than thousands of dollars. Yet for most of its life, the vehicle has been available only to those able to satisfy an eligibility test built around a UAE or GCC connection or a narrowly defined qualifying purpose.
The Prescribed Company Regulations 2026 (Consolidated Version No. 5), in force from 24 July 2026 and published on the DIFC Legal Database¹, remove that test entirely. At first glance, this may appear to be a straightforward liberalisation. In reality, it reflects a deliberate change in regulatory philosophy. The DIFC has moved from controlling who may enter the regime to controlling how the regime is administered once inside, and it has placed the Corporate Service Provider at the centre of that oversight.
What has been removed?
Under the 2024 Regulations, an applicant was required to be controlled by a GCC Person, a Registered Person or an Authorised Firm, to hold a GCC Registrable Asset, to pursue one of five Qualifying Purposes, or to appoint a director employed by a CSP holding an arrangement with the Registrar. Family offices, funds and corporate groups without a regional footprint frequently found that none of these routes fitted.
The 2026 Regulations contain no qualifying requirements at all. Regulation 3.3 provides simply that an application is made to the Registrar in the prescribed form with the documentation required for a Private Company, so that any natural or corporate person, wherever resident, may establish or continue a Prescribed Company. A European family office consolidating non-UAE investments, or an Asian group seeking a neutral holding platform for a cross-border joint venture, no longer needs to construct a regional nexus to qualify.
The defined terms Crowdfunding Structure and Structured Financing survive, because Regulation 3.2 continues to rely on them for the exemptions from the fifty-shareholder limit and the public offer prohibition in the Companies Law. What has been removed is their role as a gateway, not their relevance to those structures.
In Consultation Paper No. 1 of 2026, the DIFC Authority explained that, given the UAE's corporate tax regime and its adherence to the OECD Common Reporting Standard and US FATCA, opening the regime to all applicants was now considered appropriate from a risk perspective². The 2026 amendments follow earlier updates to the regime in 2020, 2022 and 2024.
How this compares with ADGM
This development is best understood alongside the ADGM, whose Special Purpose Vehicle regime remains a well-established alternative. The two regimes now share a strikingly similar architecture: a passive private company with no employees and no leased premises, a registered office within the free zone and, for most vehicles, a mandatory licensed service provider.
The principal point of divergence is nexus. The ADGM Registration Authority's Guidance Note on Special Purpose Vehicles, issued under section 28 of the ADGM Commercial Licensing Regulations 2015, continues to require every SPV applicant to demonstrate an appropriate connection to the ADGM, the UAE or the GCC region, whether through ownership, asset location, economic benefit to the UAE or a securities listing, assessed on a case-by-case basis³. An SPV intended for a purpose with no connection to the UAE or GCC does not acquire that nexus merely by appointing a UAE-based service provider. The DIFC no longer applies any such test.
A second, less-noticed divergence concerns the exemptions themselves. The ADGM exemption from the service provider requirement is drawn by reference to the Commercial Licensing Regulations 2015 (Exemptions) Order 2020 and covers authorised persons under the Financial Services and Markets Regulations 2015, entities licensed or regulated by the Central Bank of the UAE, companies listed on a regulated market in the UAE, and companies demonstrating adequate UAE presence. The DIFC categories are drawn differently. A group exempt in one centre should not assume it is exempt in the other.
For clients with genuine regional ties, both centres remain viable and the choice will turn on exemption criteria, disclosure options, audit thresholds and cost. For clients with no regional connection at all, the DIFC Prescribed Company has become the more directly accessible option.
The compliance framework that replaces the eligibility test
Broader access has been accompanied by a formalised compliance framework. Regulation 3.1.1 requires every Prescribed Company that is not an Exempt PC, meaning one whose Controller is a Registered Person, an Authorised Firm, a Government Entity or a Publicly Listed Entity, to appoint a Corporate Service Provider registered with the DFSA as a Designated Non-Financial Business or Profession.
Regulation 5.1.1 sets out the CSP's statutory duties: lodging every document, form and fee required for incorporation or continuation; providing every document, notice and filing the company is required to submit to the Registrar; and maintaining copies of all records the company must keep, regularly updated and readily accessible to the Registrar. Regulation 5.1.5 authorises the CSP to represent the company in its dealings with the Registrar and permits the Registrar to communicate with the CSP alone. Regulation 4.1.1 requires a non-exempt Prescribed Company to use its CSP's Registered Office, with an Exempt PC permitted to use that of an Affiliate, subject in each case to written consent.
The obligation is reciprocal. Regulation 5.1.2 requires the company to make available to its CSP the documents and information needed to discharge these duties, and Appendix 2 sets the maximum fine for failure at USD 100,000.
Under Regulation 5.3, the Registrar may require information, documents or access to premises from a CSP, may inform the DFSA of conduct that may breach the CSP's duties under DFSA-administered legislation, and may refer suspected criminal offences by a CSP or its clients to law enforcement. Regulation 3.1.3 gives non-exempt Prescribed Companies incorporated before 24 July 2026 six months, to 24 January 2027, to appoint a CSP, failing which the USD 20,000 fine in Appendix 2 applies and, under Regulation 6, the Registrar may revoke Prescribed Company status altogether.
CSP liability: allocated, but not removed
The question of CSP liability deserves particular attention, and the Regulations address it directly. Regulation 4.5.2 provides that any report, disclosure or confirmation made by a CSP on behalf of a Prescribed Company is made as the company's agent, that the CSP may require self-certification of the content by the board, and that the CSP shall not be liable to the Registrar where it has acted with due care in ensuring the contents are correct and has not omitted any material facts or circumstances of which it is aware or ought reasonably to be aware.
This is a workable allocation of responsibility, and one that CSPs already operating under the ADGM regime, which has required a licensed service provider for non-exempt SPVs since 12 July 2021, will recognise.
It is not, however, a safe harbour. A CSP that submits a confirmation without verifying the underlying facts, or without a documented record of what it checked, will struggle to demonstrate due care. Robust onboarding, periodic refresh of beneficial ownership information and a clear audit trail for every filing are now the foundation of the CSP's own regulatory position. Regulation 5.2.4 reinforces the point by requiring a CSP that ceases to act to retain the company's records for six years thereafter.
What has not changed
It is equally important to be clear about what has not changed. Regulation 3.5.2 restricts the licence of a Prescribed Company to the activity of a holding company, and Regulation 4.3 provides that it shall not maintain a workforce, whether through Employees or any other arrangement. It may still appoint directors and engage third-party advisers.
On regulated activity, Regulation 1.1.4 confirms that nothing in the Regulations exempts a Prescribed Company from DFSA-administered legislation, and Regulation 3.2.1 provides that a Prescribed Company shall not be used to establish a Fund in the DIFC without DFSA authorisation. The practical reading, consistent with the Consultation Paper, is that a Prescribed Company may sit within a structure connected with Financial Services provided the DFSA framework is respected. The DIFC also indicated at its briefing that where a DIFC CSP incorporates or administers Prescribed Companies on behalf of non-DIFC firms, commonly described as white-labelling, additional due diligence obligations apply. That expectation is not set out in the Regulations themselves, but it follows naturally from the agent liability standard in Regulation 4.5.2: a CSP operating such arrangements should treat the introducer's clients as its own for verification purposes and ensure that any reliance placed on a third party is documented and defensible.
Two operational developments
Two operational developments accompany the legal changes. The DIFC has stated that complete applications will be reviewed within 24 hours of submission, supported by automated verification, a stated service expectation rather than a statutory commitment.
The DIFC has also introduced a CSP Dashboard through which a registered CSP can manage its portfolio of Prescribed Companies, Foundations and other entities from a single platform, with consolidated entity data, regulatory alerts, multi-user access under administrator-controlled permissions and the ability to make payments on behalf of clients. For a CSP administering a growing book of entities, this supports precisely the kind of internal delegation and oversight that the new duties demand.
What to do before 24 January 2027
For an existing Prescribed Company, four questions are worth answering now:
Does it qualify as an Exempt PC under the definition as drafted? Check the Controller against the categories, and check whether the Registered Person route is available at all; a Foundation-held structure will usually need a CSP.
If a CSP is already appointed, does the existing scope of services cover the new statutory duties? An engagement drafted for incorporation and annual filings may not cover record maintenance, regulatory notification and Registrar correspondence as the Regulations now define them.
Are the registered office arrangements consistent with the new framework, and is the required written consent in place?
Would the filing record demonstrate due care if it were tested? For CSPs, this is the question the liability standard in Regulation 4.5.2 ultimately asks.
Conclusion
For clients, the practical conclusion is that the DIFC Prescribed Company has become a genuinely international SPV option, no longer dependent on a regional connection, but one that in most cases will require a CSP from the outset. For CSPs, the compliance burden has moved from the front door to the ongoing relationship, bringing with it statutory status, inspection exposure and a liability standard tied to due care. The 2026 Regulations therefore do more than widen the regime. They increasingly distinguish CSPs that merely file from those that genuinely govern the entities in their care.
J. Awan & Partners is a licensed Corporate Service Provider in both the ADGM and the DIFC and provides governance, risk, compliance and finance services across the GCC. The firm assists clients in assessing Exempt PC status, selecting the appropriate jurisdiction, and establishing and administering Prescribed Companies and ADGM SPVs in compliance with the amended Regulations.
Bibliography
Legislation
Commercial Licensing Regulations 2015 (ADGM)
Commercial Licensing Regulations 2015 (Exemptions) Order 2020 (ADGM)
Companies Law, DIFC Law No 5 of 2018
Financial Services and Markets Regulations 2015 (ADGM)
Prescribed Company Regulations 2026 (DIFC), Consolidated Version No 5
Secondary sources
ADGM Registration Authority, Guidance Note on Special Purpose Vehicles (issued under the Commercial Licensing Regulations 2015 (ADGM), s 28)
ADGM, 'Special Purpose Vehicles (SPVs)' <https://www.adgm.com/setting-up/special-purpose-vehicles> accessed 28 September 2026
DIFC, 'DIFC Announces Consultation of Amended Prescribed Company Regulations' (DIFC, 30 April 2026) <https://www.difc.com/whats-on/news/difc-announces-consultation-of-amended-prescribed-company-regulations> accessed 28 September 2026
DIFC, 'DIFC Legal Database' <https://www.difc.com/business/laws-and-regulations/legal-database> accessed 28 September 2026
DIFC Authority, Consultation Paper No 1 of 2026 (30 April 2026)
Broader Access for Clients, Greater Responsibility for CSPs: The 2026 Amendments to the DIFC Prescribed Company Regime
From 24 July 2026, the DIFC Prescribed Company is open to applicants worldwide, with no UAE or GCC connection required. In return, most Prescribed Companies must now appoint a DFSA-registered Corporate Service Provider, which takes on new statutory duties. We explain what has changed, how the regime compares with the ADGM SPV, and what existing companies should do before 24 January 2027.
Broader Access for Clients, Greater Responsibility for CSPs: The 2026 Amendments to the DIFC Prescribed Company Regime
From 24 July 2026, the DIFC Prescribed Company is open to applicants worldwide, with no UAE or GCC connection required. In return, most Prescribed Companies must now appoint a DFSA-registered Corporate Service Provider, which takes on new statutory duties. We explain what has changed, how the regime compares with the ADGM SPV, and what existing companies should do before 24 January 2027.
by Anne Agbo , j.awan & partners | Regulatory Briefing
The Prescribed Company has, since 2019, been one of the most cost-efficient passive holding vehicles available in the UAE. It combines a common law framework, access to the DIFC Courts and no requirement to lease premises, at a licence cost measured in hundreds rather than thousands of dollars. Yet for most of its life, the vehicle has been available only to those able to satisfy an eligibility test built around a UAE or GCC connection or a narrowly defined qualifying purpose.
The Prescribed Company Regulations 2026 (Consolidated Version No. 5), in force from 24 July 2026 and published on the DIFC Legal Database¹, remove that test entirely. At first glance, this may appear to be a straightforward liberalisation. In reality, it reflects a deliberate change in regulatory philosophy. The DIFC has moved from controlling who may enter the regime to controlling how the regime is administered once inside, and it has placed the Corporate Service Provider at the centre of that oversight.
What has been removed?
Under the 2024 Regulations, an applicant was required to be controlled by a GCC Person, a Registered Person or an Authorised Firm, to hold a GCC Registrable Asset, to pursue one of five Qualifying Purposes, or to appoint a director employed by a CSP holding an arrangement with the Registrar. Family offices, funds and corporate groups without a regional footprint frequently found that none of these routes fitted.
The 2026 Regulations contain no qualifying requirements at all. Regulation 3.3 provides simply that an application is made to the Registrar in the prescribed form with the documentation required for a Private Company, so that any natural or corporate person, wherever resident, may establish or continue a Prescribed Company. A European family office consolidating non-UAE investments, or an Asian group seeking a neutral holding platform for a cross-border joint venture, no longer needs to construct a regional nexus to qualify.
The defined terms Crowdfunding Structure and Structured Financing survive, because Regulation 3.2 continues to rely on them for the exemptions from the fifty-shareholder limit and the public offer prohibition in the Companies Law. What has been removed is their role as a gateway, not their relevance to those structures.
In Consultation Paper No. 1 of 2026, the DIFC Authority explained that, given the UAE's corporate tax regime and its adherence to the OECD Common Reporting Standard and US FATCA, opening the regime to all applicants was now considered appropriate from a risk perspective². The 2026 amendments follow earlier updates to the regime in 2020, 2022 and 2024.
How this compares with ADGM
This development is best understood alongside the ADGM, whose Special Purpose Vehicle regime remains a well-established alternative. The two regimes now share a strikingly similar architecture: a passive private company with no employees and no leased premises, a registered office within the free zone and, for most vehicles, a mandatory licensed service provider.
The principal point of divergence is nexus. The ADGM Registration Authority's Guidance Note on Special Purpose Vehicles, issued under section 28 of the ADGM Commercial Licensing Regulations 2015, continues to require every SPV applicant to demonstrate an appropriate connection to the ADGM, the UAE or the GCC region, whether through ownership, asset location, economic benefit to the UAE or a securities listing, assessed on a case-by-case basis³. An SPV intended for a purpose with no connection to the UAE or GCC does not acquire that nexus merely by appointing a UAE-based service provider. The DIFC no longer applies any such test.
A second, less-noticed divergence concerns the exemptions themselves. The ADGM exemption from the service provider requirement is drawn by reference to the Commercial Licensing Regulations 2015 (Exemptions) Order 2020 and covers authorised persons under the Financial Services and Markets Regulations 2015, entities licensed or regulated by the Central Bank of the UAE, companies listed on a regulated market in the UAE, and companies demonstrating adequate UAE presence. The DIFC categories are drawn differently. A group exempt in one centre should not assume it is exempt in the other.
For clients with genuine regional ties, both centres remain viable and the choice will turn on exemption criteria, disclosure options, audit thresholds and cost. For clients with no regional connection at all, the DIFC Prescribed Company has become the more directly accessible option.
The compliance framework that replaces the eligibility test
Broader access has been accompanied by a formalised compliance framework. Regulation 3.1.1 requires every Prescribed Company that is not an Exempt PC, meaning one whose Controller is a Registered Person, an Authorised Firm, a Government Entity or a Publicly Listed Entity, to appoint a Corporate Service Provider registered with the DFSA as a Designated Non-Financial Business or Profession.
Regulation 5.1.1 sets out the CSP's statutory duties: lodging every document, form and fee required for incorporation or continuation; providing every document, notice and filing the company is required to submit to the Registrar; and maintaining copies of all records the company must keep, regularly updated and readily accessible to the Registrar. Regulation 5.1.5 authorises the CSP to represent the company in its dealings with the Registrar and permits the Registrar to communicate with the CSP alone. Regulation 4.1.1 requires a non-exempt Prescribed Company to use its CSP's Registered Office, with an Exempt PC permitted to use that of an Affiliate, subject in each case to written consent.
The obligation is reciprocal. Regulation 5.1.2 requires the company to make available to its CSP the documents and information needed to discharge these duties, and Appendix 2 sets the maximum fine for failure at USD 100,000.
Under Regulation 5.3, the Registrar may require information, documents or access to premises from a CSP, may inform the DFSA of conduct that may breach the CSP's duties under DFSA-administered legislation, and may refer suspected criminal offences by a CSP or its clients to law enforcement. Regulation 3.1.3 gives non-exempt Prescribed Companies incorporated before 24 July 2026 six months, to 24 January 2027, to appoint a CSP, failing which the USD 20,000 fine in Appendix 2 applies and, under Regulation 6, the Registrar may revoke Prescribed Company status altogether.
CSP liability: allocated, but not removed
The question of CSP liability deserves particular attention, and the Regulations address it directly. Regulation 4.5.2 provides that any report, disclosure or confirmation made by a CSP on behalf of a Prescribed Company is made as the company's agent, that the CSP may require self-certification of the content by the board, and that the CSP shall not be liable to the Registrar where it has acted with due care in ensuring the contents are correct and has not omitted any material facts or circumstances of which it is aware or ought reasonably to be aware.
This is a workable allocation of responsibility, and one that CSPs already operating under the ADGM regime, which has required a licensed service provider for non-exempt SPVs since 12 July 2021, will recognise.
It is not, however, a safe harbour. A CSP that submits a confirmation without verifying the underlying facts, or without a documented record of what it checked, will struggle to demonstrate due care. Robust onboarding, periodic refresh of beneficial ownership information and a clear audit trail for every filing are now the foundation of the CSP's own regulatory position. Regulation 5.2.4 reinforces the point by requiring a CSP that ceases to act to retain the company's records for six years thereafter.
What has not changed
It is equally important to be clear about what has not changed. Regulation 3.5.2 restricts the licence of a Prescribed Company to the activity of a holding company, and Regulation 4.3 provides that it shall not maintain a workforce, whether through Employees or any other arrangement. It may still appoint directors and engage third-party advisers.
On regulated activity, Regulation 1.1.4 confirms that nothing in the Regulations exempts a Prescribed Company from DFSA-administered legislation, and Regulation 3.2.1 provides that a Prescribed Company shall not be used to establish a Fund in the DIFC without DFSA authorisation. The practical reading, consistent with the Consultation Paper, is that a Prescribed Company may sit within a structure connected with Financial Services provided the DFSA framework is respected. The DIFC also indicated at its briefing that where a DIFC CSP incorporates or administers Prescribed Companies on behalf of non-DIFC firms, commonly described as white-labelling, additional due diligence obligations apply. That expectation is not set out in the Regulations themselves, but it follows naturally from the agent liability standard in Regulation 4.5.2: a CSP operating such arrangements should treat the introducer's clients as its own for verification purposes and ensure that any reliance placed on a third party is documented and defensible.
Two operational developments
Two operational developments accompany the legal changes. The DIFC has stated that complete applications will be reviewed within 24 hours of submission, supported by automated verification, a stated service expectation rather than a statutory commitment.
The DIFC has also introduced a CSP Dashboard through which a registered CSP can manage its portfolio of Prescribed Companies, Foundations and other entities from a single platform, with consolidated entity data, regulatory alerts, multi-user access under administrator-controlled permissions and the ability to make payments on behalf of clients. For a CSP administering a growing book of entities, this supports precisely the kind of internal delegation and oversight that the new duties demand.
What to do before 24 January 2027
For an existing Prescribed Company, four questions are worth answering now:
Does it qualify as an Exempt PC under the definition as drafted? Check the Controller against the categories, and check whether the Registered Person route is available at all; a Foundation-held structure will usually need a CSP.
If a CSP is already appointed, does the existing scope of services cover the new statutory duties? An engagement drafted for incorporation and annual filings may not cover record maintenance, regulatory notification and Registrar correspondence as the Regulations now define them.
Are the registered office arrangements consistent with the new framework, and is the required written consent in place?
Would the filing record demonstrate due care if it were tested? For CSPs, this is the question the liability standard in Regulation 4.5.2 ultimately asks.
Conclusion
For clients, the practical conclusion is that the DIFC Prescribed Company has become a genuinely international SPV option, no longer dependent on a regional connection, but one that in most cases will require a CSP from the outset. For CSPs, the compliance burden has moved from the front door to the ongoing relationship, bringing with it statutory status, inspection exposure and a liability standard tied to due care. The 2026 Regulations therefore do more than widen the regime. They increasingly distinguish CSPs that merely file from those that genuinely govern the entities in their care.
J. Awan & Partners is a licensed Corporate Service Provider in both the ADGM and the DIFC and provides governance, risk, compliance and finance services across the GCC. The firm assists clients in assessing Exempt PC status, selecting the appropriate jurisdiction, and establishing and administering Prescribed Companies and ADGM SPVs in compliance with the amended Regulations.
Bibliography
Legislation
Commercial Licensing Regulations 2015 (ADGM)
Commercial Licensing Regulations 2015 (Exemptions) Order 2020 (ADGM)
Companies Law, DIFC Law No 5 of 2018
Financial Services and Markets Regulations 2015 (ADGM)
Prescribed Company Regulations 2026 (DIFC), Consolidated Version No 5
Secondary sources
ADGM Registration Authority, Guidance Note on Special Purpose Vehicles (issued under the Commercial Licensing Regulations 2015 (ADGM), s 28)
ADGM, 'Special Purpose Vehicles (SPVs)' <https://www.adgm.com/setting-up/special-purpose-vehicles> accessed 28 September 2026
DIFC, 'DIFC Announces Consultation of Amended Prescribed Company Regulations' (DIFC, 30 April 2026) <https://www.difc.com/whats-on/news/difc-announces-consultation-of-amended-prescribed-company-regulations> accessed 28 September 2026
DIFC, 'DIFC Legal Database' <https://www.difc.com/business/laws-and-regulations/legal-database> accessed 28 September 2026
DIFC Authority, Consultation Paper No 1 of 2026 (30 April 2026)