Difc Revamps Prescribed Company Regime To Enhance Real Estate Ownership Flexibility

By Author: The Law Reporters
Total Articles: 36
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On July 15, 2024, the Dubai International Financial Centre (DIFC) introduced significant changes to its Prescribed Company (PC) regime through amendments to the Prescribed Companies Regulations 2024. These changes aim to streamline and broaden the framework for establishing a PC, offering more flexibility for individuals and entities seeking to hold real property in Dubai and across the GCC.

Key Features of the New Regime

Under the revised PC Regulations, any party intending to own or control one or more registrable assets within the GCC can now form a Prescribed Company. Registrable assets include properties or property interests that require formal registration with a GCC authority to establish legal ownership, secure rights, or claims, and provide public notice of such interests.

This new approach simplifies the process of forming a PC and opens the door to a broader range of asset holders who want a more streamlined structure for property ownership in the region.

Streamlined Formation and Grace Period

To support this transition, the DIFC has introduced a six-month grace period that begins ...
... once a Prescribed Company is established. During this time, shareholders are allowed to finalize the acquisition of real estate or other GCC registrable assets. The documentation confirming the acquisition must then be submitted to the DIFC.

This grace period ensures a smooth process, allowing the company to be formed first, followed by asset acquisition, with the administrative support of a licensed Corporate Service Provider (CSP) within the DIFC.

Advantages of the PC Structure

Although there are existing structures like foundations and trusts in the UAE that can hold real estate, the updated PC regime offers several distinct advantages. A key benefit is the opportunity to operate within the DIFC’s common law jurisdiction, known for its business-friendly environment, low fees, and simplified processes.

Additionally, PCs can use licensed CSPs to provide a registered office within the DIFC, further simplifying administrative procedures and reducing the regulatory burden for asset holders.

Conclusion

The revamped PC regime offers a highly efficient and flexible option for real estate ownership across the GCC. By providing a straightforward structure for holding assets, along with the benefits of the DIFC’s legal framework, it has the potential to attract more international investors and simplify the process of acquiring and managing property in Dubai.

As the real estate market in Dubai continues to evolve, this new regime offers a modern solution to meet the growing demand for streamlined ownership structures in the region.