The Dubai International Financial Centre (DIFC) is a leading financial hub in the Middle East, Africa, and South Asia (MEASA) region and ranks among the top 10 global financial centers. With over 5,000 registered firms and 40,000 professionals, DIFC offers a robust legal system, a global financial exchange, and a business-friendly ecosystem.

For nearly 20 years, DIFC has facilitated investment and trade flows across MEASA—a region with a population of 3 billion and a nominal GDP of $8 trillion.

What Are the New DIFC SPV Regulations?

The DIFC SPV Regulations introduce a flexible framework for Special Purpose Vehicles (SPVs), addressing a gap in the previous Prescribed Companies (PC) regime, which required a Qualifying Applicant or Qualifying Purpose.

Under the new rules, SPVs can be established by:

• Qualifying Applicants (GCC nationals, DIFC entities, etc.)
• For a Qualifying Purpose (aviation, maritime, IP, crowdfunding, structured finance)
• To hold GCC-registrable assets
• Via a DIFC Corporate Service Provider (CSP) for substance requirements

This allows greater flexibility—for example, an Indian investor can set up a DIFC SPV to hold African assets by engaging a DIFC-registered CSP.

Active Enterprises vs. Prescribed Companies

Since SPVs cannot have employees, DIFC introduced Active Enterprises for businesses needing operational presence (e.g., holding companies, investment firms, managing offices).

What Are DIFC SPVs?

Special Purpose Vehicles (SPVs) in the DIFC are legal entities designed primarily for holding and managing assets while isolating liabilities and financial risks. These passive holding companies are widely used for a variety of purposes, such as holding real estate, shares, and private investments. SPVs are also commonly utilized in structuring complex assets like aviation and maritime holdings. Additionally, they are effective for managing intellectual property (IP) and can play a significant role in structured finance and crowdfunding. By segregating assets and liabilities, DIFC SPVs provide a flexible and secure solution for various financial activities and investments.

Why Set Up a DIFC SPV?

Setting up a Special Purpose Vehicle (SPV) in the DIFC offers numerous benefits that make it an attractive option for individuals and businesses. First, it is cost-effective, with a one-time application fee of just $100 and an annual license fee of $1,000, making it accessible for companies of various sizes. The DIFC also provides flexibility in office options. You can lease office space within the DIFC, share space with an affiliate, or use a Registered Agent (Corporate Service Provider) like Corpin Consultants to handle the administrative aspects, ensuring a hassle-free setup.

Another significant advantage is the DIFC’s common law jurisdiction, which operates with English-language courts and a legal framework familiar to international businesses. The DIFC’s legal structure provides a solid foundation for your SPV, offering both stability and predictability. The setup process is quick and efficient, typically taking only 3 to 5 business days to complete, with fast-track approvals to ensure that your business can start operating without unnecessary delays. This makes the DIFC an ideal choice for those looking for swift and reliable company formation.

DIFC SPVs also offer tax efficiency and flexibility, with corporate tax rates ranging from 0% to 9%, depending on your specific qualifications. There are no restrictions on foreign ownership, and the DIFC has no currency controls, allowing for free capital repatriation. Furthermore, DIFC SPVs can hold assets globally, including property in Dubai, subject to certain conditions regarding the GCC dominance in the asset portfolio. This global asset holding capability, combined with tax benefits and ease of setup, makes the DIFC a compelling option for businesses looking to manage financial risks and assets efficiently.

Use Cases for DIFC SPVs

DIFC SPVs are versatile entities with a wide range of use cases. They are commonly used for holding intellectual property (IP), providing a secure structure for managing and protecting valuable assets. SPVs are also ideal for asset protection and ring-fencing, isolating liabilities and risks from the parent company. They play a crucial role in structuring Employee Stock Option Plans (ESOPs), facilitating the distribution of stock options to employees. Additionally, DIFC SPVs are frequently used in real estate holding structures and for structured finance transactions, including sukuk issuances, offering flexibility and efficiency in managing complex financial arrangements.

Can a DIFC SPV Hold Property?

Yes!

Within the UAE

• SPVs can own property in designated Dubai freehold areas (e.g., Palm Jumeirah, Downtown Dubai, Business Bay).
• Transfer fees can be reduced from 4% to 0.125% if beneficial ownership remains unchanged.

Outside the UAE

• SPVs can hold global assets, provided most assets are GCC-based.

Who Can Establish a DIFC SPV?

A DIFC SPV can be established by several types of entities and individuals. This includes GCC persons such as citizens, GCC-listed firms, and government entities. Existing DIFC entities that are already registered in the center can also set up an SPV. Additionally, DFSA-regulated entities, known as authorized firms, have the ability to establish a DIFC SPV. For those who do not fall into any of these categories, a DIFC Corporate Service Provider (CSP) can assist in setting up the SPV, ensuring that the process remains accessible and efficient for a broader range of clients.

Setup Process

The setup process for a DIFC SPV involves several key steps. First, required documentation such as Know Your Customer (KYC) details and shareholder information must be provided. Next, a registered address is needed, which can be obtained through a Corporate Service Provider (CSP) or by leasing office space. Once the necessary documents are in place, they are submitted to the DIFC Registrar for review. The approval and incorporation process typically takes 3 to 5 business days, ensuring a quick and efficient setup.

Key Features

No local director requirement (can use CSP nominee)
No physical presence needed (fully digital onboarding)
Perpetual existence (no expiry)
Sharia-compliant structures allowed

Compliance Requirement

DIFC SPVs must adhere to certain compliance requirements to maintain their status. This includes submitting annual accounts, although structured finance SPVs may be exempt from auditing. Additionally, a Confirmation Statement is required annually, with a fee of $300 per year. Depending on the nature of the SPV, Economic Substance Reporting (ESR) may also apply, ensuring compliance with local and international regulations. These requirements help maintain transparency and regulatory adherence for DIFC SPVs.

How Corpin Consultants Can Help

As a DIFC-registered Corporate Service Provider (CSP), Corpin Consultants offers comprehensive support for setting up and managing your DIFC SPV. We specialize in SPV structuring and setup, providing registered office services, and offering nominee director and compliance assistance. Our team also delivers expert legal and tax advisory to ensure your SPV operates efficiently and in compliance with all relevant regulations.

Contact Corpin Consultants today for a custom