Corporate structure
Private Company Limited by Shares
The default vehicle for almost every DIFC business
In short
A Private Company limited by shares is the standard DIFC entity. It has separate legal personality, limited liability, at least one shareholder and one director, and carries the LTD suffix. Roughly nine out of ten DIFC incorporations use it.
- Liability
- Limited to the amount unpaid on shares, which is nil where shares are fully paid
- Governing law
- DIFC Companies Law (DIFC Law No. 5 of 2018)
- Minimum owners
- 1 shareholder, individual or corporate, any nationality
- Minimum capital
- No statutory minimum. US$50,000 is the working convention for an operating business
- Audit
- Audited accounts under IFRS unless a narrow exemption applies
Best suited to
- Operating businesses with employees and clients
- DFSA Authorised Firms, which use this form
- Joint ventures where the shareholder register matters
- Any structure that may be sold or take investment
Watch out for
- Shares must be fully paid when issued
- A sole director company needs a separate company secretary
- Audit and Registrar filing obligations apply from the first financial year
Why it suits almost everyone
It behaves the way anyone from a common law jurisdiction expects. Shares, directors, a board, articles that can be tailored, a register of members and a clean route to transfer or sell. Investors understand it, banks are comfortable with it and the DFSA requires it for Authorised Firms.
The flexibility on capital helps too. There is no statutory minimum, capital can be denominated in any currency, and the Registrar's expectation is proportionality rather than a fixed number.
Governance the articles can change
The Registrar publishes standard Articles that work for a simple company. Anything involving more than one shareholder usually justifies bespoke articles: transfer restrictions, pre-emption rights, reserved matters, board composition and deadlock mechanics.
Doing this at incorporation costs a fraction of doing it later, when the amendment needs the agreement of a shareholder who has since worked out that the default position favours them.
Questions
Can a DIFC Private Company have one shareholder and one director?
Yes. A single shareholder and single director are permitted, and both can be the same person. A separate company secretary must be appointed where there is only one director.
Can shares be issued in a currency other than US dollars?
Yes. Share capital can be denominated in any currency. US dollars is the common choice because it matches how most DIFC businesses bank and report.
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