When setting up a business in the Dubai International Financial Centre (DIFC), choosing the right company structure is critical. It can significantly influence factors such as asset protection and operational efficiency.
DIFC offers a variety of structures tailored to different business needs, including Special Purpose Vehicles (SPV), also known as DIFC Prescribed Companies – a passive company structure for holding assets, and Active Enterprises for full-scale operations.
We spoke to Khadija Ali, DIFC’s Chief Representative for Business Development, to explain the advantages of each structure, the ease of setup process and why DIFC stands out as a premier financial hub.
1. Hi Khadija, thanks for joining me today. I’d like to begin by looking at why choosing the right company structure is so important. Could you explain why it’s something businesses based in DIFC need to consider so carefully before setting up?
Selecting the appropriate company structure is crucial as it directly impacts a business’s ability to achieve its goals. Whether the purpose is asset protection, succession planning, tax efficiency, ensuring confidentiality, or strategic group structuring, the right structure ensures alignment with long-term objectives. Some structures may be irreversible, making it essential to assess needs thoroughly before committing. Defining the purpose in advance helps avoid costly restructuring and ensures regulatory compliance.
2. What are the various company structures and entities available in DIFC, and could you talk me through the differences between them?
DIFC offers a wide range of company structures used for different business needs. Single Family Offices are designed for managing family wealth and investments, ensuring consolidation and long-term financial planning. Holding Companies serve as legal entities to own equity or assets within a corporate group structure. Managing Offices streamline administrative processes and provide intergroup services such as HR, IT, and treasury functions. Proprietary Investment Companies are established to manage direct investments efficiently. Foundations are commonly used for wealth preservation, succession planning, and philanthropic objectives.
A SPV is a cost-effective structure with no operational activities or employees. Active Enterprises, on the other hand, are a special commercial offer by DIFC that allows businesses to set up a holding company, managing office, or proprietary investment company at a significantly discounted licensing fee. Unlike SVPs, these entities can have employees and substance. The wide variety of structures means businesses can choose the right setup based on their specific objectives, whether for operational activity, strategic asset management, or tax efficiency.
3. With such a wide variety of structures on offer, how do you advise businesses to determine the optimal structure for their needs?
The right structure depends on the business’s primary objective—whether it’s asset protection, tax efficiency, succession planning, or commercial operations. Key factors include ownership structure, location of assets, tax implications, and whether the entity will be standalone or part of a broader strategic group. Since different structures may be suitable for the same goal, businesses should evaluate their unique circumstances before making a decision.
4. How does DIFC support businesses with asset protection?
DIFC has a robust legal framework designed for asset protection, including trust, foundation, and insolvency laws. Structures such as private companies, foundations, and SPVs allow for flexible governance and different shareholder classes, ensuring assets are protected while maintaining control over ownership and management. Additional mechanisms such as customized articles of association and shareholder agreements provide further safeguards.
5. And what about those businesses engaged in full commercial activity? How does DIFC and having the right company structure help here?
Beyond legal structures, DIFC provides a thriving ecosystem for businesses. Companies benefit from close proximity to financial institutions, professional service providers, and regulatory bodies, facilitating efficient operations. The Centre also offers access to arbitration services, dispute resolution, and a highly developed financial and legal infrastructure. Making it an ideal hub for businesses with a regulatory-friendly environment and connectivity to global markets.
6. Could you explain how setting up a company in DIFC works? It seems straightforward—what support is available throughout?
DIFC’s registration process is simple, streamlined and fully digital. Businesses can submit documents via an online portal, sign agreements via DocuSign, and access pre-tailored constitutional documents, ensuring a hassle-free experience. Dedicated relationship managers guide applicants, reducing administrative burdens and making it easy to establish a legal entity without requiring external professionals.
7. Finally, there are many commercial hubs around the world vying to attract businesses, and new ones springing up all the time. What makes DIFC unique compared to other financial centres?
DIFC stands out due to its variety of structures, competitive licencing fees, and seamless onboarding. Uniquely, businesses can establish holding companies for as little as USD $1,000 – unmatched by other financial hubs. There is no minimum capital requirement for holding companies, and even family offices require only a USD $1 capital minimum despite needing a USD $50 million net wealth threshold. The Centre also offers an unparalleled financial ecosystem with top-tier banks, asset managers, insurers, and service providers. DIFC provides excellent connectivity, infrastructure, and a tax-efficient regime. Altogether, it makes DIFC a premier choice for global businesses.
To find out more about choosing the right company structure for your business in DIFC, download the whitepaper on this page.
