ADGM Foundations & DIFC Foundations - MHQ Dubai

Some of the Tools

Dubai International Financial Centre (DIFC) Prescribed Companies (“PresCo”) are flexible, Common law-denominated, private companies limited by shares.

Introduced by the DIFC to replace the previous Intermediate Special Purpose Vehicles (ISPVs) and Special Purpose Companies (SPCs) regimes, they are designed to meet the particular needs of funds, private equity firms, family offices and other investment-related entities (Holding and Investment Companies), particularly with respect to domestic and regional assets.

As is the case for ADGM SPVs – see our fact sheet here

  • PresCos are so-called “exempt” structures: they do not fall under the direct supervision of the DFSA, the financial services regulatory authority
  • PresCos are compatible with sophisticated ownership structures – e.g. trusts/foundations.

Prescribed Companies in practice

Qualifying Applicant

  1. Authorized Firm
  2. Fund
  3. Fintech Entity
  4. Holding Company
  5. Family Office
  6. Private Trust Company
  7. Foundation
  8. Proprietary Investment
  9. Government Entity
  10. DIFC Qualifying Applicant
  11. Shareholder or UBO of DIFC Qualifying Applicant
  12. Affiliates of DIFC Qualifying Applicant
  13. Family Owned Business with large UAE presence

i.e. a business that meets at least 2 of the following criteria:

    1. total asset value of USD10+ million in the UAE
    2. 100+ employees in the UAE
    3. 30,000+ sq. ft. of space in the UAE (including offices, retail, schools, manufacturing); or
    4. all shareholders being UAE nationals.

Prescribed Companies in practice

Qualifying Purpose

  1. Aviation Structure
  2. Crowd Funding Structure
  3. Family Holding Structure
  4. Structured Financing
  5. DIFC Holding Structure
DIFC PresCo webpage-01

Case Study: Use of PresCos in conjunction with foundation as holding vertical for real estate assets

A prominent member of a UAE family (the “Principal”) holds a large portfolio of real estate assets across the UAE in his personal name.

He wishes to ensure that his assets are consolidated and passed on to his sons and daughters without dilution, with each child an equal beneficiary.

In compliance with regulations/practices of each relevant Land Department, he sets up one holding structures per specific Emirate; a DIFC PresCo is constituted fir Dubai assets.

A DIFC foundation is then registered and shares of all holdings settled onto it, with children as beneficiaries in equal parts. the real estate portfolio is consolidated under the structure [applicable transfer fee of 0.125% (as opposed to 4%) of the value of the real estate assets].

What improves?

  • Distribution of proceeds as per Principal’s wishes
  • Access to DIFC’s Common law regulatory framework
  • Protection against potential (creditors’) attacks
  • Privacy
  • Cost-Effective tools