Established in 2004, the Dubai International Financial Centre (DIFC) is a special economic zone and a major global financial hub located in Dubai. It is a private legal entity which is limited by shares incorporated under the laws of DIFC.
It is a financial free zone with its own body of regulations, law and an independent court system.
The DIFC has three self-governing bodies that support and empower the development and advancement of firms in the Financial Centre.
- DIFC Authority – It is the central entity formed to govern the operational management, strategic development, and the DIFC’s administration.
- Dubai Financial Services Authority (DFSA) – It is the self-governing controller of financial services conducted in or from the DIFC.
- Dispute Resolution Authority (DRA) – The authority responsible for independent implementation and administration of justice in DIFC. The DRA consists of the Arbitration Centre, Wills & Probate Registry and the DIFC Courts.
Advantages of a DIFC SPC
SPCs offers numeral benefits which differentiate them from Limited companies. The SPC is designed for structured finance transactions.
An SPCs’ benefits shared by a DIFC Limited company, include:
- No foreign ownership restrictions
Companies incorporated in the DIFC are not subject to foreign ownership restrictions and shares can be held 100% by foreigners.
There are no corporate or any other taxes for companies within the DIFC. There is also no stamp duty payable on the transfer of shares in a DIFC company. From 2004 onward, organizations incorporated in the DIFC will not be accountable to tax for at least 50 years. This agreement is renewable.
- No physical office requirement
An SPC is not required to lease a physical office space within the DIFC. An SPC is only obligated to maintain a registered office address, which will be that of its corporate service provider.
- Compatibility with other offshore structures
DIFC companies are frequently and successfully used in composite structures involving firms incorporated in onshore jurisdictions, as well as in leading offshore jurisdictions.
The DIFC may be attractive to parties looking to invest in other GCC jurisdictions outside of the UAE. They intend to use an authority that is flexible and operates a refined and versatile body of corporate law.
A company (including an SPC) formed in the DIFC is owned entirely by UAE nationals. It is, therefore, treated as a “national company” for onshore purposes within the UAE.
- Limited liability of shareholders
The liability of shareholders in an SPC is limited to the committed share capital amount.
An SPC is incorporated within the DIFC’s internationally oriented, English speaking legal and regulatory system. DIFC corporate law is based on the English common law. The DIFC Courts operate a network of binding criterion based on the common law.