DIFC Special Purpose Company (SPC) for Structured Finance Transactions

The Dubai International Financial Centre (DIFC) has established itself as a leading hub for international investments focused in the Middle East, Africa, and Asia. The DIFC Special Purpose Company (SPC), in particular, has become an increasingly popular vehicle for either Islamic or conventional structured finance transactions, and for the acquisition, holding and disposal of an asset – or obtaining financing over an asset – as part of a corporate acquisition.

An SPC is a company limited by shares that is incorporated under DIFC law and enjoys the benefits of no foreign ownership restrictions and no requirement to lease a separate office space, all within a zero tax environment. However, every SPC must appoint a Corporate Service Provider (CSP) that is registered in the DIFC to provide its registered office address, majority directors and a corporate company secretary.

As merger and acquisition activity continues to develop in the UAE, Sovereign Corporate Services (Dubai) – working in partnership with licensed CSPs in the DIFC – has been helping to support the increasing use of SPCs through our Nominee Shareholder Service, which provides a robust legal framework for investors and their related parties.

Sovereign’s Nominee Shareholder model, which is endorsed by the Dubai Investment Development Agency (Dubai FDI), offers significant benefits in terms of protecting ultimate beneficial ownership and control of the transactional structure, while also satisfying a company’s due diligence and corporate governance obligations.

In practical terms, it also means that there is no requirement to lease office space, to maintain, file and audit accounts, or to hold an AGM.

An SPC, incorporated in the DIFC, is attractive to parties looking to invest in other Gulf Cooperation Council (GCC) jurisdictions outside the UAE, who wish to be incorporated within the DIFC’s internationally oriented and English-speaking regulatory and legal system. It provides compatibility in complex structures with other offshore and onshore jurisdictions and is treated as a ‘national company’ where it is wholly-owned by UAE nationals

SPC transactions initiated by Sovereign to date have involved both Islamic and conventional structured finance transactions that include cross-border shareholding arrangements. Over the last 12 months, Sovereign has worked with strategic partners, within both the DIFC and the mainland UAE, as well as leading international legal, accountancy and private equity firms.

We receive regular enquiries in relation to our onshore and offshore Nominee Shareholder Services. Please do not hesitate to contact:

Zana Jablan Musa
Head of Onshore Team | Regulatory and Operations, Sales - Sovereign Corporate Services UAE
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Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.